WASHINGTON, D.C. -- The free trade of America's abundant energy resources would provide an invaluable opportunity for the U.S. to help strengthen and stabilize global energy markets, especially if China is engaged as a partner, according to a new policy brief released by the American Council for Capital Formation (ACCF).

The paper specifically identifies U.S. crude oil and LNG exports as potentially playing a crucial role in easing current tensions in the South China Sea, along with advancing political and economic stability in the Asia Pacific.

"Bolstering the United States' relationships with key powers like China is critical to securing a safer and more prosperous future, and one avenue to achieve that goal is through the unfettered trade of U.S. energy," said George David Banks, ACCF executive V.P. and author of the policy brief. "Our nation's affordable and abundant energy resources have the potential of generating economic prosperity and lasting regional partnerships while easing potential conflicts in the Asia Pacific and across the globe."

The paper provides a stark contrast between America's soaring energy abundance and China's growing energy insecurity. Notably, according to the U.S. Energy Information Administration (EIA), U.S. oil import dependence is expected to be just 14% by 2020, down from a high of about 60% in 2005. In contrast, China is expected to buy roughly 70% of its oil from foreign sources within the next few decades.

Energy demand

"Undeniably, China's increasing dilemma should be a far greater geopolitical concern to the U.S. than similar problems in Eastern Europe given the importance of Asia Pacific to the global economy," Banks warns. 

ACCF theorizes that these divergences, while introducing certain challenges, can create significant opportunities between China and the U.S.

"If the energy scarcity concerns of the Asia Pacific region are not adequately addressed in a multilateral context, tensions are likely to increase substantially as the demand for energy explodes during the next few decades," Banks concluded. "Unfortunately, aged policies restricting American crude and LNG exports are standing in the way of U.S. diplomatic leadership. Only by accepting this reality can we help foreign allies meet their rising energy demands, promoting stronger international diplomacy and security. Improved security between the U.S. and its partners abroad is within our grasp, but the first step in ensuring this is implementing sound energy policy here at home."