US should flex geopolitical muscles from oil renaissance
March 23, 2016
The US should be less hesitant to use its expanded geopolitical influence after changing from a nation relying increasingly on oil and gas imports to one poised to be a major exporter, Manhattan Institute Senior Fellow Mark P. Mills said.
“There has never been that much new oil produced that fast in history,” he said in keynote remarks at a Mar. 22 Hudson Institute conference examining geopolitical implications of the US shale oil and gas revolution. “It completely shocked global markets. The US went from being a supplicant to a possibly major global influence.
“The issue of energy independence, which had seemed so important, suddenly was backward from what’s going on,” Mills said. “We have an opportunity for geopolitical influence that we haven’t exercised. Perhaps the next administration will explore forming partnerships with our allies to facilitate more oil and gas exports.”
Mills questioned the idea that crude prices plunging from $100/bbl to $30/bbl in 18 months will have long-term impacts on US oil production as projects were canceled and workers were laid off. The independent producers who figured so prominently in US shale oil and gas production growth have made their operations more efficient and economic, Mills said.
This year, Mills said, will be “a defining” one for many producers “because their hedges are coming off and they’ll have to pay real prices.” He noted that more importantly “there are billions of dollars in capital lined up to invest in distressed companies and aggregate them into stronger competitors.”
Read entire article at Oil and Gas Journal.
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