How the US’ rise as an energy exporter puts it on a dangerous path with China, and the environment

Energy drives global progress. It determines geopolitics, and a major shift has been under way in crude oil and natural gas drilling and production that is reverberating through energy markets and affecting policies around the world: the United States is turning from a major energy importer to a major exporter.

US crude oil production is at an all-time high and will continue to grow. The rise of a new supplier with significant capacity affects the Middle East and Russia, traditional major exporters, as well as China, much of Asia and Europe – major importers.

America’s energy fortune changed because of the maturation of hydraulic fracturing, or “fracking” – a crude oil and natural gas extraction technology enabling the country’s rapid surge in production. The US is already the biggest producer of natural gas in the world, and is projected to become the third-largest exporter in liquefied natural gas by 2020.

The US’ meteoric energy rise is causing major disruptions in prices. A decade ago, oil prices were close to a high of US$150 per barrel. Exporting countries were doing very well and importing countries had to cough up. Prices have more than halved since then.