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?
More from CNAS
CommentaryWhy Stopping Environmental Crime Is a Matter of National Security
Last week, the presidency of the Financial Action Task Force, the global intergovernmental standard-setter for combatting illicit financial threats, passed from China to Germa...
By Neil Bhatiya
CommentaryCan Tariffs and Sanctions Lead to a Better Climate Change Strategy?
A little more than two years since he announced in the Rose Garden that the United States was “getting out” of the Paris climate change agreement, President Donald Trump was i...
By Neil Bhatiya
CommentaryClimate Change: The New Asian Drama
When the Swedish economist and sociologist Gunnar Myrdal wrote his magisterial three volume study of postwar economic and political development in Asia, he questioned whether ...
By Neil Bhatiya
Why Abandoning Paris Is a Disaster for America
Ever the showman, President Donald Trump tweeted Wednesday about his soon-to-be-announced decision on whether or not to pull out of the Paris Climate Agreement with the air of...
By Julianne Smith