Incredible growth in shale production, both oil and gas, starting to have an impact on geopolitics. In his Wall Street Journal column, John Bussey expands on the idea: Shale: A New Kingmaker in Energy Geopolitics. He describes some of the ways that a dramatic increase in U.S. production is changing the world’s political dynamics.
One big change is the drop in oil imports:
The U.S. is already getting a lift. In 2005, it imported 60% of its oil. That’s down to roughly 42% now. The losers: the Middle East, Africa and Venezuela, sometimes unpredictable suppliers that over the years brought us oil shocks and price spikes. Though the oil market is global and an oil-field strike abroad can still raise prices here, America’s vulnerability to shaky regimes and despots is declining.
I predict we will continue to import less and less oil. (Yeah, I know. That is a really easy prediction. Hey, I’m new to writing about energy, so I’ll only go out on a very small limb.)
Impact on Europe could be very positive if they can get oil from the U.S. Even bigger impact if they can start getting gas from the U.S., which will be a much more reliable source than Gazprom.
Here is an interaction with our sanctions on Iran:
“Had it not been for this growth in U.S. production, the sanctions on Iran could not have been as successful,” says Daniel Yergin
There are lots of places with huge amounts of untapped shale oil & gas. Here are a few reasons the U.S. is ahead of everyone else in terms of new production:
Along with Canada, Australia and the U.K., it has what many other countries don’t: fast-moving independent oil drillers willing to take risks, and capital markets willing to finance them. The resulting speed and innovation are tough for other countries to match.
Another major factor is that our government isn’t actively trying to slow or prevent oil production.
Check out the full article for more details on the geopolitical impacts.