North America’s monopoly over shale gas and tight oil production won’t last forever. But there’s good reason to believe that the rest of the world will be laggards for awhile.
Steve LeVine at Quartz writes that despite massive shale potential outside of the North America, those deposits are far from being economically viable to exploit. “[D]rillers have yet not managed to economically drill for shale deposits anywhere else,” LeVine writes. “The difference is mainly in the shale geology—drillers have vastly more data on US shale than for any other place on the planet, and have not felt confident yet in what they have found in Europe, China or elsewhere.”
LeVine is correct that economics is a major driver in whether those resources will be recovered anytime soon. But other reasons abound as well. Most of the world’s oilfield services and the physical infrastructure associated with production (pipes, drill bits and other equipment), for example, are located in North America. That is why the immediate event preceding any major shale production outside North America won’t be an announcement that a company has signed a deal to develop the resources; it will be, as LeVine writes, “a company announcing investment in actual production infrastructure.”
Of course, beyond what the industry can control, other factors play into whether shale resources will be exploitable abroad as well. Access to the water resources needed to develop them is paramount. More importantly, sustainable access to water may be difficult to come by – especially for countries rich in shale resources but water scarce, like China and Australia. It is another important example of the water-energy nexus.
So North America will continue to monopolize shale production for now. The question for foreign policy types is whether or not that is a good thing. In 2010, the State Department launched its Unconventional Gas Technical Program aimed at helping other countries develop the skills and technology necessary to safely and economically exploit their shale resources. What other activities can or should the U.S. government be promoting? Are there public-private sector ventures worth pursuing? Or should the United States just enjoy its monopoly on shale production?
"We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.
The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition, we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise. That’s how we will maintain our economic vitality and our national treasure -- our forests and waterways, our crop lands and snow-capped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared."
President Barack Obama, Second Inaugural Address, January 22, 2013
As President Obama begins his second term, there is no shortage of recommendations for how he should prioritize and shape his agenda moving forward.
Two new publications from the Brookings Institution and the Carnegie Endowment for International Peace offer sensible recommendations for how the administration should take advantage of the opportunities and confront the challenges of America’s windfall production in unconventional hydrocarbons – principally shale gas and tight oil. Both hark on the need for a balanced approach that would allow the United States to reap the energy and economic benefits from increased domestic energy production while seriously addressing the climate consequences of continuing to burn petroleum.
In their piece, “Energy and Climate: Black to Gold to Green,” Charles K. Ebinger and Kevin Massy of the Brookings Institution write that the United States can take advantage of oil and gas exports to energy hungry Asia while using the revenue from those exports to fund two potentially transformative technologies that are essential to reducing greenhouse gas emissions – carbon capture and sequestration technology and advanced batteries.
President Barack Obama officially began his second term yesterday when he took the oath of office in the White House Blue Room. This morning, shortly before noon, he will take the oath again on the steps of the West Front of the Capitol and deliver his formal second inaugural address.
What the president will say is a closely held secret, but many expect him to provide a broad vision for his second term priorities. He will have an opportunity to give more specifics in just a few short weeks when the president gives his State of the Union Address.
Will energy, climate change and natural resources be included in the president’s remarks today? It is hard to say. But I suspect there will be some mention. We can look back to four years ago and get a sense of how the president may touch on some of these issues in his remarks and his vision for addressing them:
The vision: “We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories…With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.”
Photo: Supreme Court Chief Justice John Roberts swears in President Barack Obama in the Blue Room of the White House on January 20, 2013. Courtesy of Lawrence Jackson.
In a World Politics Review article published last Friday, I wrote that despite record low ice melt last year, the Arctic’s harsh environment is not giving way to commercial growth as quickly as some may expect. For example, after a hopeful summer, Shell suspended its oil and gas exploratory drilling in part because its equipment kept getting damaged by dangerous ice floes and strong ocean currents. Operations are expected to resume this summer.
As a result, U.S. policymakers charged with safeguarding America’s interests in the Arctic should continually recalibrate their expectations for commercial and other activity in the region in order to enhance their planning efforts. After all, the kinds of resources that the U.S. Coast Guard and other federal agencies will need to bring to bear in the Arctic are linked to the pace and development of activity in the region. And while the Arctic may one day be buzzing with eco-tourists, oil and gas drillers and deep sea fishers, it may fall short of our expectations and we should plan accordingly.
Read the full piece on World Politics Review here.
“Evidence for climate change abounds, from the top of the atmosphere to the depths of the oceans,” reads a draft of the Third National Climate Assessment, published for public review by the U.S. Global Change Research Program on Friday.
The draft study is unequivocal about the state of climate change: it is already affecting Americans and it is primarily driven by human activity. According to an excerpt from the study’s executive summary:
Climate change is already affecting the American people. Certain types of weather events have become more frequent and/or intense, including heat waves, heavy downpours, and, in some regions, floods and droughts. Sea level is rising, oceans are becoming more acidic, and glaciers and arctic sea ice are melting. These changes are part of the pattern of global climate change, which is primarily driven by human activity.
The congressionally mandated study – a result of the Global Change Research Act of 1990 – is intended to provide policymakers with a better understanding of the impact of climate change on U.S interests – from human health and biodiversity to energy production and transportation. The assessment is required every four years, but in practice has been more ad hoc. (This assessment is the third one since the 1990 act was passed by congress.)
The study also provides useful insights to national security and foreign policy practitioners charged with navigating the changing global climate landscape and making sense of the impact on U.S. interests. While the study explores areas for mitigating climate change – that is, reducing greenhouse gas emissions that are adding to climate change – it also emphasizes adaptation to changes that are already locked in as a result of decades of emissions increases. According to the study, “Proactively preparing for climate change can reduce impacts, while also facilitating a more rapid and efficient response to changes as they happen.”
The draft study is worth a closer examination than we can provide here on the blog. Read the full report here.
The Shell drilling rig that ran aground off the Alaskan coast on New Year’s Eve was secured on Monday, officials said. The drilling rig Kulluk, pictured here on January 3, ran aground near an uninhabited island after a winter storm caused it to break free from the tug boat cables used to tow the vessel to Seattle. The grounding is the most recent in a string of setbacks for Shell’s Arctic drilling efforts and has given more evidence to critics charging that Shell and other international drilling companies are not yet Arctic ready.
The prospect of slower commercial activity in the Arctic should give pause to U.S. policymakers making plans for the Arctic. In particular, the resources necessary to protect U.S interests in the region – such as Coast Guard search and rescue and spill response assets – will depend in part on the pace of commercial activity in the region. These recent Arctic incidents should encourage policymakers to recalibrate their assumptions about activity in the region.
Photo: On January 3, the Kulluk remained grounded 40 miles southwest of Kodiak City, Alaska. Courtesy of the U.S. Coast Guard.
Natural resource and environmental issues have gained more attention from the national security and foreign policy communities in recent years– from concerns related to the U.S. rare earth supply chain to opportunities that might accrue from America’s growing abundance of natural gas. Which ones might get pressing attention in 2013? Here’s a list of the top U.S. policy trends I’ll be watching in 2013, in no particular order.
Natural resource trends topped international headlines in 2012 – from illicit resource trade in Afghanistan to energy competition in the South China Sea. Which ones should readers track in 2013? Here’s a list of the five international trends I’ll be watching in 2013, in no particular order.