Shale Gas to Weaken Russian and Iran
Timothy Birdnow
New sources of natural gas (such as shale) are imperiling the Russian and Iranian markets, according to a new study by the Baker Institute.
http://www.bakerinstitute.org/publications/EF-pub-DOEShaleGas-07192011.pdf/view
According to the Rice University press release:
http://www.media.rice.edu/media/NewsBot.asp?MODE=VIEW&ID=15967&SnID=993796610
Rising U.S. natural gas production from shale formations has already played a critical role in weakening Russia’s ability to wield an "energy weapon" over its European customers, and this trend will accelerate in the coming decades, according to a new Baker Institute study, "Shale Gas and U.S. National Security." The study, funded by the U.S. Department of Energy, projects that Russia’s natural gas market share in Western Europe will decline to as little as 13 percent by 2040, down from 27 percent in 2009.
"The geopolitical repercussions of expanding U.S. shale gas production are going to be enormous," said Amy Myers Jaffe, the Wallace S. Wilson Fellow for Energy Studies and one of the authors of the study. "By increasing alternative supplies to Europe in the form of liquefied natural gas (LNG) displaced from the U.S. market, the petro-power of Russia, Venezuela and Iran is faltering on the back of plentiful American natural gas supply."
The study concludes that timely development of U.S. shale gas resources will limit the need for the United States to import LNG for at least two to three decades, thereby reducing negative energy-related stress on the U.S. trade deficit and economy. By creating greater competition among gas suppliers in global markets, shale gas will also lower the cost to average Americans of reducing greenhouse gases as the country moves to lower carbon fuels.
The Baker Institute study dismisses the notion, recently debated in the U.S. media, that the shale gas revolution is a transitory occurrence. The study projects that U.S. shale production will more than quadruple by 2040 from 2010 levels of more than 10 billion cubic feet per day, reaching more than 50 percent of total U.S. natural gas production by the 2030s. The study incorporates independent scientific and economic literature on shale costs and resources, including assessments by organizations such as the U.S. Geological Survey, the Potential Gas Committee and scholarly peer-reviewed papers of the American Association of Petroleum Geologists.
"The idea that shale gas is a flash-in-the-pan is simply incorrect," said Kenneth Medlock III, the James A. Baker III and Susan G. Baker Fellow for Energy and Resources Economics and co-author of the study. "The geologic data on the shale resource is hard science and the innovations that have occurred in the field to make this resource accessible are nothing short of game-changing. In fact, we continue to learn as we progress in this play, and it is vital that we understand and embrace the opportune circumstances that shale resources provide. U.S. policymakers should not get diverted from the real opportunities that responsible development of our domestic shale resources present."
Other findings of the study include that U.S. shale gas will:
Reduce competition for LNG supplies from the Middle East and thereby moderate prices and spur greater use of natural gas, an outcome with significant implications for global environmental objectives.
Combat the long-term potential monopoly power of a "gas OPEC."
Reduce U.S. and Chinese dependence on Middle East natural gas supplies, lowering the incentives for geopolitical and commercial competition between the two largest consuming countries and providing both countries with new opportunities to diversify their energy supply.
Reduce Iran’s ability to tap energy diplomacy as a means to strengthen its regional power or to buttress its nuclear aspirations
End excerpt.
The Russians will not go down quietly, and neither will Iran. Both of these nations have used the revenues generated by fossil fuels to build either more fossil-fuel capabilities or to upgrade their militaries. What they haven't done is build their nations with this windfall. This guarantees an economic downturn of likely a severe nature in the future.
"Drill here, drill now!" led George W. Bush to open offshore drilling closed by his father when prices spiked up over four dollars a gallon for gasoline, and the result was an almost immediate drop in oil prices as the oil market feared a new competitor coming online. This triggered a crisis in the Russian economy as oil revenues dropped off and the tax base shrank. It forced Russia to pull out of it's war with Georgia, as I chronicled at Pajamas Media. http://pajamasmedia.com/blog/drill-here-drill-now-helped-end-russia-georgia-war/
It is to be hoped that America opening new sources of gas and oil will do something similar to our good friends the Russians and Iranians. Russia and Iran have a strategic partnership, and it is with Russian assistance that Iran has been developing nuclear weapons and the systems to deliver them. They are truly part of an axis of evil; Russia helps Iran and Iran promotes terrorism throughout the world. Cut off their funds and all that mischief stops.
But it could drive a desperate gambit. Therein lies the danger.
Hat tip: CCNET
New sources of natural gas (such as shale) are imperiling the Russian and Iranian markets, according to a new study by the Baker Institute.
http://www.bakerinstitute.org/publications/EF-pub-DOEShaleGas-07192011.pdf/view
According to the Rice University press release:
http://www.media.rice.edu/media/NewsBot.asp?MODE=VIEW&ID=15967&SnID=993796610
Rising U.S. natural gas production from shale formations has already played a critical role in weakening Russia’s ability to wield an "energy weapon" over its European customers, and this trend will accelerate in the coming decades, according to a new Baker Institute study, "Shale Gas and U.S. National Security." The study, funded by the U.S. Department of Energy, projects that Russia’s natural gas market share in Western Europe will decline to as little as 13 percent by 2040, down from 27 percent in 2009.
"The geopolitical repercussions of expanding U.S. shale gas production are going to be enormous," said Amy Myers Jaffe, the Wallace S. Wilson Fellow for Energy Studies and one of the authors of the study. "By increasing alternative supplies to Europe in the form of liquefied natural gas (LNG) displaced from the U.S. market, the petro-power of Russia, Venezuela and Iran is faltering on the back of plentiful American natural gas supply."
The study concludes that timely development of U.S. shale gas resources will limit the need for the United States to import LNG for at least two to three decades, thereby reducing negative energy-related stress on the U.S. trade deficit and economy. By creating greater competition among gas suppliers in global markets, shale gas will also lower the cost to average Americans of reducing greenhouse gases as the country moves to lower carbon fuels.
The Baker Institute study dismisses the notion, recently debated in the U.S. media, that the shale gas revolution is a transitory occurrence. The study projects that U.S. shale production will more than quadruple by 2040 from 2010 levels of more than 10 billion cubic feet per day, reaching more than 50 percent of total U.S. natural gas production by the 2030s. The study incorporates independent scientific and economic literature on shale costs and resources, including assessments by organizations such as the U.S. Geological Survey, the Potential Gas Committee and scholarly peer-reviewed papers of the American Association of Petroleum Geologists.
"The idea that shale gas is a flash-in-the-pan is simply incorrect," said Kenneth Medlock III, the James A. Baker III and Susan G. Baker Fellow for Energy and Resources Economics and co-author of the study. "The geologic data on the shale resource is hard science and the innovations that have occurred in the field to make this resource accessible are nothing short of game-changing. In fact, we continue to learn as we progress in this play, and it is vital that we understand and embrace the opportune circumstances that shale resources provide. U.S. policymakers should not get diverted from the real opportunities that responsible development of our domestic shale resources present."
Other findings of the study include that U.S. shale gas will:
Reduce competition for LNG supplies from the Middle East and thereby moderate prices and spur greater use of natural gas, an outcome with significant implications for global environmental objectives.
Combat the long-term potential monopoly power of a "gas OPEC."
Reduce U.S. and Chinese dependence on Middle East natural gas supplies, lowering the incentives for geopolitical and commercial competition between the two largest consuming countries and providing both countries with new opportunities to diversify their energy supply.
Reduce Iran’s ability to tap energy diplomacy as a means to strengthen its regional power or to buttress its nuclear aspirations
End excerpt.
The Russians will not go down quietly, and neither will Iran. Both of these nations have used the revenues generated by fossil fuels to build either more fossil-fuel capabilities or to upgrade their militaries. What they haven't done is build their nations with this windfall. This guarantees an economic downturn of likely a severe nature in the future.
"Drill here, drill now!" led George W. Bush to open offshore drilling closed by his father when prices spiked up over four dollars a gallon for gasoline, and the result was an almost immediate drop in oil prices as the oil market feared a new competitor coming online. This triggered a crisis in the Russian economy as oil revenues dropped off and the tax base shrank. It forced Russia to pull out of it's war with Georgia, as I chronicled at Pajamas Media. http://pajamasmedia.com/blog/drill-here-drill-now-helped-end-russia-georgia-war/
It is to be hoped that America opening new sources of gas and oil will do something similar to our good friends the Russians and Iranians. Russia and Iran have a strategic partnership, and it is with Russian assistance that Iran has been developing nuclear weapons and the systems to deliver them. They are truly part of an axis of evil; Russia helps Iran and Iran promotes terrorism throughout the world. Cut off their funds and all that mischief stops.
But it could drive a desperate gambit. Therein lies the danger.
Hat tip: CCNET
posted by Timothy Birdnow | 5:58 AM
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