In his recent State of the Union address, President Obama declared that “After years of talking about it, we are finally poised to control our own energy future.” The President was, in part, referring to “fracking” (or, hydraulic fracturing) – the process by which pressurised fluid (a mixture of water, sand and chemicals) is pumped into the earth, fracturing rock layers and releasing petroleum and natural gas for extraction.
Fracking is nothing new – the first experimental use of hydraulic fracturing was in 1947, and the first commercially successful applications in 1949. But only recently has it become an economically viable alternate energy source of scale. On the supply side techniques have been refined, whilst the thirst of an ever developing world continues to press demand for more traditional sources of energy.
The implications are considerable. From a low of 5 million barrels per day in 2008, US output has shot up in a hyperbolic curve to 7 million bpd. The last time output was that high was back in 1992 — 20 years ago. What’s more, U.S. imports of petroleum have fallen to the lowest level since 1999 (below 10 million bpd today versus 14 million bpd in 2005). Some believe that the US may become entirely energy independent (indeed, a net exporter of energy) if not by the end of the current decade then the next.
That is not say that fracking does not have both its critics (not least here in France, where it has been banned) and its sceptics (see, for example, the on-going discussion surrounding the viability of California’s much heralded Monterey shale).
But were fracking to fulfil expectations, it has the potential to act as a profoundly transformative influence.
The energy industry historically has been, and arguably remains, the single most influential sector in driving geopolitics. Energy security has been at the forefront of US foreign policy for many decades, energy independence, the holy grail of all policy.
It may be that the White House sees, in the prospect of energy independence, a means of redeploying a portion of influence from those regions from which energy has traditionally been sourced and “pivoting” towards Asia-Pac (assuming, of course, that energy policy is indeed the “chicken” to foreign policy’s “egg”).
This rationalisation of foreign policy has its own economic imperatives. The current economic crisis has brought into sharp focus the sustainability of public debts. This in turn has tempted many to conclude that policing the globe is simply too expensive for any one nation, no matter how formidable.
Nowhere is the question of fiscal balance more fervently debated than in Europe. But leaving to one side the transition from austerity to pro-growth (and the very real hardships with which “main street” is still grappling), one of the crisis’s enduring legacies seems likely to be Angela Merkel’s “more Europe”.
Of course the US will likely retain its considerable influence in North Africa and the Middle East for some time to come (particularly in helping to shape solutions to the current and pending challenges which they each face). But, in pivoting to the west, this President may be more willing to entertain European consolidation and to encourage Europe to assume a greater share of responsibility in its own “back yard” – to fill a partial vacuum fuelled by fracking.
