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oil boom means security
To fight jihadists, foreign policy hawks have long promoted global warming legislation: If carbon taxes and conservation programs can get us off Middle Eastern oil, the hawks reasoned, oil prices will drop as demand drops and money for terrorist attacks will dry up. Out came global warming legislation touting its benefit for national security, such as the Climate Security Act of 2008, which promised deep cuts to America’s dependence on Middle East oil by 2050.
Those hawks should reconsider. Global-warming legislation has emerged as the single biggest threat to the West’s energy security and the single biggest boon to most of the West’s geopolitical foes. The game changer is shale oil. The U.S. has so much of it that Citigroup, in a report released earlier this month, states that in five years the U.S. could eliminate all oil imports from the Middle East and other hostile suppliers and become a net energy exporter. The U.S. has already halved its oil imports from 2006 levels.
Other expert bodies are equally bullish about the prospects of shale oil. The International Energy Agency forecasts that by 2017 the U.S. will overtake both Russia and Saudi Arabia to become the world’s biggest oil producer, and that by 2035 it will be able to eliminate almost all oil imports, including from Canada.
PricewaterhouseCoopers (PwC) believes that U.S. shale oil production could reach four million barrels per day by 2035, more than triple the U.S. government’s official estimates. This has been an overachieving industry, it notes, with a torrid 26% per annum growth rate to date and an estimated 33 billion barrels in the ground, up dramatically from the 2007 estimate of just four billion barrels.
The global prospects — estimates of recoverable shale oil reserves have climbed to as much as 1.5 trillion barrels — change the game again. PwC believes that the gush of oil that the globe will be seeing will dramatically lower oil prices, possibly by US$50 a barrel, boosting the global economy by as much as US$2.7-trillion a year by 2035. The biggest winners of this shale-oil fallout are India and Japan, whose GDP could rise by an extra 7%, followed by the U.S. and the eurozone, which could see extra 5% rises.
Put another way, the democracies all win, the dictatorships and authoritarian states mostly lose. Business as usual would end for many of the bad guys. Iran, considered the world’s chief financier of terror, would need to scale back its nefarious activities.
Venezuela, which finances anti-American activities throughout Latin America, would likewise be curbed. Saudi Arabia might not be able to finance the vast complex of mosques and madrasas — many thought to have radicalized terrorists — that it supports in Pakistan and in the West.
These would be welcome restraints — according to a Gallup poll released this week, 96% of Americans consider preventing international terrorism to be their top foreign policy goals. With almost equal passion, Americans desire to be secure in energy.
But there are also losers. Russia and the Middle East oil exporters “could see a significant worsening of their trade balances by around 4% to 10% of GDP,” PwC says. According to Citigroup, with shale oil added to the world’s existing conventional and tar sands supplies, oil prices could drop below the break-even levels that many countries need. Russia may not be able to balance its budget. The picture for “Venezuela is pretty bleak.” Some countries risk becoming “failed states.”
Source: Lawrence Solomon: Fight jihad, stop carbon taxes | FP Comment | Financial Post
This would be great, except that we still need refineries to process the oil, and those seem to be shuttering with increased frequency these days. I come to one of three conclusions:
a) the oil infrastructure in this country needs to be seriously repaired (with public funds if needed)
b) there's some serious manipulation of price and shuttering refineries is one of their tactics
c) both a and b are true
Two or three refineries in the NE were shut due to bankruptcy, which is why we might need some sort of contingency operation by the DOE to keep plants like that running until there's an owner.
I am all for weaning ourselves off of fossil fuels completely. Using oil and others to fuel vehicles at the expense of plastics and other uses is wasteful. That said, I realize that's a pipe dream in the short term and we need oil. So why should we not continue to buy the resources of other countries and continue to sit on our stockpiles for future use? If they want to sell us their oil at the expense of their future economic security, then we should oblige and buy it. Producing it here isn't going to make it any more affordable to buy than if it was produced in Saudi Arabia, so why not continue to save the resources we have?
I am all for weaning ourselves off of fossil fuels completely. Using oil and others to fuel vehicles at the expense of plastics and other uses is wasteful. That said, I realize that's a pipe dream in the short term and we need oil. So why should we not continue to buy the resources of other countries and continue to sit on our stockpiles for future use? If they want to sell us their oil at the expense of their future economic security, then we should oblige and buy it. Producing it here isn't going to make it any more affordable to buy than if it was produced in Saudi Arabia, so why not continue to save the resources we have?
Shale oil is only cost fesable if oil prices remain high since it is more expensive to mine compared to traditional oil in the Middle East. Foreign oil could stop US oil production by ramping up output to drop the price and make shale oil too expensive. This would have the same goal as further drilling in the US. Who knows what path we end up on.
Yes, we've heard it for years - if only we could increase domestic output we could cut ties to hostile nations. But here's a newsflash - the US oil companies want to export that oil instead of keeping it in the US:
Yes, we've heard it for years - if only we could increase domestic output we could cut ties to hostile nations. But here's a newsflash - the US oil companies want to export that oil instead of keeping it in the US:
I think that article is nonsense and misleading. the quality of shale oil is very poor. 4 million barrels of shale oil is not equivalent to 4 million barrels of conventional oil. the energy equivalent of shale oil is a fraction of that of conventional crude, and has about a quarter of the energy if you are lucky. it takes huge amounts of energy to extract oil that is deeply embedded in rock, so you waste a lot of energy to separate it from the rock and sand. its hardly worth it for companies to make the effort unless they can get a very high price for it on the international market, which means most if not all of it will be sold overseas.
the article does not take into account your net energy gain which will be very low. its an opinion piece from a financial newspaper, which tend to be wildly optimistic about things in order to attract suckers...err I mean investors...so I would take it with a grain of salt. shale oil is fools gold.
I am all for weaning ourselves off of fossil fuels completely. Using oil and others to fuel vehicles at the expense of plastics and other uses is wasteful. That said, I realize that's a pipe dream in the short term and we need oil. So why should we not continue to buy the resources of other countries and continue to sit on our stockpiles for future use? If they want to sell us their oil at the expense of their future economic security, then we should oblige and buy it. Producing it here isn't going to make it any more affordable to buy than if it was produced in Saudi Arabia, so why not continue to save the resources we have?
Because Some Countries use it finance terrorist organizations our Rouge nations with a crazy regime in charge like Iran uses Oil exports it to fund or trade oil for parts from North Korea to build their Uranium enrichment facilities as they try to make nuclear weapons grade Highly enriched Uranium and build nuclear weapons.
Plus we do not have to send troops to go fight any wars over there so it is a major benefit to have energy security.
The stone age did not end because we ran out of stones, and the oil age will not end because we run out of oil.
Replacing middle eastern oil with domestic oil is at best an interim solution to energy independence, one fraught with costs that are probably neither socially nor environmentally acceptable.
I think that article is nonsense and misleading. the quality of shale oil is very poor.
True. Very low in volatiles. We're not gonna get much gasoline from it.
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