US Gas Boom To Change Global Geopolitics?

  • Berlin
  • India
  • Feb 08, 2013



Could the United States’ cheap-energy boom (brought by the “fracking” technique) shift Washington’s focus away from the Middle East in future, and change global geopolitics? A Security Conference in Germany will look at the impact of the new technology – which promises to one day make the United States energy-independent, while weakening oil and gas power Russia.

US Gas production has skyrocketed in recent years, thanks to fracking – where a high-pressure mix of water, chemicals and sand is blasted into deep rock layers, to push out oil and gas molecules. The cheap natural gas boom is helping to revive the US economy, and create an energy “gold rush” in parts of the Midwest. By some estimates the US will overtake Russia in Gas output by 2015.

US President Barack Obama, in last year’s State of the Union Address, spoke of “a supply of natural gas that can last America nearly 100 years”, and promised to push forward the technology. The method is controversial, because of fears that it can contaminate groundwater and trigger earthquakes. European countries have so far shied away from adopting it, even as gas prices have fallen.

The United States may yet become a net energy exporter. ING Financial Markets Research said in a report that “the future could see specialised LNG (Liquid Natural Gas) tankers crossing the Atlantic, to provide Europe with cheap US Gas.”

A discussion panel at the annual Munich Security Conference (MSC) is dedicated to the topic “The American Oil and Gas Bonanza: The Changing Geopolitics of Energy.”    A study by German intelligence service, the Bundesnachrichtendienst, looks at the potential impacts of this gas revolution on the strategic world order, the Spiegel weekly reported. For one, the study said, the United States will become less reliant on the oil-rich states in the Middle East – where it has fought several wars, and keeps a heavy military presence. The MSC’s organiser, veteran German diplomat Wolfgang Ischinger, has said that this may mean that the EU and NATO will play a greater role in ensuring security and stability in the region. The BND report said that Iranian threats to close the Straits of Hormuz—a crucial route for the world’s supertankers—would lose some of their punch if the US weens itself off Gulf oil. Energy power Russia, where Gazprom is crucial for filling the state coffers, would be also among the big losers of a major shift, and is already hurting due to lower prices.

Other analysts say talk of a major US strategic shift is overblown, as the United States will keep defending its ally Israel, containing Iran and fighting Islamic militants. But ING said that “the amount of energy the US imports from areas of the world that might be considered ‘at risk’ or ‘volatile’—either due to their own weak or potentially hostile governments, or to their proximity to such countries—is now very small.” “Shale oil and gas have to a large extent substituted for imports, and those that still exist are increasingly from ‘safe’ countries – such as Canada and Mexico,” said its paper.

The ING report said energy security would also be a strong motivation for other countries.“Given Europe’s greater reliance on North Africa for its energy, and the recent bombing of Al-Qaeda terrorists in Mali and the resulting retaliatory carnage in Algeria, security concerns are also a pressing reason for development of local energy sources,” it said. 


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