A Totally Fracked Planet

 | 

For several years, in these pages and elsewhere, I have noted America’s steady progress toward true energy independence — not because of government help but in spite of it.

We will reach energy independence in the not too distant future, thanks not to any corrupt crony green energy industry (solar, wind, ethanol, or biodiesel) but to the vast resources of shale oil and gas made available by advanced fracking technology.

I have not reported on recent developments on fracking progress abroad. A couple of recent articles provide interesting food for geopolitical thought.

First, the report out of Aussie Land of a shale oil field with the promise of prodigious production. The Arckaringa Basin field in South Australia is now being explored by seismic mapping and drilling. The field has between 3.5 billion and a mind-blowing 233 billion barrels of oil (BBO). Even at the lower end of the estimate, it would be on a par with our own shale oil production.

But if the field contains anything like the upper end of the estimate, it would be a geopolitical game changer, with a value, at current prices, of about $20 trillion, which would make Australians among the richest people on earth. This would be several times more than Australia’s current proven reserves of oil, and would turn the country into an oil exporter on a par with Saudi Arabia (with estimated reserves of 263 BBO, or billion barrels of oil) and surpassing Venezuela (211 BBO), Canada (175 BBO), Iran (137 BBO) and Iraq (115 BBO).

Here is both good news and bad news, geopolitically. The good news is that Australia is a long-standing close American ally, so the prospect of its becoming a major exporter (instead of a minor importer) of petroleum means lower prices for us and another source of world oil that is favorable to us (unlike Iran, Venezuela, and to some degree Saudi Arabia).

The bad news is that Australia now becomes a possible target for energy-hungry China, which is growing rapidly in military might and economic size (in fact, it just surpassed the US to become the world’s largest trading economy, holding $1.2 trillion in American assets).

The second report is a Wall Street Journal article about the shale gas boom in Eastern Europe. The pace of exploration in Central and Eastern Europe has exploded, with British/Dutch-owned Royal Dutch Shell, American-owned ConocoPhillips, and French-owned Total SA buying up exploration rights in Poland. Poland is sitting on top of shale natural gas reserves equal to 35-65 years of its current consumption.

Ukraine is also blessed with shale-gas reserves. Chevron, TNK-BP (a joint venture of BP and a group of Russian investors), and Eni (an Italian company), are all vying to develop shale gas there.

Environmentalist groups in Bulgaria, the Czech Republic, and Romania have gotten their governments to put a moratorium on fracking (which American environmentalists are pushing for too). That opposition, together with the higher costs of drilling in Europe (in part because deposits lie deeper there) and the fact that contracts with Russia’s Gazprom are locked in for decades, make development go more slowly.

But the long-term geopolitical prospect is that Central and Eastern Europe — once enslaved by the Soviet regime, now bullied by Putin’s quasi-dictatorship — now have it within their power to free themselves, eventually, from energy dependency on Russia.

Fracking is leading to some interesting geopolitics. One hopes it will lead to some productive politics, right here at home.




Share This
Syndicate content

© Copyright 2017 Liberty Foundation. All rights reserved.



Opinions expressed in Liberty are those of the authors and not necessarily those of the Liberty Foundation.

All letters to the editor are assumed to be for publication unless otherwise indicated.