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Oil and gas development is key to US future. Don't ban it. Regulate it.

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In 2012, the US National Intelligence Council issued a report that found “[w]ith shale gas, the US will have sufficient natural gas to meet domestic needs and generate potential global exports for decades to come.” The council characterizes this as a “tectonic shift.” Citigroup also describes the prospects for US energy independence as “real.” These predictions are based on the impact of modern fracking technology on the growth of domestic energy production.

The US energy boom also benefits American foreign policy in three key ways that bolster the need to responsibly pursue further oil and gas development.

First, by no longer being tied to petroleum imports from the Middle East, the US can reassess its long-held “oil-for-security deals that we’ve had with [Middle Eastern governments] for over 40 years,” according to James Jones, the former National Security Agency adviser to President Obama. A major US military presence in the Middle East has not always been – and is unlikely to be – considered a positive aspect of US foreign policy.

Second, for American allies, increased US production will considerably reduce the “oil weapon” threat, and in Europe, the “natural gas weapon” threat. While Americans see the oil threat in the more abstract context of US energy security, their allies in the European Union and Japan experience energy supply shortages in the reality of their day-to-day lives.

In terms of oil, greater US production and supply in the Strategic Petroleum Reserve could help moderate price spikes that in the past might have been associated with supply contractions (e.g., any decision by the Organization of the Petroleum Exporting Countries to restrict supply to increase price, or less production in Nigeria from petroleum theft).

Concerning natural gas, a look at Europe illustrates the threat. Because of the Continent’s undeveloped petroleum resources, Gazprom, the Russian gas giant, has been able to bully consuming nations by constricting the supply of natural gas for heating. New gas supplies will blunt the effect of that tactic. Moreover, if exported US gas can provide cheaper and cleaner power for Europe and help resuscitate a moribund EU economy, all the better. 

Third, with increased internal energy security the US could re-think what is a reasonable military presence around the world. American firepower currently keeps the shipping lanes open for oil that ultimately makes its way to China and Europe.

If the alternative supply came from North America, and the need to keep the lanes safe diminished, the resultant savings could be reinvested in education, infrastructure, and lowering the national debt, and for many other needs here at home.

Speaking recently about the potential of US gas exports, David Goldwyn, former US State Department special envoy for energy, put it this way: “Lower prices, lower emissions [related to fuel switching from coal to gas for electricity generation], greater diversification, more competitive pricing. It’s a diplomatic royal flush.”

America, if it acts carefully and strategically, may well harvest a “foreign-policy dividend” related to increasing domestic production of oil and gas. This dividend should not be overlooked in the continuing conversation about the future of fracking in the US.

Don Smith, who was a staff member for former Kansas Gov. John Carlin (D), directs the University of Denver Sturm College of Law’s environmental & natural resources program. Rebecca Watson, who served as assistant secretary of the Interior for Land and Minerals Management in the George W. Bush administration, practices land-access and energy law as a shareholder with Welborn Sullivan Meck & Tooley, P.C., in Denver.

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