Written By: Ishika Bhatia
The Unconventional Revolution covers a broad scope of unconventional oil resources. In “The New Map” by Daniel Yergin, we are introduced to a multitude of ideas describing how this revolution was able to impact the U.S. economy as well as geopolitical positions and foreign policy options.
The Shale Revolution was one of the most prominent parts of the Unconventional Revolution. The impacts of the Shale Revolution are very well recognized in a place like Houston because of its concentration in manufacturing. However, the Shale Revolution is not as recognized in terms of how it could impact jobs, factories, and manufacturing as a whole. The Shale Revolution is unrecognized mostly for how it could impact the position of the United States on a global scale. Talking on a domestic scale, however, the Shale Revolution has impacted jobs in the United States. There have been economic benefits such as cheaper gas for manufacturing and petrochemicals. On a global scale, the Shale Revolution has impacted the European gas market because buyers and sellers no longer need to commit to long term contracts.
Unfortunately, there are some possible long term consequences of the sanctions that are being placed due to the revolution. Usually, countries will find loopholes to sanctions and manufacture what they desire despite any possible restrictions. Sanctions today are a huge tool of U.S foreign policy because the U.S dollar is the leading currency. However, because of this, the U.S. dollar is said to be at risk because countries such as China are keen to create an alternative to the dollar.
The Shale Revolution has also affected international relations in terms of oil trade. This is part of the reason prices fell in 2014. Shale technology was responsible for excess growth of supply in the United States, but demand was decreasing. Saudi Arabia and Russia both refused to decrease the production amount which was the tipping point for prices collapsing. This, however, was resolved two years later when the countries met to create a solution for the situation which eventually led to OPEC.
It should be noted, however, that oil is not the only factor in this revolution. In fact, China’s climate policies are driven by the business development for exporting wind and solar equipment. China currently has half the wind and solar in the world and is planning on adding three new coal-fired plants in hopes of being a world leader. With the world quickly changing in terms of workspace environment and alternative energy sources, it is likely that the world demand for oil has already peaked or will peak within the next few years. It is predicted that the following years will bring a slow decline to the oil demand. This can be caused by things such as working from home becoming a norm, which decreases commute time and, therefore, decreases the demand for oil. The unconventional revolution is just an entryway into the developing world of unexplored methods of retrieving energy and is hopefully a pathway into economic success and international cooperation. Make sure to read “The New Map” by Daniel Yergin to learn more!
To watch the full and detailed video about this subject make sure to check out this link: Energy, Climate & The Clash of Nations
Make sure to check out the World Affairs Council Houston youtube page for more videos like this!