Reflection on the implications that unconventional resources have for the US

The rise of these resources have brought new opportunities to the market. In this post the interest is focused in how the situation is presented for the US.

One way to measure whether the rise of unconventional resources can be translated into tangible effects is by observing the postures of the US government in that regard and which political actions have been taken. The Obama administration has recognized the benefit of the application of innovation in technology to extract the unconventional resources[i] to the economy, their national, and foreign and security strategies.

Now, any possible effects that may have occurred can be distinguished in the following manner: national and international. The national implications of unconventional energy resources are more concentrated in the economic growth and transformation of the national legislation[ii]. The international implications comprehend the effects of the reformulation of the political relationships due to the transformation of the national landscape, in terms of foreign relations and trade.

The transformation of the national landscape has been characteristic of a gradual evolution. The evolution has been a result of the national concern of the development of the unconventional energy industry and the political action that has accompanied the development.

One of the first major signs can be seen in the establishment of an ‘Interagency Working Group to Support Safe and Responsible Development of Unconventional Domestic Natural Gas Resources (Working Group)[iii], which basically is recognized as a partnership on Unconventional Natural Gas and Oil Research[iv]. This has permitted for a supervised development of unconventional energy sector, with the coordination and cooperation between private-public parties interested, with the political and economic support of the central administration funding different projects[v].

The national energy transformation is paving the way for a reconsideration of the international political relationships. To begin with, the US government has established new institutional energy alliances through different platforms of cooperation with other international actors[vi] in order to exchange best-practices and experiences with current and new allies.

The US Department of Energy (DOE) established the “Shale Gas Resource Initiative”, which has been designed as an official tool to increase the energy ties with other international actors through a multilevel cooperation which also involves the private sector[vii]. This initiative already includes a bilateral cooperation between the US and China.

This new initiative it is one example of state-level cooperation on what has been denominated as “Exchange and Cooperation in Unconventional Oil and Gas Exploration and Development” in which state officials of both parties are cooperating in order to assure a better implementation of unconventional resources. The national provision of unconventional resources is a sign that confirms the US is taking advantage of the unconventional energy for the national and foreign interests.

So far, there is already public acknowledgement of the context of the current energy market which favors the reconsideration of the wording of the restriction of crude oil and studies the options that may be the most beneficial to the industry and the political-diplomatic relationships.

The US Senate and Congress are already working on it[viii]. There has been some administrative and congressional activity with the intention of introducing some modifications in the export policy of energy goods[ix]. The US Congress has been working on drafting texts to facilitate the approval of the export of Liquefied Natural Gas (LNG) and crude oil. Even some officials are expressing their public support for a change in the exports policy[x].

The US Office of Fossil Energy has already established the regulations and procedures that are set to be followed in order to get a license to export LNG. Finally, the US EIA has published a list of the existing long-term applications to obtain the permission to export domestically produced LNG[xi] and has even been approving applications to allow the export of LNG[xii].

Dear reader see you in my next post.

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References

[i] The White House 2013. “Remarks by Tom Donilon, National Security Advisor to the President At the Launch of Columbia University’s Center on Global Energy Policy”, Office of the Press Secretary. Available from: <https://www.whitehouse.gov/the-press-office/2013/04/24/remarks-tom-donilon-national-security-advisor-president-launch-columbia-&gt;. [September 2015];  The White House 2013. “Remarks by President Obama in Address to the United Nations General Assembly”. Office of the Press Secretary. Available from: <https://www.whitehouse.gov/the-press-office/2013/09/24/remarks-president-obama-address-united-nations-general-assembly&gt;. [September 2015].

[ii] Andrews, Anthony et al. 2009, “Unconventional Gas Shales: Development, Technology, and Policy Issues”. Congressional Research Service (CRS) Report 7-5700, R40894. Available from: <https://www.fas.org/sgp/crs/misc/R40894.pdf&gt;. [September 2015].

[iii] The White House, 2012. “Executive Order — Supporting Safe and Responsible Development of Unconventional Domestic Natural Gas Resources”, Office of the Press Secretary. April 13, 2012. Available from: <https://www.whitehouse.gov/the-press-office/2012/04/13/executive-order-supporting-safe-and-responsible-development-unconvention&gt;. [September 2015].

[iv] The United States Department of Energy, 2012. “Obama Administration Announces New Partnership on Unconventional Natural Gas and Oil Research”. Available from: <http://energy.gov/articles/obama-administration-announces-new-partnership-unconventional-natural-gas-and-oil-research&gt;. [September 2015].

[v] United States Department of Energy. “Projects Selected to Boost Unconventional Oil and Gas Resources”. Available from: <http://www.energy.gov/fe/articles/projects-selected-boost-unconventional-oil-and-gas-resources&gt;. [September 2015].

[vi] United States Department of Energy. “International Cooperation”. Office of Fossil Energy. Available from: <http://energy.gov/fe/services/international-cooperation&gt;. [September 2015]; United States Department of State 2012. “Unconventional Gas: The U.S. Experience and Global Energy Security”. Available from: http://www.state.gov/e/enr/rls/183875.htm. [September 2015].

[vii] The United States Department of State 2012. “Unconventional Gas: The U.S. Experience and Global Energy Security”, United States Department of State. Available from: <http://www.state.gov/e/enr/rls/183875.htm&gt;. [September 2015].

[viii] Congressional Research Service (CRS). “US Crude Oil Exports: Licensing and Data Issues”. Memorandum, Report 7-5700, October 28, 2013. Available from: http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=73e6832f-9670-445b-b8c5-9b254d9f5bca. [September 2015]; 113th Congress 1st Session (S. 192), 2013. “To enhance the energy security of United States allies, and for other purposes” Bill proposition. Available from: http://www.gpo.gov/fdsys/pkg/BILLS-113s192is/pdf/BILLS-113s192is.pdf. [September 2015].

[ix] House of Representatives. 2015. “To adapt to changing crude oil market conditions”, 114th Congress 1st Session (H. R. 702). Available from: < http://docs.house.gov/meetings/IF/IF03/20150709/103720/BILLS-114pih-HR702LegislationtoProhi.pdf&gt;. [September 2015].

[x] US Senator Lisa Murkowski. “A Signal to the World: Renovating the Architecture of U.S. Energy Exports.”, 113th Congress, January 7, 2014. Available from: http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=546d56f0-05b6-41e6-84c1-b4c4c5efa372. [September 2015].

[xi] The U.S. Energy Information Administration (EIA) 2015 “Long Term Applications Received by DOE/FE to Export Domestically Produced LNG from the Lower-48 States”. Available from: http://energy.gov/sites/prod/files/2015/08/f26/Summary%20of%20LNG%20Export%20Applications_2.pdf. [September 2015].

[xii] The US Department of Energy 2015. “Final Opinion and Order Granting Long-term, Multi-contract authorization to export Liquefied Natural Gas by vessel from the Sabine Pass LNG Terminal located in Cameron Parish, Louisiana, to Non-Free Trade Agreement Nations”, Office of Fossil Energy, DOE/FE ORDER NO. 3669. Available from: http://www.energy.gov/sites/prod/files/2015/06/f24/ord3669.pdf. [September 2015].

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