The energy-short democracies — the United States, most European Union nations, Japan and Israel — are today mostly on the defensive, while energy-rich countries run by strong men — Russia, various Middle Eastern states, and Venezuela — are flexing their muscles.
Within a decade, this energy order could flip. Many of the Western democracies are likely to become major oil and gas producers, helping to glut the world and collapse energy prices. And todayÂ’s energy-rich countries, most having undiversified economies, will then lose the lionÂ’s share of their revenues and become neutered politically.
The game-changer is “unconventional fossil fuels,” much of it trapped in shale — rock that often contains oil or gas. In the case of gas, the U.S. is developing so much, so fast in so many places that the domestic price for natural gas has more than halved. Whereas five years ago the U.S. planned to build major terminuses to import gas, it is now becoming a major gas exporter. America’s Marcellus Shale formation alone — a natural gas reservoir that lies more than a mile underground beneath Pennsylvania, New York, West Virginia and Ohio — has enough gas to supply the Eastern U.S. for decades. |