Even the people at IHS, Inc. (one of the world’s preeminent global consulting and forecasting firms) missed perhaps the most important impact the fracking boom is likely to have: it just might dampen the enthusiasm for the empire builders in Washington to continue to intervene in countries where they have no business, justifying it in the name of our “security interests.”
Fracking’s impact can scarcely be missed: North Dakota’s unemployment rate is (and has been for some time) the lowest in the country. Texas oil shale deposits (larger than North Dakota’s) are setting in place a boom there that could outpace North Dakota’s. It’s reviving the moribund petrochemical industry, which just a few years ago was shutting down plants and laying off people.
It’s saving households considerable amounts of money, estimated to be at least $100 a month last year, and estimated to increase to more than $300 a month in a few years just for household necessities like energy and goods. It’s increasing employment in the energy sector, which is leaking out into the general economy. It is increasing tax revenues for starving states. It’s changing the competitive structure of the world economy as American manufacturers are becoming more competitive. It has already ended the “off-shoring” of jobs to China and elsewhere and the “re-shoring” back to America has begun in earnest.
Railroads like BNSF and trucking companies like Waste Management and municipalities like LA Metro are “going LNG” (liquefied natural gas) because of potential cost savings of – ready? – 50% over the cost of diesel fuel. And this says nothing about how trucks are running more quietly and emitting far fewer of those “noxious, global-warming enhancing” fumes, bringing America into line with the limits established by the Kyoto Protocol even though the US isn’t even a signatory on that fraud.
It’s negating concerns about the EPA’s attack on coal-fired energy plants as new ones are increasingly likely to be fired instead by LNG. It’s reducing America’s dependence on foreign oil currently being provided by our enemies in Saudi Arabia and Russia. It’s putting a crimp on Russia’s natural gas monopoly. It’s generating huge investment capital inflows into the energy field, estimated to approach a third of a trillion dollars just in the next ten years. The list goes on and on.
Here’s Daniel Yergin, author of the insightful 800-page book “The Prize: The Epic Quest for Oil, Money and Power” and now Vice President for IHS:
The unconventional oil and gas revolution is not only an energy story. It is also a very big economic story….
In addition to significant job and economic impacts … the growth of long-term energy supplies is benefiting households and helping to revitalize U.S. manufacturing….
Another bright light in the heavens of economic forecasting is Harold Sirkin, senior partner of the Boston Consulting Group, who has been making the persuasive case for a couple of years now that “off-shoring” of jobs is over and “re-shoring” of jobs back to the US is now well under way. He is estimating that by the end of this decade (a scant seven years from now) 5 million jobs will return to the US just in the manufacturing sector alone. The ripple effect will be far greater than that.
But all of this misses perhaps the single most important impact that the fracking boom is likely to have: US foreign policy. To date, as Yergin took pains to point out in his book, foreign policy here has largely been based on “national security interests” (read: oil, access to oil, protecting our interests in oil, etc.). This has justified all manner of mischief, i.e., Syria, Egypt are just current examples.
Even the folks at NATO are getting nervous. In a report prepared for an upcoming meeting of NATO’s Parliamentary Assembly, Danish author Jeppe Kofod nervously admitted:
[America’s energy resurgence] could have implications for NATO over the longer term. The alliance is premised on the notion of shared security interests … a significant divergence in energy security perspectives could begin to erode this foundation. (my emphasis)
The implications are remarkable: the key underlying justification for foreign adventures involving doing business with our enemies and supporting “morally questionable strongmen or unpredictable rebels” as noted by Rob Cox at Fox News, is being taken away, thanks to fracking.
Wouldn’t it be remarkable if the development of fracking technology not only works to restore America’s pre-eminent position in the world, but would also call into question Washington’s determination to build a world empire?
Would it be too much of a stretch to look back on this time a generation from now and see that fracking allowed America to be restored to the vision of President George Washington, who said in his farewell speech:
The great rule of conduct for us, in regard to foreign nations, is, in extending our commercial relations, to have with them as little political connection as possible.
So far as we have already formed arrangements, let them be fulfilled with perfect good faith.
Here let us stop.
Yahoo.com: Shale gas, oil reshape world energy landscape
The Daily Caller: The EPA’s death blow to the coal industry
Reuters: Fracking may change U.S. foreign policy for good
GlobalPost.com: Could fracking make the Persian Gulf irrelevant?
Light from the Right: Warren Buffett’s Railroad is Testing Natural Gas to Drive its Locomotives
IHS, Inc.: U.S. Unconventional Oil and Gas Revolution to Increase Disposable Income by More than $2,700 per Household and Boost U.S. Trade Position by More than $164 billion in 2020, New IHS Study Says
IHS, Inc.: America’s New Energy Future
The Kyoto Protocol
George Washington’s Farewell Speech
Boston Consulting Group’s Press Release: 8/20/13 Rising Exports—Plus Reshoring—Are Projected to Create 2.5 Million to 5 Million U.S. Jobs by Decade's End
Daniel Yergin’s “The Prize: The Epic Quest for Oil, Money and Power”