Bill Clinton unseated President George H. W. Bush in 1992 using the now famous theme of “The Economy Stupid.” Clinton’s manager, James Carville, understood that Americans were struggling and a razor focus on economic issues would resonate and carry the election. Today, Americans are still struggling and shale could provide the path to greater prosperity.
Last week, OPEC concluded its last meeting of 2015 with a decision to not cut production. As The Wall Street Journal reported, Shale is the new reality:
The decision helped cement the perception that the U.S. had become the world’s new swing producer, replacing OPEC for influence. Using the hydraulic fracturing technique to unlock oil from shale-rock formations, American drillers have higher costs than most OPEC members but are flexible enough to restart operations quickly when prices rise, making OPEC production cuts less meaningful. “There is nothing at the moment that could be done from OPEC to correct the situation,” said an OPEC delegate from a Persian Gulf Country. “Shale is the new reality.”
Many U.S. leaders appear unable to accept what OPEC clearly understands: shale is here to stay, and it is an economic and strategic game changer. Shale (oil and natural gas) removes any dependence on hostile countries in the Middle East and provides a 100-year supply of economically priced energy. If U.S. leadership were to embrace what OPEC already knows, we could see a host of new initiatives from Washington and the States. Here are just a few:
- Full support for the export of Liquefied Natural Gas including expedited approval of all necessary Federal permits,
- State and Federal support for gas fired electricity generation,
- Repeal Federal laws banning the export of US oil,
- State and Federal support for all necessary infrastructure to move oil and natural gas from production basins to processing and export facilities, and
- Full support from State and Federal government for plants and facilities that use natural gas as feedstock.
We still have almost a year in this presidential election cycle. There is abundant time for a candidate to embrace the shale reality into a platform. If history is instructive, that candidate could ride that platform to victory in November 2016. It’s the shale… right?