U.S. independent oil and natural gas producers have given the country’s politicians a winning hand to take to the geopolitics poker table, and they don’t know what to do with it, NGP Energy Capital Management CEO Kenneth Hersh told a Houston audience Wednesday.

The shale revolution has taken the United States from a virtual energy “have not” to a nation with an effectively limitless supply of oil and natural gas. It has “completely changed” global politics and economics.

“Because the world was short [of energy], we had to kind of be nice,” Hersh said at the NAPE Summit Business Conference. “The balance of power was in favor of the producer. The consumers had a weak hand. The consumers themselves had to look the other way if they didn’t like what they saw, i.e., with Saudi Arabia and other producers. We had to supply a defense umbrella to the entire Persian Gulf, which was a subsidy from the U.S. taxpayer…because we were the largest consumer.”

Now, though, because of the efforts of independent oil and gas producers — not the majors — the situation has been reversed and there is surplus. “If you have no worries about shortages, you have a lot of degrees of freedom if you’re on the buy side,” Hersh said.

However, instead of negotiating from a position of freedom and strength — backed up by all that energy commodity in the ground — U.S. politicians still adhere to the old narrative — that the country is running out of energy and must go hat-in-hand to foreign nations that have abundant supply, he said. An example is the negotiations leading up to the recent lifting of trade sanctions on Iran.

Hersh said that not only did the United States “cut a weak deal,” it broke the basic tenets of negotiation. Secretary of State John Kerry was not dealing directly with his counterpart in Iran, Hersh said. The United States allowed a deadline for an agreement to slip more than once, and the U.S. failed to build leverage at the negotiating table.

“What we should have said to Iran was, ‘Guess what. You want your $160 billion and you want to produce a million b/d, you sign this deal. Or else we’ll tell the people in North Dakota that we will start exporting oil tomorrow…’ At the time, we could have said to the Iranians, ‘Keep your damn oil in the ground for 100 years; we’ll dial up our production 1 million b/d and we’ll put it on the world market. Now sign this.’

“Today, the U.S. oil and gas industry has provided our policymakers pocket aces, and they don’t even know they’re at the poker table.”

Elsewhere in the world, energy-consuming countries are starting to flex their muscle, having seen that supply is available. Hersh said examples of this are the European Union imposing restrictions on how much natural gas it takes from Russia’s Gazprom. This would not have happened when Gazprom was the monopoly provider to Western Europe. Ukraine struck a sweetheart deal for gas from Russia while the two were at war. And “Japan is using the threat, just the threat, of U.S. LNG exports, which haven’t really materially started yet, to dramatically alter contracts,” Hersh said.

Not that long ago, China was interested in buying up energy reserves around the world, including in the United States and Canada. “Now all of a sudden in a supply-rich world, China says ‘wait a minute, as long as we can get into all the stores, why do we need to stock the inventory. Let the stores stock the inventory. All we need to do is make sure the roads [for trade] are all open,'” Hersh said.

Meanwhile, legacy producing countries are trying to learn new tricks to stay relevant on the global stage.

Nigeria is having to go out and find markets for its production, something it didn’t have to do before. Qatar is working to build a hedge for a day when it might not have such a strong energy arm, Hersh said.

Qatar is “…doing things politically by providing arms in Egypt. They’re politically providing arms in the Syrian conflict. Their sovereign wealth fund has purchased really interesting brands,” he said. Hersh cited Qatar Investment Authority holdings in Harrods department store in London, Volkswagen-Porsche, Miramax Films and others. “They’re doing things to build relevance as a way of hedge.” Qatar also has established outposts of U.S.-based universities complete with U.S. faculty, he said.

Abu Dhabi has a Cleveland Clinic branch and Formula 1 racing now. “They have tennis. They’re trying to [build relevance] through culture. They also have a university,” Hersh said. “Dubai is doing it through a financial center, tax incentives and a world class airport to try to become relevant.”

Until recently, these countries were remaking themselves with the benefit of substantial revenues from oil and natural gas. “Now all of a sudden they don’t have as much in their checking accounts as they used to,” Hersh said. “So how sustainable is their hedge? We’ll find out.”

Hersh is a senior manager with The Carlyle Group and a director of Memorial Resources Development Corp., Memorial Production Partners and other private companies. He is on the Dean’s Council of the Harvard Kennedy School and on the Advisory Council of The Graduate School of Business at Stanford University. He also is a member of the Council on Foreign Relations and of the World Economic Forum and has been a featured speaker at its annual meeting in Davos, Switzerland. NGP is based in Irving, TX.