After decades of fuel dependency on the Middle East and elsewhere, fracking – the high pressure extraction of oil and gas from shale – promises to make the United States energy self-sufficient by 2030.
In American power and the fracking boom, we explore what this new paradigm means for the US’ geopolitical ambitions, objectives, and strategy in the years ahead.
By Bob Abeshouse
Fracking is giving rise to a new energy abundance in the United States that has major implications for American policy in the Middle East and the debate over climate change. Over the past five years, daily oil production in the US increased 3.7 million barrels, while US net imports of oil dropped 44 percent. A revolutionary technique to tap into oil and gas reserves by drilling horizontally into underground shale formations and using liquids pumped at high pressure to open cracks in the rock, fracking is reshaping the contours of American power.
“It has huge implications for energy, for economy and for geopolitics,” according to Fatih Birol, the chief economist at the International Energy Agency (IEA) in Paris. Birol compares the impact of the fracking revolution to the introduction of nuclear energy 50 years ago. The quantities of oil and gas being produced in the Eagle Ford Shale in Texas, the Bakken Shale in North Dakota, and other new energy projects in the US are huge. Over the last five years, for example, the amount of oil being produced in the Eagle Ford increased from virtually zero to 1.5m barrels a day.
Birol says that in one or two years, the US will be the number one oil producer in the world, overtaking Saudi Arabia. In 2012, it became the number one natural gas producer, passing Russia. The IEA projects that the US and Canada will be energy self-sufficient by 2020, and the US alone by 2035.
“These are historical developments,” Birol says. “The United States is becoming an energy exporter, completely new role, and the new US energy strategy, foreign policy will be based on this new reality.”
For the past 35 years, securing access to Persian Gulf oil and protecting the shipping lanes to keep it flowing has been a central tenet of American military policy. It is known as the Carter doctrine because President Jimmy Carter first enunciated the commitment in his 1980 State of the Union address.
Historian and author Andrew Bacevich hopes that the shale oil and gas boom from fracking will cause a strategic rethinking of the Carter Doctrine in the United States. “What the new energy regime could do would be to make it clear that the United States does have choices and one of those choices will be to lower our profile in the Middle East more broadly and in the Persian Gulf specifically,” he says.
According to Jeppe Kofod, a member of the European Parliament and representative from Denmark to the NATO Parliamentary Assembly, about one-third of US military spending, or about $200bn a year, can be linked to efforts to keep oil flowing. Kofod submitted a paper on the implications of the fracking revolution that sparked a review in the NATO Assembly last year. He thinks that there will be major changes in US military policy as a result of the new energy abundance in the US. “They will do some changes in the military for sure,” he says, “less money in military in the Middle East and they will be less willing maybe to go into a new war to safeguard its own interests when it comes to oil in the Middle East”.
At the end of the day even the US is part of the global economy and if the global economy is suffering, the US itself will suffer.
Kofod also believes that the US will have more freedom in dealing with the Gulf regimes and Israel. “I have no doubt that it will strengthen the independence so to speak of the US when it comes to its foreign policy,” he says. “This is something that is changing the power of the OPEC countries, which is good I think.”
But Sadad al-Husseini, who served as a top executive for more than 20 years at Aramco, Saudi Arabia’s state-owned oil company, thinks the predictions about America’s fracking boom and its implications are overblown.
Husseini argues that the US is still importing more than seven million barrels of oil a day, and that fracking is “not going to be able to add another seven million barrels of oil shale production in the US”. He takes issue with the IEA analysis of future shale production in the US, and also discounts their projections on the impact of US fuel efficiency standards for cars and trucks in promoting energy independence.
Even if US oil imports from the Middle East plummet, the world’s dependence on the region for energy will continue to be great, Husseini argues. “Forty percent of the oil is in the Middle East,” he says. “At the end of the day even the US is part of the global economy and if the global economy is suffering the US itself will suffer. So can the US economy become independent of the Middle East? No.”
In fact, President Barack Obama and administration officials emphasise that the US commitment to safeguarding access to Middle Eastern oil will remain strong despite America’s shrinking reliance on imports from the region. In a speech at the United Nations last year, Obama said that the US is prepared to use military force, “to ensure the free flow of energy from the region to the world. Although America is steadily reducing our own dependence on imported oil, the world still depends on the region’s energy supply.”
Kofod believes that such statements by US policymakers ignore the inevitable impact of America’s new energy abundance on US policy in the Middle East. “I think it’s a way to reassure the US will still be there in the world as a dominant global power safeguarding peace and stability. And also fighting for interest of the allies the US are close to,” Kofod says. “But honestly I think that it will change over time, the US policies.”
Political and strategic interests
Bill Richardson, UN ambassador and the US secretary of energy under President Bill Clinton, does not think there will be any significant decline in military expenditures to protect the flow of oil from the region. The US “still has huge political and strategic interests” in the Middle East, Richardson says.
Richardson co-chaired a Center for a New American Security task force on the shale boom and US national security that issued a report this year. He acknowledges that America’s new energy abundance will give the US “more options, but right now the growth of the al-Qaedas and the ISIS’ and countries that are hostile to the United States are increasing. So we have to engage in the region politically a lot more, strategically a lot more.”
Bacevich believes that as an “awareness of energy self-sufficiency in North America begins to sink in” there will be more pressure to cut US military expenditures to the Middle East and disengage from the region. “It’s more likely that people will ask ‘what are we getting for all these military dollars?‘ … in trying to provide for the security in a part of the world that is no longer as important to us as it once was.”
But whatever the implications of the fracking boom for American foreign policy, the real argument in the US is all about the environment. Some experts argue shale gas can help reduce the greenhouse effect by replacing coal. Richardson believes fracking can be good for the environment. “I think technology has advanced so much that you can find this shale and with proper regulation do it safely,” he says.
However, millions of Americans are concerned about the potential hazards of fracking, and their numbers are growing. There is a moratorium on fracking in New York, and citizens are fighting for bans in Texas, Colorado, Pennsylvania and other states. Mike Tidwell, the director of the Chesapeake Climate Action Network, organised an anti-fracking protest in Washington, DC last July. He says that if policymakers were really concerned about energy independence “we would focus on forms of energy that actually enhance our security. We would switch faster and faster to wind and solar. If we are going to stabilise our global climate, we have to keep 80 percent of all known fossil fuel reserves in the ground.”
Anti-fracking activists are trying to prevent the construction of terminals and pipelines needed to transport and export natural gas and oil. Robbie Cross, a member of a local group trying to stop fracking in Pennsylvania, is clear about the rationale. “After you frack it has got to go somewhere,” he says. “If we don’t have ways of moving it, selling it, distributing it, it’s not going to work.”
Cross is from Williamsport, Pennsylvania, one of the best energy-producing areas of the Marcellus Shale. The Marcellus is the second-largest natural gas find in the world. It covers 246,000 square kilometers across eight states. The Marcellus is viewed as a key source of potential US natural gas exports to Europe and Asia.
There has been a ban on US oil exports since 1975. Currently, Cheniere Energy is constructing the first terminal in the US capable of converting natural gas into liquid natural gas (LNG) for export. The facility, Sabine Pass in Louisiana, will not be operational until 2015. Politicians and the energy industry are pushing hard to get more export terminals on line.
Russia’s energy leverage
Richardson and other proponents of shale exports argue that they can be used as effective instruments of American power to counter the Russians in Europe. The Continent relies on Russia for 30 percent of its gas supplies, and half transits via the Ukraine. Some countries like Hungary, Poland and the Czech Republic get 70 to 100 percent of their gas from Russia. Hungary’s ambassador–at-large for energy security, Anita Orbán, argues that American exports of natural gas to Europe can help diversify supplies and undermine Russia’s energy leverage there even if the flow does not begin for a few years. Orbán says that there are “numerous examples where the certainty of a new source, new route coming on board in a couple of years down the line has an immediate price impact.”
we would focus on forms of energy that actually enhance our security. We would switch faster and faster to wind and solar. If we are going to stabilise our global climate, we have to keep 80 percent of all known fossil fuel reserves in the ground.”]
However, US energy companies stand to make considerably more from exporting LNG to Asia, where natural gas prices are higher, than to Europe. Richardson believes that the Obama administration’s geopolitical reorientation to Asia in 2011, the so-called Asia-Pacific pivot, is connected to potential new markets for US natural gas. Richardson also expects the ban on US oil exports to be lifted soon. “I don’t know if it will be in the Obama term,” he says, “but I wouldn’t be surprised if in his last year he tries to get a congressional agreement on it.”
Richardson does not think that citizen opposition to fracking will put a stop to it.
“We are creating jobs and we can protect the environment,” he says. In the end he expects the majority to support “what’s in the best security and foreign policy interest” of the US, “and that clearly, clearly is exporting natural gas and oil.”
Tad Patzek, the chairman of the department of petroleum and geosystems engineering at the University of Texas hopes that is not the case. After analysing thousands of fracked wells, he has come to the conclusion that shale oil and gas “is a huge resource” that will serve the US for decades, “but not at the rate we expect it to perform”.
Patzek’s analysis indicates that the production of fracked wells declines 70 percent on average in the first year, 50 percent in the second year, and that after that production tends to be low. That means oil and gas production through fracking requires the constant drilling of new wells and is expensive. Patzek counsels the conservation of shale resources while the US converts to renewable energy.
The US needs to “start thinking long term, which we never do,” he says. The oil and gas being produced from the fracking revolution is “the the last gift from Mother Nature and engineers like me to the nation,” he says. “And I would appeal to everybody to kind of appreciate that gift and savour it while it lasts.”
Bacevich thinks the fracking boom is strengthening America’s economy and enhancing the country’s power, providing it with an array of choices in the Middle East and elsewhere that “we previously didn’t see available to us.” But 100 years from now, he argues, Americans may regret the new energy abundance from fracking. It will “make it easier for Americans to ignore this debate over global climate change,” he says. “An American way of life that arguably damages the environment will continue, will persist.”
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