Business InsiderEurasia Group President Ian Bremmer and co-author Kenneth Hersh write in a New York Times op-ed today that America’s domestic energy production renaissance will remake the world.
“While this is not a free lunch, it should not be feared,” they say. “The production process is complicated and expensive, and if the industry is not careful there can be risks to the environment. But the potential is staggering. Significant domestic job growth and economic expansion has begun.”
The impact will be felt in two forms: first, no longer will a handful of energy producers be able to control markets. That’s because other countries are discovering that they too possess large shale deposits (even if initial investment has been slow).
The other is that as America reduces its fossil fuel imports, it will not have as much interest in intervening in foreign markets.
As the pair write:
As America drives toward a new era of energy self-sufficiency, Washington will be less willing to risk lives and spends billions on ensuring the free flow of oil and gas through dangerous places. That’s especially important for the Middle East â€” a region where Ottomans, then Europeans, and lately Americans have, for better and for worse, helped keep the peace. The United States isn’t about to abandon the region entirely, not with the global economy still so dependent on the flow of commerce through the Strait of Hormuz and Israel’s security at risk. But it’s natural that as America becomes less reliant on the Middle East for energy, Washington’s willingness to accept risks and burdens there will diminish, or at least become harder to justify in a fiscally constrained era.
As others have pointed out, Bremmer and Hersh also note that it’s very possible China will step into the resulting void, which will create it’s own set of issues.