The rapid development of hydraulic fracturing, or “fracking,” to produce domestic shale gas and oil should make America a much stronger player on the global energy scene. Our shale revolution has made us the world’s largest natural-gas producer, and we’ll soon pass Russia and Saudi Arabia as the foremost oil-producing country.
While the economic benefits of shale energy are the subject of much attention, the foreign-policy implications have so far flown under the radar. We need to realize that our shale-energy technology and vast new supplies of oil and gas are the key to dramatic shifts in geopolitical power. Because shale deposits lie under many nations, we can use a global shale revolution to erode the power held by energy exporters like Russia, Iran and Venezuela.
Already, we’re using shale development to check Russian President Vladimir Putin’s natural-gas hold on Eastern Europe. In 2010, the State Department launched an initiative to provide technical and regulatory assistance to nations looking to tap shale resources of their own.
Cooperation between the United States, Poland and Ukraine has been close.
Shale-gas reserves in Poland and Ukraine hold the promise of freedom from Russia’s monopoly on the region’s natural-gas supply. Energy independence in Poland and Ukraine would not only hit Mr. Putin where it hurts the most — his wallet — but provide both nations the opportunity to distance themselves from Moscow and tighten relations with the United States and the European Union.
While we’re having some success in Eastern Europe, we could leverage the shale revolution to achieve far more. Unfortunately, the Obama administration seems to be the main obstacle to making that happen.
The administration is delaying permits to export liquefied natural gas to key allies, refusing to open up additional federal land to oil and gas exploration, and now wants new taxes on the very companies that have provided our surging energy production. All of these policies are counterproductive to our foreign policy and economic goals.
For example, by slow-walking liquefied natural-gas exports to non-free-trade partners such as Japan, which is begging to buy U.S. natural gas, we’re shorting the opportunity to generate billions of dollars in new economic activity while strengthening our relationship with a key Pacific ally. Increasing cooperation with Japan will be critical as we seek to deal with China’s influence in the region.
Also, the administration’s unwillingness to open up new federal lands to oil and gas development is as misguided as the continued failure to approve the Keystone XL pipeline from Canada. Meanwhile, the president has called for a new Energy Security Trust to fund research for advanced energy and transportation technology. He plans to pay for the fund with royalties from oil and gas drilling on federal lands and yet still refuses to open up new lands for drilling, shortchanging his own fund and hampering our ability to improve our energy security.
The president’s repeated calls to raise taxes on major oil and gas companies will only reduce our energy production, cut government tax revenues and slow the spread of shale-energy technology to our allies. In fact, it is such U.S. oil and gas producers — Chevron, Conoco Phillips and Shell — that are leading the charge to develop Poland and Ukraine’s shale-energy basins.
The administration should take every step possible to encourage the shale revolution both here and abroad. Expediting the approval of liquefied natural-gas exports is a big step in the right direction. Opening up new federal lands to energy production and dropping the misguided call for new taxes on our oil and gas companies will also be wins for both our foreign policy and the economy.
J. Winston Porter, former assistant administrator of the Environmental Protection Agency, is an energy and environmental consultant in Savannah, Ga.
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