Shale Markets, LLC / Longtime defense expert says shale revolution key to national security

Shale Markets, LLC / Longtime defense expert says shale revolution key to national security

Longtime defense expert says shale revolution key to national security

Growth of oil and gas production seen as a powerful tool.

Nomac Drilling Corp. floorman Matthew Brown (right) steadies a section of drill pipe as floorman Richard Lane cleans the connection during natural gas-drilling operations for Chesapeake Energy Corp. in Bradford County, Pa. Courtesy

Posted: Saturday, May 31, 2014 12:00 am

By ROD WALTON World Business Editor | 0 comments

The U.S. shale oil and gas revolution has the long-term potential to remake the world political landscape — at least for now.
Longtime defense expert and former aide in the second Bush administration, James Clad, admitted he has conflicting views on how we use the power of growing national oil and gas production. On the positive side, though, he believes that it makes us safer and cleaner.
“On a good day that’s how I feel,” Clad quipped during a telephone interview Friday with the Tulsa World. “The arc of innovations and changes in fuel is long and doesn’t move quickly but bends toward a cleaner future.”
Clad is speaking in Tulsa on Monday evening to the Tulsa Council for Foreign Relations. His topic for the nonpublic event is “The World Politics of a Changing Energy Landscape.”
In fact, he marvels at how the combination of hydraulic fracturing and horizontal drilling has shifted the U.S. from a energy importer to the world’s biggest natural gas producer. This nation also may catch Saudi Arabia as the top oil producer by 2020, according to many reports.
“What a turnaround, when you consider that all the smart guys were saying in 2007 that we’re going to become the biggest exporter of natural gas,” he recalled.
Clad, who grew up in New Zealand, is currently an energy adviser to the Cambridge Energy Research Associates. He served as a deputy assistant secretary of defense under Secretary Robert Gates and President George W. Bush from 2007-2009.
Many of his energy stances are bipartisan. He credited longtime energy conservation efforts with helping make the shale revolution work better and moving power utilities away from coal-fired generation.
“It’s pretty obvious we live on a pretty small planet and have finite resources,” Clad said. “I agree with President Obama that natural gas is a bridging fuel” toward a future, even more long-term source.
But it’s a pretty strong bridge, he added. Clad supports efforts to export liquified natural gas, particularly to Europe, and transition the U.S.’ own transportation fleet to that fuel source which is cleaner than refined oil products.
“Yeah I think it’s a good thing to be in the export game,” Clad said, later adding, “There’s going to be a breakthrough moment when you say ‘hey, remember when trucks used to run diesel.’ “
Clad isn’t the first or last to point out the dangers of reliance on energy imports. Oilmen such as Tulsan George Kaiser have long criticized the U.S. dependency on oil from nations with volatile political regimes, saying we were “funding both sides of the war on terrorism.”
The U.S. is approaching nearly 8 million barrels in crude oil production per day, according to the federal Energy Information Administration. Wellhead innovations and drilling cost efficiencies could drive that total to 10 million barrels or more, some analysts believe.
But whatever the final peak is, this growth already has strengthened the U.S. hand in foreign policy, giving American leader’s breathing room to deal strongly with challenges in Iran and China, among others, Clad noted. But those challenges won’t completely change.
“It’s a troubled world even if we go meet that 12 million barrels a day target,” he said.
Yet the new golden era of American drilling is also producing so much natural gas liquids that it is sparking a manufacturing renaissance of sorts. Petrochemical plants are growing on the Gulf Coast with the benefits of lower priced ethane as a feedstock.
And energy companies, which already innovated their way to this new shale revolution, probably have even smarter moves in their plans, he added.
“A lot of things are going in the direction of higher innovation,” Clad said.