The ability to convert shale and tight sands formations into affordable natural gas and oil is "the game changer" for the United States "because it changes the most important game in the world, the game of war," global intelligence expert George Friedman said last Wednesday.
"Other issues are important, but for me, this is the transformative moment that we're in," he said in a keynote speech at the Colorado Oil & Gas Association's Rocky Mountain Energy Epicenter conference in Denver.
The geopolitical expert is CEO of Stratfor, a company he founded in 1996 that focuses on global intelligence. Friedman authored the New York Times bestsellers, "The Next 100 Years: A Forecast for the 21st Century" and "The Next Decade."
"The rule in geopolitics is when you are talking about energy, you are talking about war," he told the audience. "That's tragic and unfortunate, but it's a reality. It's the foundation for national security. No nation can function without energy. When it's held by foreign powers, a nation is insecure, which leads to friction, which leads frequently to catastrophe.
"This is the equation of our time, and it's certainly the equation of the last century. And it's one that might be changed by the development of unconventional energy resources around the world.
Friedman explained that "very few people" understood that World War II ultimately was about a quest for oil supplies. Nearly all of the wars that the United States -- or any country -- has been involved in over the past 100 years has centered on maintaining or securing energy, including invading Iraq, he said.
However, "the United States does not simply have a foreign policy that focuses on energy," he noted. "It's more subtle...But it would be a mistake to think that U.S. foreign policy isn't shaped by the need for energy, the need to guarantee energy for global systems. Therefore, it causes us to do things we wouldn't do otherwise."
For instance, Syria, he said, "is not a country that has energy, it's not close to a country with energy, but it's bound up in energy and supported by the Iranian government." It's "essential for the United States that the current Assad regime not survive," he said of Syrian President Bashar al-Assad. Undermining Assad would "blunt" Iran's drive to the Mediterranean Sea, which if allowed would threaten the northern frontier of Saudi Arabia, a U.S. (and oil-rich) ally.
Another example is Europe's dependence on Russia for natural gas. "Every European nation basically depends on Russia for natural gas, and [every country in Europe] has to calculate its relationship to the United States based on that dependence...
"This reality is reshaping the U.S.-European relationship. In the midst of the Euro crisis, the Europeans are not looking toward the United States as part of the solution, but they are trying to make certain that they don't alienate the Russians because they can't afford to."
Energy dependence "threatens not only the security of the United States but its foreign policy," Friedman said. "Absent this dependence, the United States would be able to make foreign policy decisions that are not as reactive as they are...Such as, wish the Syrians well, but not concern ourselves with it. Now, that's not an option...Should the flow of [world] oil break down, the result would be catastrophic not just to the United States but to the world."
Energy dependence, Friedman told the audience, "is a tragedy. It forces all countries to behave in ways that makes them more paranoid, more suspicious, more aggressive than might be the case otherwise. Countries like people operate on a worst-case basis. We hope for the best and plan for the worst."
Friedman said his argument is this: the last century's dependence on energy led to war. And in spite of this, there has been a constant increase in the demand for energy. "Therefore, the question of reducing energy dependence becomes a matter of war and peace, not simply a question of a desirable alternative formula. It's a question of reducing the friction of the international system that comes out of the paranoia of not having a source of energy and having sources of energy."
Unconventional resources in North America -- and the world -- may change the paradigm, said Friedman.
"We are entering a period in which what seemed impossible 10 years ago and probable today is actually quite conceivable," he said. "New technology has allowed us to access various forms of energy in North America...If that were to happen, it would create a set of options in foreign policy for the United States that would transform American life more fundamentally than anything else.
"A world in which a crisis in the Strait of Hormuz...a crisis in an oil-producing export country that would not cause my children to be deployed is a very desirable world for me, and probably many of you," said Friedman, who has two children who are in the U.S. Armed Forces. "Right now the decision on when to get engaged is in the hands of others and not in our own, necessarily."
Successful production of unconventional resources outside of North America could transform foreign policies everywhere, including in Europe with Russia regarding natural gas, he said.
"In shale, in technologies, I'm interested in the money to be made, but I'm more interested in the decline of war," he said. "I would argue that work [the energy industry] is engaged in has more effect on the future of American society and the kind of life we live, which has been filled with war -- 17% of the 20th century -- and it can change the world dramatically for the better."
The ability to export "large amounts of any fuel" would give the United States a "tremendous piece of power, in the same way the Russians have with natural gas pipelines in Europe," said Friedman. "And if we can get new technology to markets we have tremendous opportunities. There are technology limits, there are political limits. There's no coherent understanding in Washington and other places of what this could mean. They see this exporting as 'useful but noncritical.' I see it as a game changer..."
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