F. William Engdahl -- Is Russia Right About US Shale Energy?

1. Is Russia Right About US Shale Energy?

By F. William Engdahl

6 November 2019

Image credits: U.S. Geological Survey Department of the Interior/USGS - This work is in the public domain in the United States because it is a work prepared by an officer or employee of the United States Government as part of that person’s official duties under the terms of Title 17, Chapter 1, Section 105 of the US Codehttps://bit.ly/2JVta16

In recent remarks to a Pennsylvania shale oil producers’ convention, US President Donald Trump, noting the spectacular growth in shale gas as well as shale oil over the past decade, remarked that unconventional shale energy had made “America the greatest energy superpower in the history of the world.” On first look the achievement has indeed been impressive. Since 2011 the USA surpassed Russia to become the world’s largest producer of natural gas. By 2018 USA had passed Russia and Saudi Arabia to become the world leading oil producer. It is all because of US unconventional shale oil and gas. But the success may be short-lived .

The rise of shale energy and the favorable geological conditions in West Texas, North Dakota and elsewhere have given the US a clear geopolitical lever in world politics, not only in the Middle East or Venezuela policies. Also in the EU, where Russian gas remains the major supplier. Can the US continue to base policy on its leading role in gas and oil, or is this merely a blip due to end as suddenly as it appeared?

Just as a triumphant Trump was speaking in Pittsburg to the shale industry, Russian Energy Minister Novak pointed to recent slowing of shale oil output growth in key areas of the USA: “In the near future, if forecasts turn out correct, we will see a plateau in production.” He pointed to the significant reduction in shale oil drilling in recent months and predictions by Wall Street of a significant slowing of oil increases from shale in 2020. Prospects for US shale gas are far from positive as well, despite a current supply glut domestically. The LNG gas export terminal infrastructure, while it is increasing, is far from adequate to make the US a major supplier to the EU in competition to Russian gas. And money from Wall Street is drying up as well.

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