How Fracking And Shale Boom Is Changing America’s Place In The World

  • Date: 08/02/14
  • Denver Nicks, TIME

New report sees America’s energy riches upending the geopolitical order

It wasn’t even five years ago that Iran reelected hardliner Mahmoud Ahmadinejad in a disputed presidential election, openly admitted it was building a uranium enrichment facility and brazenly test-fired missiles capable of hitting targets in Israel. Fast-forward to today: A more conciliatory president, Hassan Rouhani, is making historic overtures toward the West and negotiations are showing rare progress toward containing the country’s nuclear program, which has kept the region—and the world—on edge for years.

The difference, according to former Obama administration National Security Advisor Tom Donilon, can be summed up in one word: “fracking.” That’s hydraulic fracturing, the drilling method that’s helped fuel an unprecedented domestic energy boom in the United States.

“There’s a direct line between the U.S.-led sanctions effort to put pressure on Iran” and the flood of oil and gas coming out of the ground at home due to fracking technology, Donilon said Thursday night at an event announcing a new report from the Center for a New American Security, titled “Energy Rush: Shale Production and U.S. National Security.”

Before the North American energy boom—the largest-ever annual increase in domestic oil production took place in 2012—a harsh sanctions regime against Iran looked more like a suicide pact for the oil-import-dependent U.S. Instead, America’s sudden energy abundance dampened the blow of reduced oil exports to the global economy, making truly harsh sanctions on Iran possible.

“The pressure campaign,” Donilon said, “resulted in tremendous pressure in the Iranian economy: a reduction in the ability to sell oil, pressure on their currency, high inflation, high unemployment, the inability to do any real financing within the marketplace. And that led directly, I think, to the election of Rouhani last spring. And that led directly to the fact that we’re at the table now talking about the nuclear program.”

America’s improved bargaining position vis-à-vis Iran is just one example of how the 21st century geopolitical order has been upended by the energy revolution underway in the U.S., according to Elizabeth Rosenberg, who authored the report. The downward pressure on oil prices created by plentiful crude in North America gives the U.S. leverage it didn’t previously have in dealings with all major petroleum exporting states, including some that have been particularly irksome to the U.S. of late, like Venezuela and Russia.

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