America’s energy revolution has the potential to fundamentally alter the way we think about geopolitics, economics and energy policy. But this revolution is happening so quickly that many of us are still having trouble wrapping our heads around it all.Daniel Yergin’s short interview with the Wall Street Journal should help that discussion along, and it hits on some key points that we’ve made here at Via Meadia. In particular, America stands to gain from the vast quantities of new energy—both geopolitically, as dependence on foreign oil decreases, and economically, as energy production fuels new job growth:
Until a couple of years ago, people didn’t focus on the economic impact of domestic energy production. Over one million jobs have been created by the development of unconventional gas. It makes the U.S. more competitive. You can see how the growing recognition of the economic impact is changing the political discourse about energy in the U.S., including, very clearly, in the presidential campaign. You would not have had this kind of discussion about energy in 2008.[The new flow] changes the geopolitical perspective about energy. The U.S. is going to be relatively more self-sufficient and less dependent on foreign energy. We’re already independent in terms of coal and natural gas; greater reliance on regional and domestic supplies increases our sense of security.
Of particular interest are his comments about the role of China in the new energy world:
There was much heightened concern about energy security in China in the middle of the last decade; now there’s much more self-confidence in their ability to buy what they need, a bigger appreciation of a flexible global market. But China clearly intends to have a bigger presence on the world stage; it is participating in antipiracy efforts off the coast of Somalia.In some ways, China will become a partner—it will come to have a role in the security of the flow of energy. This can go on a very constructive, cooperative fashion, or it can go on in a fashion which creates greater risk. This is going to be one of the major focuses of the U.S.-China relationship.