Conservative think tank advocates for responsible development of domestic resources, saying increased U.S. production could curb Russia’s petro-power
By Summit Voice
SUMMIT COUNTY — In Colorado, the debate over natural gas production from shale formations like those in the northwestern part of the state often focuses on environmental impacts, including the growing fragmentation of wildlife habitat and concerns about air and water quality from hydraulic fracturing, or fracking.
But there’s also a geopolitical dimension dimension to the rising tide of U.S. gas production. By some recent estimates, shale-gas production will quadruple by 2040, to more than 40 billion cubic feet per day. And that level of production has the potential to affect Russia’s ability to wield an “energy weapon” over its European customers, according to a recent study by the Baker institute.
In the past, Russia has threatened to shut down critical natural gas pipelines to Europe as a way of exerting political influence.
According to a study from the Rice University’s Baker Institute, Russia’s natural gas market share in Western Europe could decline to as little as 13 percent by 2040 as U.S. production increases.
The study was funded by the U.S. Department of Energy. It incorporates independent scientific and economic literature on shale costs and resources, including assessments by organizations such as the U.S. Geological Survey, the Potential Gas Committee and scholarly peer-reviewed papers of the American Association of Petroleum Geologists.
“The geopolitical repercussions of expanding U.S. shale gas production are going to be enormous,” said Amy Myers Jaffe, the Wallace S. Wilson Fellow for Energy Studies and one of the authors of the study. “By increasing alternative supplies to Europe in the form of liquefied natural gas displaced from the U.S. market, the petro-power of Russia, Venezuela and Iran is faltering on the back of plentiful American natural gas supply.”
The study concludes that timely development of U.S. shale gas resources will limit the need for the United States to import liquid natural gas for at least two to three decades, thereby reducing negative energy-related stress on the U.S. trade deficit and economy. By creating greater competition among gas suppliers in global markets, shale gas will also lower the cost to average Americans of reducing greenhouse gases as the country moves to lower-carbon fuels.
“The idea that shale gas is a flash-in-the-pan is simply incorrect,” said Kenneth Medlock III, the James A. Baker III and Susan G. Baker Fellow for Energy and Resources Economics and co-author of the study. “The geologic data on the shale resource is hard science and the innovations that have occurred in the field to make this resource accessible are nothing short of game-changing. In fact, we continue to learn as we progress in this play, and it is vital that we understand and embrace the opportune circumstances that shale resources provide. U.S. policymakers should not get diverted from the real opportunities that responsible development of our domestic shale resources present.”
Other findings of the study include that U.S. shale gas will:
• Reduce competition for LNG supplies from the Middle East and thereby moderate prices and spur greater use of natural gas, an outcome with significant implications for global environmental objectives.
• Combat the long-term potential monopoly power of a “gas OPEC.”
• Reduce U.S. and Chinese dependence on Middle East natural gas supplies, lowering the incentives for geopolitical and commercial competition between the two largest consuming countries and providing both countries with new opportunities to diversify their energy supply.
• Reduce Iran’s ability to tap energy diplomacy as a means to strengthen its regional power or to buttress its nuclear aspirations.