America's energy revolution transforms international relations
North America's energy revolution is remaking all aspects of the global economy and international relations in what has turned out to be the most profound shift in the second decade of the 21st century.
Policymakers and climate scientists prefer to talk about the transformational potential of clean technologies like wind, solar and electric vehicles.
But in reality the biggest shifts in economic relations and the balance of power at present stem from changes in the production of decidedly old-fashioned and polluting fossil fuels such as oil and gas.
Hydraulic fracturing, coupled with tougher fuel-economy standards and increased use of biofuels, has reversed the growing dependence of the United States on energy imports in less than 10 years.
If fracking has not yet made the United States "energy independent", it has certainly created a crucial source of competitive advantage and given policymakers much more room to manoeuvre.
By the start of the century, the cost of importing energy was one of the largest burdens on the U.S. trade balance, and threatening to worsen in the medium term.
Crude oil and refined petroleum products such as gasoline accounted for most of the imported energy, but there was growing concern that the country would also become a big net importer of natural gas within a few years.
In 2008, the United States ran a net energy trade deficit with the rest of the world amounting to $411 billion, 2.8 percent of GDP.
Crude petroleum and refined products accounted for around one-third of the record trade deficits which the United States ran between 2004 and 2008.
But 2008 proved to be the high-water mark for the net cost of energy imports.
There is no mystery about the cause of the U.S. energy revolution.
The quadrupling of oil prices between 2000 and 2008 was directly responsible for the biofuel-blending mandates and fuel efficiency standards contained in the 2005 Energy Policy Act and 2007 Energy Independence Security Act passed by the U.S. Congress.
It also indirectly supported the swift rollout of fracking technology, first in natural gas and from 2008 onwards in oil, as well.
But the consequences of the energy revolution are only now being felt fully.
For years, policymakers and commentators have played down the revolution's impact, or even denied there is a revolution at all, because it clashes with climate policies and threatens to re-arrange international relations in ways that are uncomfortable to many of those concerned.
- Fall tests for nematodes help keep crops healthy
- National Agricultural Genotyping Center announces partnership
- Surging soy, U.S. dollar quotes highlight Friday futures trading
- EU’s leading plant scientists call for action to defend research
- Digi-Star introduces WeighLog hydraulic weighing system
- Surging U.S. dollar values weighed on ag markets Friday morning