Greater US Energy Independence: A Game Changer?

The structural changes in the world energy market are bound to have geopolitical implications in coming years.  US energy independence and increasing global supplies of gas from unconventional sources will also complicate the shift towards renewable energy.

From Bloomberg

U.S. crude-oil output in the fourth quarter this year will exceed imports for the first time since 1995, as fields in North Dakota and Texas put the nation on track to surpass a production record set a quarter-century ago, the U.S. Energy Information Administration said last month. Domestic gas output is forecast by Bloomberg New Energy Finance to increase 25 percent by 2020.  

The U.S. will surpass Saudi Arabia in oil production in the next decade, making the world’s biggest user almost self-reliant, the International Energy Agency said last year. ...  

The boom in oil and gas production has helped the U.S. cut its reliance on imported fuel. The U.S. produced 84 percent of its own energy in 2012, the most since 1991, EIA data show. The measure of self-sufficiency rose to 88 percent in December, the highest since February 1987.

Projections about peak oil, as I have long thought, were price dependent, meaning that as soon as the increased price of oil made unconventional oil (or 'tight' oil) viable. At under $20a barrel it was not viable to attempt to extract oil from oil sands or from shale, but as prices increased all of these sources entered into the potential oil supply.

For a history of oil prices see here.

It is not only oil that matters, but other sources of energy, particularly gas, that have transformed energy markets.  Given the massive increase in supply in coming years and the potential for increased US exports, gas prices will probably fall as well.

One doesn't need to study international relations to understand that greater US energy independence could have considerable ramifications for US foreign policy and for geo-politics. If it were to be sustained over the longer-term, it will probably reinforce the US strategic repositioning towards Asia and lessen the significance of the Middle East.