US President Donald Trump's push for energy dominance looms over the Western Hemisphere as he aims to take control of Venezuela's oil sales and renews his interest in Greenland's critical minerals.
Mr Trump has acknowledged oil as a motive for his move this month to capture Venezuela's President Nicolas Maduro. On 2020, the US placed a bounty on the Venezuelan leader over drug trafficking and other charges.
“One way the Trump administration is attempting to mollify the Maga [Make America Great Again] critics is by saying we did this because it will benefit the US in terms of providing security and in terms of ensuring lowering the price of oil, thereby benefitting the American consumer,” said Mark Jones, a senior fellow at Rice University's Baker Institute.
“Because at the end of the day, the idea that Mr Maduro represented this significant threat to us vis-a-vis drug trafficking is pretty weak tea.”
Energy dominance
The notion of “energy dominance” goes back to Mr Trump's 2016 presidential campaign, which coincided with the shale revolution that made the US the world’s top oil producer.
The energy dominance play moves beyond the idea of being energy independent, to a place where the country produces as much oil as it can and exports it abroad to support economic growth.
Mr Trump's second term in office has seen an acceleration of this trend, with the President declaring a national energy emergency, forming a national energy dominance council to boost production and lower costs, and signing an order last March to ramp up production of critical minerals.
Critical minerals and energy security were also featured in the White House's national security strategy.
And while Mr Trump is not the first president to tie energy security to national security, Matthew Bey, senior global analyst at the Rane Network, said he is unique in his fossil fuels approach.
Mr Bey also said recent developments are not necessarily just an energy story, but about a broader mercantilist view to control many energy resources as possible.
“He's famously complained about how [former US presidents] [George W] Bush and [Barack] Obama didn't take the Iraqi oil after the fall of Saddam, and he's now supplying that logic essentially to the Venezuela context,” Mr Bey said.
Venezuela
Venezuela has an estimated 303 billion barrels of crude oil reserves, but only produces about 1 per cent of the world's oil because of its neglected infrastructure. Its current output stands at about 1.1 million barrels per day, compared to 4 million bpd in the 1970s.
Mr Trump last week pushed top US oil executives to make significant investments in Venezuela's ragged oil sector, which could cost billions of dollars and take years to complete.
During the meeting, he touted a decision by the interim Venezuelan government to provide 50 million barrels of crude oil, saying the US would immediately begin refining and selling it for an indefinite period of time.
Darren Woods, chief executive at Exxon, said the South American country is currently “uninvestible”.
Greenland
Mr Bey said Mr Trump is using his mercantilist approach towards oil and applying it to critical raw materials. This comes as Greenland becomes the latest flashpoint in geopolitics, not just for its strategic location for Nato but also because of the island's critical minerals.
The Trump administration last year signed critical minerals agreements with Saudi Arabia, Ukraine, Australia and others, as Chinese export restrictions exposed US reliance on Beijing's rare earths.
But there is another competitor for Greenland's rare earths: China.
According to a report from the Centre for Strategic and International Studies think tank, China has shown interest in investing in Greenland's infrastructure, although no major projects have been announced, due to geopolitical concerns.
“Before investments in Greenland’s rare earth resources can yield economic and national security payoffs for both US and Greenlandic partners, the island requires significant improvements,” wrote authors Meredith Schwartz and Gracelin Baskaran.
Washington and its European allies should deepen collaboration to strengthen supply chain resilience with the island requiring large improvements to its infrastructure, they said.
