A recent article in “Rigzone” discussed the link between energy security and foreign policy. Commentaries by industry experts, analysts and leaders were featured and all were insightful and provocative. However, I found the remarks of Occidental Petroleum’s Ed Djerejian especially interesting. Djerejian is the founding chairman of Rice University’s Baker Institute and recently addressed the Geopolitics of Natural Gas Conference at Rice.
The shale revolution has already increased the world supply of natural gas and is providing cheap energy for U.S. homes and businesses. It has also led to calls for the U.S. to become a significant energy exporter. While some are advocating “energy independence”, Djerejian feels that energy producers and consumers will always need to interact with each other. Consequently he thinks that it is unrealistic to think that the U.S., Europe and the emerging Asian energy consumers will ever be truly “energy independent”. Rather, we should strive for “energy security”.
Historically, nine out of the last ten largest disruptions to the world’s oil supply have been the result of tensions in the Middle East, and energy and geopolitics are the cause of regional instability around the world. Fortunately, the shale revolution, especially in terms of gas, is already helping reverse this trend. Liquid Natural Gas (LNG) that was previously being shipped to the U.S. is now available to consuming nations as an alternative to Russian natural gas. Domestic natural gas has diminished U.S. dependence on Middle Eastern energy and adversely impacted the economics of proposed Iranian gas export projects.
Djerejian feels that if Mexico is successful at transforming its energy industry, and can forge stronger economic trade, political and cultural ties with the U.S. and Canada, North America could become the pre-eminent global power in the 21’st century. However, he adds, this is a mighty big “if”.
To read the article in its entirety, please go to http://www.rigzone.com/news/oil_gas/a/132626/ .