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US Energy Policy and Shale Gas Revolution
The US shale gas revolution is having a significant impact on US energy policy and
energy diplomacy and foreign policy. The precise ways in which shale over the long
term will have influence have yet to be seen, as global energy oversupply and the
stalling of America’s new phase of energy development have affected matters.
While much is made in some quarters about new US energy independence and the
implications of decreased reliance on the Middle East, the fact is that the overall
world economy on which America’s economy and well-being very much depend is
in turn still deeply dependent upon imported energy, of which the major Middle
Eastern producers are and will remain the main market setters.
Obama caught all conventional oil and gas producers in OPEC and outside OPEC
such as Caspian basin literal states by surprise. Shale oil production passed well
over 500 M/B/D in 2015, though it lost over 2.5 M/B/D of its production volume by
2016. Shale oil initiated conventional oil producers to flood the market and bring
down the price of oil. Saudi Arabia played a leading role in this. Many oil-producing
countries in and outside OPEC were hit rather hard by oil prices losing more than
half of their value, but on the other hand nearly 3.00 million barrels of shale oil went
out of stream and it may be too costly to get back on stream any time soon (Author’s
interview with Feridon Barkeshli 2017).
The blueprint document of the Obama administration outlined its interest in nontraditional gas, particularly shale. The administration noted that such forms of gas
were an integral part of America’s domestic resources and that future domestic supply would be met by the development of shale gas. The US has previously been
concerned about the effects of supply interruption and price shifts which impact
gasoline. However, the development of shale resources has put pay to this. Post
energy boom, the American administration took “a quiet response to the long-term
drop in its domestic energy production capacity” (report 2014:322).
Shale gas and its effects on US foreign policy have had no direct relations US
foreign policy toward Central Asia and the Caspian Sea region, but it is clear that the
US has used increased domestic oil and gas production capacity and energy boom
to aid in its goal of imposing sanction against Iran over Iran nuclear program. Iran,
which shares the Caspian Sea with four other countries, suffered heavily as a result
of EU and US sanctions. Iranian oil production capacity has decreased dramatically
in the light of sanctions, and Iran has lost its share in the world oil market and lost
its role as a major oil producer among OPEC nations. According to Iranian officials,
Iran needs around $100 billion in foreign investment in the oil, gas, and petrochemical sector. In the oil sector, most of Iran’s oil wells are in its second half of life, with
8% of oil production annually dropping automatically, and Iran needs technology
and capital for foreign countries to increase its oil efficiency. If new sanctions are
imposed by the US government against those countries which wish to invest in Iran,
the likelihood that energy companies will be hesitant to invest in the Iranian energy
industry will increase (www.sputniknews.com 2017).
US Energy Policy and Shale Gas Revolution
US Energy Policy and Shale Gas Revolution
The US shale gas revolution is having a significant impact on US energy policy and
energy diplomacy and foreign policy. The precise ways in which shale over the long
term will have influence have yet to be seen, as global energy oversupply and the
stalling of America’s new phase of energy development have affected matters.
While much is made in some quarters about new US energy independence and the
implications of decreased reliance on the Middle East, the fact is that the overall
world economy on which America’s economy and well-being very much depend is
in turn still deeply dependent upon imported energy, of which the major Middle
Eastern producers are and will remain the main market setters.
Obama caught all conventional oil and gas producers in OPEC and outside OPEC
such as Caspian basin literal states by surprise. Shale oil production passed well
over 500 M/B/D in 2015, though it lost over 2.5 M/B/D of its production volume by
2016. Shale oil initiated conventional oil producers to flood the market and bring
down the price of oil. Saudi Arabia played a leading role in this. Many oil-producing
countries in and outside OPEC were hit rather hard by oil prices losing more than
half of their value, but on the other hand nearly 3.00 million barrels of shale oil went
out of stream and it may be too costly to get back on stream any time soon (Author’s
interview with Feridon Barkeshli 2017).
The blueprint document of the Obama administration outlined its interest in nontraditional gas, particularly shale. The administration noted that such forms of gas
were an integral part of America’s domestic resources and that future domestic supply would be met by the development of shale gas. The US has previously been
concerned about the effects of supply interruption and price shifts which impact
gasoline. However, the development of shale resources has put pay to this. Post
energy boom, the American administration took “a quiet response to the long-term
drop in its domestic energy production capacity” (report 2014:322).
Shale gas and its effects on US foreign policy have had no direct relations US
foreign policy toward Central Asia and the Caspian Sea region, but it is clear that the
US has used increased domestic oil and gas production capacity and energy boom
to aid in its goal of imposing sanction against Iran over Iran nuclear program. Iran,
which shares the Caspian Sea with four other countries, suffered heavily as a result
of EU and US sanctions. Iranian oil production capacity has decreased dramatically
in the light of sanctions, and Iran has lost its share in the world oil market and lost
its role as a major oil producer among OPEC nations. According to Iranian officials,
Iran needs around $100 billion in foreign investment in the oil, gas, and petrochemical sector. In the oil sector, most of Iran’s oil wells are in its second half of life, with
8% of oil production annually dropping automatically, and Iran needs technology
and capital for foreign countries to increase its oil efficiency. If new sanctions are
imposed by the US government against those countries which wish to invest in Iran,
the likelihood that energy companies will be hesitant to invest in the Iranian energy
industry will increase (www.sputniknews.com 2017).
US Energy Policy and Shale Gas Revolution