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These two articles last week caught my attention.  One is from the New York Times, “Vast Oil Reserve May Now Be Within Reach, and Battle Heats Up” and discusses the potential shale oil reserves in California.  The other article is from Spiegel, “Full Throttle Ahead: US Tips Global Power Scales with Fracking” and it extols the international opportunities that now exist for the United States because of Shale Energy. 

Taken together, the two articles paint an incredible economic and geopolitical opportunity for the United States.  The Times article states that: 

“Comprising two-thirds of the United States’ total estimated shale oil reserves and covering 1,750 square miles from Southern to Central California, the Monterey Shale could turn California into the nation’s top oil-producing state and yield the kind of riches that far smaller shale oil deposits have showered on North Dakota and Texas . . . Though production has been declining for years, California remains the country’s fourth-largest oil-producing state, after Texas, North Dakota and Alaska. So far, little of the crude is derived from the Monterey Shale, whose untapped deposits are estimated at 15.4 billion barrels, or more than four times the reserves of the Bakken Shale in North Dakota, according to the United States Energy Information Administration.” 

The Spiegel article notes that: 

“The gas revolution is changing the political balance of power all over the world. Americans and Russians have waged wars, and they have propped up or toppled regimes, over oil and gas. When the flows of energy change, the strategic and military calculations of the major powers do as well. 

It is still unclear who the winners and losers will be. The Chinese and the Argentines also have enormous shale gas reserves. Experts believe that Poland, France and Germany have significant resources, although no one knows exactly how significant. Outside the United States, extraction is still in its infancy. 

The outlines of a changed world order are already emerging in the simulations of geo-strategists. They show that the United States will benefit the most from the development of shale gas and oil resources. A study by Germany's foreign intelligence agency, the BND, concludes that Washington's discretionary power in foreign and security policy will increase substantially as a result of the country's new energy riches.” 

Some of the past articles that I have shared have been more pessimistic.  They note in particular the potential exponential decline rates in the wells.  That may be true (although exponential decline rates are the minority view), but today we have $3.00 natural gas and billions of dollars in new US investment.  We also have a developing international story of how our new energy source could remake our foreign policy.