The shale boom has been a boon to the U.S. economy, providing an influx of new sources of domestic crude and a glut of natural gas, which has led to lower electricity bills for consumers and cheaper inputs for many manufacturers. But a closer read of the dramatic reversal in America’s energy fortunes over the past ten or so years reveals an added benefit of at least equal importance to this economic boost: what Harvard professor Joseph Nye calls America’s “geopolitical trump card.” He writes for the Wall Street Journal:
The shale revolution has a number of implications for American foreign policy. Shale-energy production boosts the economy and produces more jobs. Reducing imports helps the balance of payments. New tax revenues ease government budgets. Cheaper energy makes industry more competitive internationally, particularly energy-intensive industries like petrochemicals, aluminum, steel and others.There are also domestic political effects. One is psychological. For some time, many people at home and abroad have bought into the myth of American decline. Increasing dependence on energy imports was often cited as evidence. The shale revolution changes that dependence and demonstrates the combination of entrepreneurship, property rights and capital markets that are this country’s underlying strength. […]Other benefits of the shale revolution for American foreign policy include the diminishing ability of countries like Venezuela to purchase votes in the U.N. and regional organizations of small Caribbean states by shipments of oil, and, if the government will approve more exports of liquefied natural gas, the eventual reduction of Russia’s ability to coerce its neighbors by threats to cut off gas supplies. In short, there has been a tectonic shift in the geopolitics of energy, but it was not the Russia-China gas pipeline deal.
We recommend you read the whole thing. At a time when so many seem to fixate on what they interpret to be the America’s waning influence in the world, and when so few things seem to be going right for Obama’s foreign policy, the shale revolution can be held up as a real American success story. It required entrepreneurial drive, technological innovation, and a willingness to fail (though also, admittedly, a little bit of luck), and remains a uniquely American phenomenon.We’re not on track for energy independence—world energy markets don’t work that way, unless the U.S. chooses to go into full isolationist mode—but we are becoming more energy secure by the day. That means we have greater flexibility when assessing our strategic options abroad, and on top of that, a healthier U.S. economy and all the foreign clout that brings.