A REPRIEVE? U.S. ENERGY BOOM IS SAID TO PERPETUATE AMERICAN POWER AND PROSPERITY

by Tom Kando

There has been a slew of articles recently making the case that America’s oil and gas boom is going to strengthen the American economy, prolong America’s preponderance and invalidate all the recent talk about American decline. For example, Sean Cockerham writes in the November 28 issue of the Sacramento Bee of “an energy revolution that seems likely to transform the globe.”

On November 29, Tim Johnson’s syndicated column in the same newspaper states that “as the center of gravity of global energy production (swings) toward the Americas, “U.S. experts say that this will prolong the U.S.’s position as the predominant global superpower. Arab nations...will be weakened...A big loser will be Russia...”

       These authors, quoting various analysts, proceed to list many benefits likely to accrue to the U.S.:

        ✔ There will be a resurgence of American manufacturing.

        ✔ Incessant U.S. military intervention overseas will cease: For the past 40 years, America has waged many distant wars and supported corrupt and autocratic governments. It has, at taxpayers expense, protected the sea lanes for world commerce, with the Chinese and other Asians free-riding on the U.S. security presence.

        ✔ U.S. reliance on Middle Eastern oil will end, and so will therefore America’s obsession with the Middle East.

         How is one to react to this? Is this good news or bad news? Is it TRUE?

         I have raised this issue informally with some people around me. The reaction has been interesting. By and large, people already have their minds made up, and facts don’t matter much to them: The immediate reaction from those on the Left has been that this is all BS and that it won’t make any difference: the U.S. and the world will continue to make a mess of things. On the other hand, those on the Right welcome this as the ace in the hole which will guarantee continued US hegemony.

Let’s look at the facts:
          Yes, American oil and gas production has been exploding, largely due to the shale revolution, which uses fracking: Hydraulic fracturing involves horizontal drilling and the use of high-pressure water and chemicals pumped underground to break up shale rock.

          As a result, U.S. crude oil production is up 40% over the past 5 years. In October 2013, American oil production for the first time began to outstrip imports. “In a few short years, we have been propelled from a country largely dependent on oil imports to one...soon ...(to be) the world’s top oil producer.” (Cockerham, Nov. 28, ‘13). We have just overtaken Russia, and we will surpass Saudi Arabia in 2015 (ibid.). America has ALREADY become the world’s largest producer of natural gas. (See attached graph).

           The new boom is occurring in North Dakota, Texas, California, even Ohio, Pennsylvania, Kansas and other states.

           Amy Myers Jaffe, executive director for energy and sustainability at the University of California, Davis, says that we won’t run out of fossil fuels “in my lifetime, maybe not even in my children’s lifetime” (Sacramento Bee, Nov. 28, ‘13). President Obama recently said that “the nation has a supply of natural gas that can last for nearly 100 years” (ibid.).

           The U.S. is not the only country with such resources (China has the biggest shale). However, it is the “only one in a position to take advantage of them.” (Cockerham, November 28, ‘13). Europe’s environmental opposition to fracking is much stronger. America has unique access to the necessary cutting-edge technology, infrastructure, property laws, risk capital and private resource ownership. We also possess a huge number of (horizontal) drilling rigs. “U.S. companies own nearly 60% of active drilling rigs in the world...The number of wells drilled in Texas compared to Saudi Arabia is 1,000 to one” (Johnson, Nov. 29, ‘13).

           The Good: Johnson writes that there are “Powerful arguments in favor of the benefits of the U.S. fracking bonanza” (Sacramento Bee, November 28,’13).

         ✔ Perhaps the most obvious one is the reduced need for America’s global military role. Simply: less war. Who can be against this?

        ✔ Also, America’s balance of trade - in the red for many decades - will improve.

        ✔ OPEC’s clout will decline.

        ✔ Finally, natural gas is cleaner than coal, which it will increasingly replace. A caveat:

       ✔ The boom may not last. The new fields will decline.

       The Bad:

        ✔ Fracking is potentially devastating to the environment. It is a threat to air and water. It could ruin the water supply, cause earthquakes, sinkholes and other disasters. Most of the drilling is done irresponsibly, since there is no legislation regarding the extraction procedure. Already, several Colorado cities ban fracking, as do New York and North Carolina.

        ✔ Additionally, this bonanza will prolong our reliance on fossil fuels, and aggravate global warming.

        ✔ America-haters (on the Left, mostly) will also include in the “bad” column America’s economic (and political) revival, the “postponement” of its decline. Insofar as this is just irrational anti-Americanism, it has no merit. When a country suddenly finds a trove of minerals which enables it to rely on its own domestic resources and reduce its military operations overseas, how can this be bad?

        ✔ On the Right, there will be those who’ll deplore America’s reduced role as a world policeman. This, too, is stupid. In conclusion, there are plenty of reasons to justify AMBIVALENCE about America’s new energy bonanza. That is the one word which describes my feelings in this matter.

leave comment here

© Tom Kando 2013