Will American Self-Sufficiency in Oil Affect its Foreign Policy?

Henry Srebrnik, [Summerside, PEI] Journal Pioneer

In recent years, the new technology of hydraulic fracturing, or fracking, has made the United States the number one producer of natural gas in the world, and may soon make it first in oil production. The process involves injecting chemicals deep underground to fracture the rocks around oil and gas deposits.

Output from oil fracking in the U.S. has increased from about one million barrels per day in 2010 to more than three million barrels per day at the end of 2013. Total U.S. oil production has risen from 5.6 million barrels a day in 2010 to the current rate of 9.3 million barrels a day, nearly as high as daily oil production in Saudi Arabia.

This has led to a decrease in America reliance on imported oil from volatile and uncertain sources in the Middle East, Venezuela, and elsewhere.

Though the U.S. still gets almost 40 per cent of its petroleum from abroad – about 15 per cent from Saudi Arabia, 13 per cent from Venezuela, and 10 per cent from Nigeria — oil imports have been dropping since 2005, and are down from a high of 60 per cent in 2006. Some analysts predict that the country might become self-sufficient in energy by 2030.

This is an important development, given the extreme uncertainty that has now overtaken many oil and gas producing countries since the start of the Arab Spring at the end of 2010. It would be folly for the U.S. to find itself at the mercy of countries such as Algeria, Libya, and Iraq; even the future of Saudi Arabia and oil-producing Gulf states remains uncertain.

Dependence on Middle East oil has shaped American foreign, national security and defence policies for most of the last half century. Freeing itself from it will enable Washington to craft a foreign policy that isn’t hostage to such considerations.

Peter Zeihan, author of the recently-published book “The Accidental Superpower”, has written that “the U.S. will be energy independent by the end of 2016,” and this “is severing the strongest link between us in North America and the rest of the world. The Middle East is becoming someone else’s problem.”

Indeed, as Loren B. Thompson, a specialist on national security, suggested in a Forbes magazine article published in 2012, America might indeed decide that it has “had enough of being the policeman on the beat in the Persian Gulf.”

Certainly the domestic oil industry is pleased. The American Petroleum Institute is the largest trade association in the nation for the oil and natural gas industry. In the past few years the Institute has been airing a series of television advertisements, mainly on American newscasts, in which spokeswoman Brooke Alexander encourages people to visit their website, EnergyTomorrow.org.

The latest ad asserts that this new technology “is safely recovering lots more oil and natural gas, supporting millions of new jobs, billions in tax revenue, and a new century of American energy security.”

The ad plays off the theme of American nationalism, as Alexander assures us, against a backdrop of red, white and blue fireworks, that “the new energy superpower is red, white...and blue.” It’s quite effective as propaganda.

Not everyone paints such a rosy picture. In actual fact, fracking is highly controversial. Its opponents argue that the environmental impacts include the risks of contaminating ground water, harming wildlife, potentially triggering earthquakes, and other hazards to public health and the environment. In many jurisdictions public protests have led to it being curtailed or banned entirely.

For that reason, the Obama administration has drafted regulations to monitor fracking and set safety standards for how companies can store used chemicals around well sites on federal land. They will cover about 100,000 oil and gas wells drilled on public lands.

Since oil extracted through fracking is more expensive to produce, the recent drop in the price of oil has also hurt the industry.