Shale Gas and American Foreign Policy

June 24, 2014

America's shale revolution has significant foreign policy implications, writes the Wall Street Journal.

While just a decade ago, many energy experts were suggesting that oil reserves had peaked and that the U.S. would grow increasingly reliant on foreign imports, new shale production in the U.S. has America building terminals to export, not import, low-cost liquefied natural gas (LNG). The newfound energy source is significant:

  • According to the Energy Department, the U.S. has 25 trillion cubic meters of recoverable shale gas.
  • The shale gas, combined with the United States' other energy resources, could provide 200 years' worth of energy.

This increased shale production has caused a geopolitical shift:

  • The cheaper energy makes the U.S. more competitive on the global stage, especially in energy-intensive industries.
  • Shale helps reduce American dependence on foreign energy from the Middle East.
  • Countries such as Venezuela will have diminished ability to purchase votes in the U.N. based on oil shipments.
  • Similarly, Russia's ability to coerce its European neighbors by threatening to cut off its energy supplies will eventually be reduced if the government approves more LNG export terminals.

The positive impact of shale energy is felt domestically as well, as it boosts the economy, creates jobs and generates tax revenue.

Source: Joseph S Nye, "Shale Gas is America's Geopolitical Trump Card," Wall Street Journal, June 8, 2014. 

 

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