Energy revolution 3: The new American century

The energy revolution is likely to have profound implications for American policy

Walter Russell Mead at his blog Via Media at the American Interest has his next installment on the change America’s oil and gas boom are having on the country and the larger geopolitical picture. It’s well worth the read, as usual, but his bottom line: “From all these points of view, the new energy picture is almost completely positive. Oil makes everything better. But the environmental question remains.”

Here are some excerpts:

“Get ready for an American century: that appears to be the main consequence of the energy revolution that is now causing economic and political experts to tear up their old forecasts all over the world. The new American century won’t be a repeat of the last one, but in some very important ways the world now looks more likely to continue in the direction of global liberal capitalism that the US—like Britain before us—has seen as its geopolitical goal for many years.

“Energy was critical to the geopolitics of the 20th century; energy shortages shaped some of the strategic decisions that led both Germany and Japan to defeat in World War II, and the struggle over the energy-rich Middle East played an important role in the Cold War. The assumption that the world was at or near “peak oil” has been a driving force behind predictions that the 21st century would be an era of U.S.-China competition as China’s desperate quest for more energy resources led it to push an aggressive global energy policy that would conflict with vital U.S. interests. The assumption that there were few major discoveries left to be made also led many to forecast that the Middle East and especially the Gulf region would continue to be a major fulcrum in global affairs; indeed, countries like Saudi Arabia, with the ability to increase production to meet the thirst of an oil-starved world, would become more important than ever as the geopolitics of oil scarcity took hold.

“But as I’ve been writing recently, none of that looks true anymore. Advances in extraction technology have changed our understanding of the world’s energy future. As I wrote in my last post, the U.S. and Canada each may have more energy potential than the entire Middle East. China also has significant resources. So do Israel and Brazil.

“It is too soon to tell just how much of this potential can be unlocked, but for several years now it has begun to look as if much more of these unconventional resources will be available much sooner than thought, and serious people now argue that the US could pass Saudi Arabia to become the world’s leading oil producer by 2020. [...]

“The effects won’t be trivial. Changes this profound in the energy outlook imply major changes in world politics and given the unique global role of the United States and the global scale of its interests, those changes matter hugely for American foreign policy. Much of the punditry of the last ten years is looking suddenly obsolete; a number of writers are going to hope that some of the books and articles they’ve recently published will be quickly forgotten. They shouldn’t worry; the public is quick to forget, and most prophets of decline and Malthusian struggle will have little trouble in reinventing themselves as analysts of abundance. [...]

“But on the bigger stage of world politics, it’s the United States that benefits most from the energy revolution. To begin with, the core objective of the United States—a reasonably stable, orderly and liberal global system—is a lot easier to achieve in an era of energy abundance than in one of tough resource competition. Oil is a lubricant, and the more the world has, the more smoothly things are likely to run. A world in which jealous, competing states are trying to elbow each other aside to access the last few remaining pools of oil is a much nastier place than one in which the whole oil question is a lot more laid back.”

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3 Comments on “Energy revolution 3: The new American century”

  1. jtbv says:

    Although it also has its downsides the recent developments with schale gas also seem to have a lot of potential to change the balance of power in the world by greatly reducing the dependency of oil.
    Since most schale gas has been found outside OPEC countries it is quite likely that their influence on the global energy markets will decrease.
    Also, the United States seems to have a lot of schale gas which will reduce their interest in the oil-producing Middle East and allow them to refocus their policy elsewhere.

    Like this

  2. Wow! This can be one particular of the most helpful blogs We have ever arrive across on this subject. Basically Fantastic. Im also an expert in this topic therefore I can understand your effort.

    Like this

  3. [...] The Economist is one of our favorite weekly reads. It is packed full of news and information and well-written. That it has a European take on things is an advantage in our eyes becuase it brings a different viewpoint. This week it looks at the changing prospects for the U.S. as the oil and gas boom continues to out pace expectations and policy. It makes a good companion reading with our post yesterday linking to Walter Russell Mead’s disquisition on America’s future. [...]

    Like this


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