Home > Uncategorized > The Shale Revolution’s Shifting Geopolitics – NYTimes.com

The Shale Revolution’s Shifting Geopolitics – NYTimes.com

December 27, 2012 Leave a comment Go to comments

The shale energy revolution is likely to shift the tectonic plates of global power in ways that are largely beneficial to the West and reinforce U.S. power and influence during the first half of this century. Yet most public discussion of shale’s potential either focuses on the alleged environmental dangers of fracking or on how shale will affect the market price of natural gas. Both discussions blind policy makers to the true scale of the shale revolution.

The real impact stems from its effect on the oil market. Shale gas offers the means to vastly increase the supply of fossil fuels for transportation, which will cut into the rising demand for oil — fueled in part by China’s economic growth — that has dominated energy policy making over the last decade.

There are two major factors in play here. First, the same shale extraction technology of horizontal drilling and hydraulic fracturing can be employed whether the rocks are oil-bearing or gas-bearing. We have already seen over half a million barrels of oil a day flowing from the Bakken field in North Dakota. The recent Harvard-based Belfer Center report — “Oil: The Next Revolution” — suggests that shale oil could be providing America with as much as 6 million barrels a day by 2020. The United States imported only 11 million barrels of crude oil a day in 2011. Given the potential for offshore and conventional domestic oil production, this would suggest that by 2020 America could be near energy independence in oil.

However, many supporters of energy independence miss a key point: The major geopolitical impact of shale extraction technology lies less in the fact that America will be more energy self-sufficient than in the consequent displacement of world oil markets by a sharp reduction in U.S. imports. This is likely to be reinforced by the development of shale oil resources in China, Argentina, Ukraine and other places, which will put additional pressure on global oil prices.

The second factor is the potential to use natural gas for transportation. Some analysts suggest that this will only be a realistic prospect for fleet and long-haul road transportation. But they are overlooking the immense advantage that natural gas has as a transportation fuel in America and Europe, which have both developed a natural gas infrastructure in urban areas that takes piped natural gas into homes, offices and supermarkets. Once gas is cheap and widely available, it is possible to consider dealing with the “last mile” problem of providing home refueling kits so consumers can fill up natural-gas powered cars in their own garages.

via The Shale Revolution’s Shifting Geopolitics – NYTimes.com.

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: