The USA. should be less reluctant to use its geopolitical influence expanded after changing a nation increasingly dependent on imports of oil and gas to one about to be a major exporter, said Manhattan Institute Senior Fellow Mark P. Mills.
"There has never been much new oil produces so fast in history," said principal remarks at a conference Mar. 22 Hudson Institute examine the geopolitical implications of the US shale oil and gas revolution. "It's completely shocked global markets. The US went from being a supplicant possibly a greater global influence.
"The issue of energy independence, which had seemed so important, suddenly was back to what's going on," Mills said. "We have an opportunity for geopolitical influence that we have not exercised. Perhaps the next administration will explore the formation of partnerships with our allies to provide more exports of oil and gas".
Mills questioned the idea that oil prices sinking from $ 100 / bbl to $ 30 / bbl in 18 months will have a long term impact on oil production in the United States as projects were canceled and workers were dismissed. Independent producers who figured prominently in the US shale oil and gas production growth have made their operations more efficient and economical, Mills said.
This year, Mills said, is "a definition of" one for many producers "because of their coverage is withdrawn and will have to pay real prices." He noted that the most important "there are billions of dollars in capital in line to invest in companies in difficulty and add them stronger competitors".
He said: "The technology has also made large tracts of oil fields profitable US $ 30 / bbl The reality is that we need to change policies so we can export more oil and gas.".
A number of influences
Other speakers, however, were less confident that the US They could use their relatively new abundance of oil and gas to exert significant diplomatic influence.
"From the industry perspective, there are limits to the use of energy as a political tool," said Edward Chow, who spent 20 years working for Chevron Corp. in the capabilities of US and overseas before becoming a researcher principal at the Center for Strategic and International Studies' energy and National Security Program.
"The shale revolution will not happen overnight," Chow said. "It started with basic research in the 1960s and 70s, when gas prices were low and domestic production was falling. However, its benefits were also stimulated by the growth of non-oil technology and private property Earth ".
Chow said, "Its impact in Europe was evident well before it became an exporter of LNG. The previous imports to our growing domestic production replaced became available for other markets, putting pressure on prices from other suppliers. The last week, the first batch of US export reached GNL-of all places-Brazil ".
Europe and Russia are each trying to diversify the first to get more gas suppliers, and the second for trying to sell more gas to China and East Asia, said another speaker, Hudson Institute Senior Fellow Hannah Thoburn. Lithuania is working to obtain gas from the United States, and Poland, which opened its first LNG terminal is importing from Qatar and the construction of a transmission network through other Baltic states, he said.
But Brenda Shaffer, an associate professor at the Center of Georgetown University Eurasia, Russia and Studies Eastern Europe, warned that some countries in Eastern Europe may be making a mistake to think heavy reliance on LNG and floating storage is a easy way to diversify their gas supplies. Costs are much higher than gas pipeline and could boost demand for coal and alternatives, he said.
"At the end of the day, there is still a gap between LNG and cheaper gas from Russia or elsewhere pipeline," Shaffer said. "There are also significant infrastructure problems. The percentage of gas is not a reasonable measure of security of supply of a country because each has different requirements and limitations."
When Mills suggested that the US have an overwhelming advantage in oilfield service and supply of knowledge, Chow admitted that is relatively permanent because much of the technology can not be transferred abroad. "But it could be adapted," Chow said. "Once success is for the time-no matter where first-pass other countries will realize that they can do well."
Maintaining strategic interests
A position overall supply of oil and gas strong America does not mean that the country should neglect their interests in the Middle East and the Persian Gulf, speakers agreed. "I'm not a big believe in the geopolitics of energy," said Nikos Tsafos, president and chief analyst enalytica, a company strategic energy services. "Middle East producers are better prepared now to withstand a downturn in oil prices. There may be clashes, but it is difficult to quantify its geopolitical effects."
The last time oil prices recovered, most Middle East producers used the windfall to pay the debt before spending money on new projects, Tsafos said. "It is difficult to draw a line between depressed prices and government policies oil," he said.
"It comes down to the circumstances of each country," Tsafos said. "Sometimes a weakened government tries to do something strong to keep its internal political credibility. It would be a mistake to try to take advantage of the abundant gas US sticking to Gazprom. Purely political decisions can create problems in the long term."
the exports of US oil before the oil export ban was repealed "I led our European refineries having lunch '," Chow said. "Once we decided to export crude, these refineries could start receiving it. It is in the US interest to encourage this because it would have almost no effect on exports from US to other foreign markets. There is also a lesson here to take advantage indigenous resources as we did in North America that Europe should take a closer look. "
US production could also recover faster than many experts believe Mills said. "If the price is kept more than $ 40 / bbl for the coming months, we'll see a second revolution begin shale-oil," he said. "We could see a period of several glut of oil and gas, where prices are kept low. It would be not only the largest transfer of wealth in the history of the major oil producing nations and oligarchs to a group of independent producers, but also, potentially the biggest geopolitical shift in decades. "