Tags: NATO | shale | gas | US

NATO Report: Shale Gas Revolution Could Make OPEC Irrelevant

By    |   Friday, 31 May 2013 11:23 AM

The shale gas revolution in the United States and Canada may change international dynamics and America's relationships with its allies, possibly even making the Persian Gulf irrelevant.

Hydraulic fracturing, or fracking, has helped the United States overtake Saudi Arabia as the largest producer of crude and refined oil and Russia as the top producer of natural gas.

"This is something that is going to change not only the energy market in the world, but everything else," said Jeppe Kofod, deputy head of the Danish delegation to the North Atlantic Treaty Organization (NATO)'s Parliamentary Assembly. "It has huge political and geo-strategic implications."

Editor's Note:
 
The Truth About the Economy — Government Documents Lead to Eerie Conclusion

The shale gas bonanza may prompt the United States to revamp its international priorities as it becomes less reliant on oil imported from the Persian Gulf, Kofod stated in a draft report to the Economics and Security Committee of the NATO Parliamentary Assembly.

"North America as a whole could be heading toward energy self-sufficiency which might render it ever less concerned with events in the Persian Gulf," the report said.

At the same time, India and China are becoming more dependent on Persian Gulf oil, which could open the door to more cooperation on energy security between NATO and those Asian powers, he wrote.

U.S., as well as Canadian, oil production could make NATO nations less sensitive to disruption of oil supplies from other countries, said Phillip Cornell, special advisor to the International Energy Agency.

For instance, the United States and Canada may be less worried about the economic impact on importing nations when considering sanctions against Iran's oil industry.

Russia's role as the dominant supplier of gas to Europe could also be affected, as North American develops liquid natural gas facilitates and begins exporting gas.

"Russia is also going to need to reassess the structure of its energy sector and the way it uses this sector diplomatically," according to the draft report. "It will be under increasing pressure to change as competition rises. ... This could provide an opportunity for a new kind of Western relationship with Russia."

The shale energy revolution also poses challenges to NATO's European allies, as cheaper energy is giving U.S. industry a competitive edge and increasing pressure on Europe's crisis-hit economy.

"High energy prices are a real brake on European economic recovery," Cornell said.
European nations are exploring their own shale oil and gas reserves, but Cornell is pessimistic about its potential, particularly due to widespread public concern fracking.

Still, the United States may be unlikely to start ignoring the Persian Gulf any time soon.

The United States gets 28 percent of its imports from the Persian Gulf and the region remains strategically important for global markets, according to the Global Post.

"It would be a major mistake from a political and security perspective to see this as a blank check to disengage from there," said an energy expert, who wished to remain anonymous, according to Global Post.

Editor's Note: The Truth About the Economy — Government Documents Lead to Eerie Conclusion

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The shale gas revolution in the United States and Canada may change international dynamics and America's relationships with its allies, possibly even making the Persian Gulf irrelevant.
NATO,shale,gas,US
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2013-23-31
Friday, 31 May 2013 11:23 AM
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