Energy Strategy, Technology, and Current Issues in the Oil Industry
Energy Overview / Current Issues in Energy

Susan Smith Nash, Ph.D.

Issue: Geopolitical power shuffles.
 
Geopolitical power will shift as countries with natural gas resources transition away from using imported oil and take advantage of plentiful and inexpensive gas.
 
According to many analysts, the shale energy revolution is likely to result in a realignment of global power, and those changes will benefit the West (namely the U.S.) and will reinforce U.S. power, at least during the first half of the 21st century.
 
What is enabling the change is the fast pace of technological innovation which will allow shale oil and gas to be produced at a much lower cost than today, and to conquer then now seemingly intractable problem of decline.

According to some reports, U.S. energy independence (projected to be achieved by 2020 or 2030), will result in dramatic geopolitical shifts.  In 2012, the U.S. imported only 40 percent of the oil it consumed, which is down from 60% in 2005. This was possible in part because of several very large oil-producing unconventional fields that are now coming online, namely the Bakken (in North Dakota and Montana), the Eagle Ford (south Texas), and other liquids-rich plays, including the Mississippi Lime (Kansas and Oklahoma), the Woodford shale (Oklahoma), and the Niobrara (Colorado and Wyoming).

According to Citigroup analysts, certain sectors of the economy will benefit more than others, and similarly, certain sectors of the global economy will benefit. For example, fewer sales to the U.S. could lead to less emphasis on Middle East policy, with a long-term effect of other countries moving to cement ties (and supplies); namely India and China.

Readings:

Energy 2020: North America, the New Middle East?
CitiGroup Report:
https://ir.citi.com/%2FSyMM9ffgfOZguStaGpnCw5NhPkvdMbbn02HMA05ZX%2BJHjYVS07GqhxF2wMk%2Bh4tv7DEZ5FymVM%3D

DOE Report
http://www.ourenergypolicy.org/energy-2020-north-america-the-new-middle-east/
 
American Energy Independence: The Great Shake-up
http://www.bostonglobe.com/ideas/2013/05/25/american-energy-independence-great-shake/pO9Lsad4cVQvjdpyxMI1DO/story.html

The shale revolution’s shifting geopolitics
http://www.thehindu.com/opinion/op-ed/the-shale-revolutions-shifting-geopolitics/article4256348.ece

Shale Will Power U.S. Economy
http://www.ft.com/intl/cms/s/0/4fe91278-9d29-11e2-88e9-00144feabdc0.html#axzz2UQNaqGyq

Shale Gas Revolution: Developments and Changes
http://www.chathamhouse.org/sites/default/files/public/Research/Energy,%20Environment%20and%20Development/bp0812_stevens.pdf

Shale Gas: A Global Perspective
http://www.gses.com/images/documents/shale-gas-global-perspective.pdf

What If We Never Run Out of Oil?  (article about methane hydrates)
http://www.theatlantic.com/magazine/archive/2013/05/what-if-we-never-run-out-of-oil/309294/
 
Guiding Questions:

What are some of the top implications of energy independence of the U.S.?

Given that the increased production is only possible with new technologies, what are the implications for the U.S. economy?  The U.S. workforce?

When people comment that the gains are likely to be asymmetrical, what exactly does that mean?