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- W152455914 abstract "The sleepy agricultural backwaters of North Dakota have been transformed into oil boomtowns. In Pennsylvania, the Marcellus Shale formation is producing 13 billion cubic feet of natural gas per day, which is more than Saudi Arabia produces. With the advanced technologies of horizontal drilling and hydraulic fracturing, developers are extracting gas locked in rock formations a mile below the surface of the earth. BP predicts that the United States will become a net exporter of gas by 2018 and the International Energy Agency (IEA) predicts that by 2015, the United States will be the largest global oil producer due to its unparalleled technological capacity and its large shale formations that can support tenfold increases in production. These dramatic predictions, if realized, will impact the relations of the world's major energy market players. First, the decreased global importance of Middle Eastern oil has the potential to decrease regional conflict and US involvement in the Middle East. Currently, the United States imports 12 percent of its oil from the Persian Gulf, but the TEA predicts this will fall to 3 percent by 2035. Oil is a strategic resource that has historically had a large impact on international security and has traditionally been a source of conflict. When a country imports a large fraction of its oil supply, it is left vulnerable to regional wars and hostile states that can cause economic damage and military weakness for the importing nation. The state has the incentive to intervene to protect its regional interests and prevent a hostile state from gaining a significant share of the global oil supply. This phenomenon has been seen historically and in the present day. For example, in the Gulf War in 1991, the United States intervened to expel Iraqi forces from Kuwait and prevent them from gaining control of the Saudi oil supply. At that time, the United States imported nearly 30 percent of its oil supply from the Persian Gulf, leaving it extremely vulnerable to regional disruptions and with a large incentive to intervene militarily. However, with Persian Gulf imports at only 3 percent of totals, the United States would be much less exposed to Middle Eastern conflict. Compared to five years ago, the United States has become less vulnerable to the effects of Iran closing the Strait of Hormuz, through which 20 percent of global oil production flows, in response to US and European sanctions. The United States could potentially choose to reduce its naval presence in the Persian Gulf, and let China, a country that imports 60 percent of its oil from the Middle East, police the region. Regardless of what the United States chooses to do, decreased global dependence on Middle Eastern oil will lead to more flexibility in foreign policy and decrease the dangerous consequences of unrest in the Persian Gulf. The shale revolution's boon to the United States' negotiating position in the Middle East has evinced this flexibility. In 2010, the US Congress passed the Comprehensive Iran Sanctions, Accountability, and Divestment Act, further strengthening long term economic sanctions placed on Iran in 1996. The act targeted actors engaging in business with Iran's petroleum sector, with the hope that the sanctions on oil exports would cripple Iran's oil-dependent economy, thereby forcing Iran to the table in nuclear negotiations. When the stricter sanctions went into effect, there were fears that such a large reduction in the global oil supply would drive up oil prices to unsustainably high levels, resulting in a failure of the sanctions. …" @default.
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- W152455914 date "2014-03-22" @default.
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- W152455914 title "The Us Shale Boom: Geopolitical Ramifications of a Changing Energy Market" @default.
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