American Shale Bolsters National Security, Job Growth

A new Center for a New American Security report — “Energy Rush Shale Production and U.S. National Security” — lays out the clear and positive benefits for U.S. national security and economic competitiveness enabled by the safe, well-regulated development of America’s abundant shale resources.

And the bipartisan experts involved in preparing the report – including Bill Richardson, who was governor of New Mexico, U.S. ambassador to the U.N. and U.S. energy secretary, along with John Warner, who chaired the U.S. Senate Armed Services Committee and served as secretary of the U.S. navy – write this in a Reuters column under the headline “The shale factor in U.S. national security”:

The boom in domestic shale oil and gas production has increased U.S. prosperity and economic competitiveness. But the potential for this to enhance our national security remains largely unrealized. … Energy exports, particularly to our Asian allies, would also strengthen strategic links. These exports should be viewed as a tool of economic statecraft that can help keep international markets supplied and global prices stable. In addition, it would strengthen the power of U.S. sanctions on countries like Iran, while lessening their impact on U.S. consumers and increasing international collaboration.

Here are key excerpts from the report:

  • The energy boom will have profound implications on energy markets and political relationships between major consumers and producers.
  • The unconventional energy boom is also helping to jumpstart the broader U.S. economy.
  • Prolific natural gas supplies have reduced electric power costs and are fueling a renaissance in industrial manufacturing of energy-intensive goods.
  • The United States has a tremendous opportunity to put its new unconventional energy supply into the service of strong U.S. leadership at home and abroad in the years to come.
  • Policy should advance U.S. interests and should build U.S. energy security and economic resiliency to weather the complex and volatile global energy market.
  • One of the most profound effects of the shale boom has been its role in bringing down prices over the past several years. New volumes of energy resources from the United States have fundamentally changed energy markets, pricing and forecasts.
  • The unconventional boom has also given the U.S. refined-product sector a competitive global edge, particularly over Europe.

From the Author’s blog post:

U.S. energy production has expanded dramatically over the last five years. So has the potential for this resource to bolster and advance economic and national security interests. … According to the Energy Information Administration (EIA) oil production has increased by 50%, natural gas by 22%, and natural gas liquids critical for petrochemical production by 41%, in the last five years. These dramatic increases have helped to stabilize or drop energy prices, an important driver of the recent renaissance in U.S. manufacturing. Energy imports are also at the lowest level they have been in the past 20 years, while U.S. reserves in the ground jumped by 37% for oil and 41% for gas from 2008 to 2011, according to EIA.

And here’s even more encouraging news tied to responsible shale production:

  • SHALE STRENGTHENS U.S. TRADE BALANCE: The U.S. trade deficit in 2013 was the smallest since 2009, even as it ticked up at year’s end, as rising fuel exports and falling imports propelled the world’s biggest economy further toward energy independence. … “There’s still a slight tendency for the deficit to be narrowing. The reduced U.S. dependence on imported energy is quite an important factor.” Exports of petroleum products climbed 10.9 percent in 2013 to a record $137 billion, while imports fell 11 percent to three-year low of $369.3 billion. … The trends continue to gain momentum.  … Energy exports also will probably be boosted by construction of liquefied natural gas terminals as companies take advantage of a boom in hydraulic fracturing, or fracking, a drilling technique that has led to record natural gas production. As of Dec. 31, the Obama administration had approved export permits for five LNG terminals, the first of which could go online by the end of 2015. (Bloomberg, 2/6/14)
  • SHALE BOOSTS U.S. MANUFACTURING: Depressed natural gas prices in the U.S. are aiding domestic plastic production, according to a report from EIA. … Raw plastics…have recovered from the recession more easily given strong exports amid international demand. Exports of raw plastic, or resin, may continue to increase with U.S. natural gas at cheaper prices than foreign resources, the EIA noted. Plastic resin production is one of the largest energy consumers in the manufacturing sector… The Federal Reserve said last month that overall production of plastics and rubber products rose 4.8% year-over-year in the fourth quarter of 2013. (Fox Business, 2/5/14)
  • HYDRAULIC FRACTURING IS PROVEN, SAFE: Former U.S. Secretary of Interior Ken Salazar said Wednesday morning that he believes hydraulic fracturing is safe, and the energy industry should work to convince the public that it doesn’t pose a safety threat. … “From my opinion and from what I’ve seen … I believe hydraulic fracking is, in fact, safe,” Salazar said. … “We know that, from everything we’ve seen, there’s not a single case where hydraulic fracking has created an environmental problem for anyone,” Salazar said. “We need to make sure that story is told.” Salazar says he came to his conclusion after speaking wither others in the federal government, including scientists from the U.S. Geological Survey and Steven Chu, the Nobel Prize-winning former U.S. Energy Secretary who also says fracking is safe. … Salazar said fracking, in part, is the reason the country has enjoyed a energy boom that has helped move it towards energy independence and reduced the price of fuel. “We’re creating a secure world for ourselves and for our children,” he said.  (Houston Chronicle, 2/5/14)
  • STRONGER GLOBAL FOOTING: The United States is undergoing one of the quietest economic revolutions in history. Unthinkable only a few years ago, the shale gas revolution has drastically reduced domestic natural gas prices, making it possible for the U.S. to…reduce the overall carbon intensiveness of our economy, and spur domestic manufacturing and petrochemicals industries.. … LNG exports would provide a boost to the U.S. economy by creating jobs and furthering shale development. … But beyond the economic arguments, this is an opportunity for the United States to demonstrate its commitment to European security, without more troops or costly military commitments, which are mainly of symbolic value. … Exporting LNG to Europe would strengthen some of our most important and oldest alliances, and would reaffirm our commitment to our newer partners in the region. … Beyond the benefits to European states, LNG exports to Europe would create U.S. jobs and provide a boost to the domestic gas industry. … Such an opportunity, where the U.S. can create goodwill and gain influence in another part of the world while also boosting its own economy, is rare. We should take advantage of it. (National Interest column, 2/5/14)