Experts: Shale Revolution Has Improved U.S. Energy Security and is ‘Shifting the Geopolitical Balance’
Remarkable growth in U.S. oil and natural gas production over the past decade has bolstered domestic energy security and helped to strengthen American influence in the global market, a panel of energy experts testified at a House Foreign Affairs subcommittee hearing this week. Speaking to the Subcommittee on Terrorism, Nonproliferation and Trade, energy and policy analysts from Rice University, the Center for Strategic and International Studies, Brookings Institution and Gas Technology Institute, shared the sentiment that U.S. shale development has had a significant impact not only on the American economy, but U.S. diplomacy as well.
As shale development has become more prevalent over the past decade, through technologies such as hydraulic fracturing and horizontal drilling, the United States has experienced a profound increase in oil and natural gas output. The United States is currently the world’s largest producer of petroleum and natural gas hydrocarbons – and has been for the past six years – as natural gas production has grown from 57.7 billion cubic feet (Bcf) per day in 2008 to a projected 86.4 Bcf per day this year, a roughly 50 percent increase. More impressive still, crude oil production has grown from about five million barrels per day (bpd) in 2008 to 10.5 million bpd in April of this year – an over 100 percent increase.
Accompanying such massive energy production is greater flexibility and influence in the global energy market, as the United States is less dependent on foreign oil and gas. According to the U.S. Energy Information Administration (EIA), annual U.S. net imports of crude oil and petroleum products declined over 66 percent from 2008 to 2017. This decline has had a substantial impact on the global oil market and geopolitics as a whole, as Kenneth Medlock, Senior Director of the Center for Energy Studies at Rice University’s James A. Baker Institute for Public Policy, stated in his testimony:
“Nevertheless, the growth in US oil production is transforming the status quo and shifting the geopolitical balance. This highlights the importance of the so-called ‘shale revolution’ in achieving US geopolitical and foreign policy aims.”
“As the US increases its exports of crude oil, petroleum products and natural gas, its influence explants into those nations that increasingly rely on imports to satisfy their energy appetites associated with economic growth. In general, expanded US production US production renders global supply to be more responsive, and, as a result, carries an energy security benefit to consumers at home and abroad.”
Admittedly, the United States is not completely independent of foreign producers due to the level of domestic energy consumption, but increased output through shale development now gives the United State the ability to take on the role of global energy exporter. According to EIA, annual U.S. natural gas exports increased 285 percent from 2007 to 2017, as the United States became a net exporter of natural gas for the first time in 60 years in 2017. Further, in the just four years since the U.S. crude oil export ban was lifted, the United States is already exporting over 1.6 million bpd. This export growth provides further opportunity to influence global politics. As Medlock stated:
“As argued in previous Baker Institute research, this also benefits US foreign policy endeavors in dealing with potentially hostile oil-producing nations, and providing a stabilizing effect on the global oil market.”
But even with soaring production and exports, abundant resources “are not a direct proxy for security,” Sarah Ladislaw, director and senior fellow of the Energy and National Security Program at the Center for Strategic and International Studies noted. This is because hinderances to continued development, such as limited pipeline capacity, can weaken America’s ability to fully realize the benefits from increased production. As Ladislaw mentions in her testimony:
“Logistical bottlenecks in pipeline contracting, sighting, permitting, and construction continues to impede rapidly growing oil and gas production in the Permian Basin in Texas from reaching end markets. While this bottleneck is temporary, it once again illustrates the strategic importance of midstream and delivery infrastructure towards realizing the full commercial and strategic value of these resources.”
Because of this, it’s necessary to ensure a streamlined pipeline permitting process is in place and that critical infrastructure is built unimpeded. While “Keep It In the Ground” activists are turning their attention to blocking pipelines, believing it will stop oil and gas development, such actions simply hurt our ability to rely on domestic resources and damages our energy security. Just a few months ago, Massachusetts saw the repercussions of these efforts, as the state, lacking the pipelines needed to transport natural gas from the nearby Marcellus shale, turned to importing liquefied natural gas from Russia to meet their energy needs.
In short, we in the United States has been given an incredible opportunity to improve our energy and natural security, while also boosting our economy through shale development. It’s critical to make sure this opportunity is not wasted.