It's a pleasure to read such a well-written, well-researched, and detailed analysis of the Shale Revolution.

This is a well written article, but it does not mention the potential impact of renewable energy sources, such as solar and wind. Major breakthroughs in solar, wind, and energy storage technology are being reported routinely. It is only a matter of time, possible within few years, that these technologies will become major part of energy production worldwide, giving tough competition to coal, oil and gas.

As it is now, per-MW price of electricity generated by wind is on par with that from natural gas and coal. And with the development of bigger and more efficient wind turbines, the per-unit cost of electricity generated by wind will get even cheaper. Similarly, cost of solar panels has plummeted by 80% in the last five years, and has been continuing on its downward trajectory. Recent advances on new materials, such as Perovskite, have potential to further drive down the price of solar power.

Undoubtedly, indeterminacy in power generation is a major hurdle that makes these renewable sources of energy unattractive as compared to fossil fuels. Again, advances in battery technology have been encouraging, both in terms of cost and capacity of energy storage.

It is encouraging to note US is at the forefront of this development and that cutting-edge research in this field is being done by US universities and companies. Resurgence in oil and gas production, combined with developments in renewable energy sources and energy storage technologies, will help maintain the status of United States a dominant player in world affairs. The declinists, who gleefully predicted loss of America's preeminence and economic power in the aftermath of the financial crisis, would have to wait for couple of decades to renew their prediction.

I find it interesting that Brazil appears to have been overlooked as part the world energy equation.

Does this mean I can start driving a V-8 again. Not to give my age away.

You oversell the impacts on oil prices. I think that global demand is growing fast enough, and US production is relatively small enough (and high cost) that I don't think we'll see a big price decline.

Sustainable development should form the core issue

Couldn't the fracking revolution put destabilizing pressure on Middle Eastern and Eurasian countries? I understand that the US will win out in the race for energy and money, but doesn't destabilizing the Middle East and other important regions run counter to American interests?

This article is just a propaganda piece. Let's just look at a few key points:
The US has rapidly expanded its operations for tight oil and nat. gas. However, it is nowhere hear energy independence. For one thing, the US is producing more oil than it did in say, 1989, but that's still not where it was when production peaked in 1970... and even if the US were to expand production (in a sustainable way) to 1970 levels, it would still only satiate about 1/2 of US oil demand. To compare the US to Saudi Arabia is kind of foolish, and if you read even the IEA's Executive Summary, it would tell you that any such circumstance would be only temporary.
http://www.iea.org/Textbase/np...
The reason these "newly viable" technologies have become viable is a function of sustained high oil prices. These methods are not sustainable at lower prices, and more and more drilling is necessary to combat decline rates. The US now has more than three times the number of oil rigs in operation than it did in 1989, while producing approximately the same daily volume of oil. That's also mentioned in the Executive Summary of the IEA report.
We're not going to watch oil prices fall and stay low anymore, if the "newly emerging" market is really in shale oil/horizontal drilling/fracking. There's too much capital input involved.
Next, if we look at price of nat. gas, we'll see that it yields a higher price as an export than it does domestically, so it clearly makes sense for companies to export American natural gas, since they're taking a loss on the domestic sales. That will NOT make the US anything other than a natural gas exporter in the short term. As soon as domestic prices rise, exporting will taper off. And as a net proposition, the US shouldn't be exporting natural gas anyway since it is also a natural gas importer that uses far more than it produces. On the whole, the US is just wasting money and resources so that a few companies can make huge profits.
The shale oil/shale gas "boom" is just that-- a boom. It is not a long-term strategy, and it's not a revolution. It's just a temporary adjustment and if any kind of advantage is to be gained from it, the US needs to use the opportunity to develop more alternative energy resources. That's the number one way that the US can affect the power of countries/organizations who have more significant energy resources: by consuming less of those resources... not by fighting an uphill (but ultimately losing) battle with a temporary advantage.
I expect more from contributors to Foreign Affairs Magazine. This article drastically distorts reality and ignores some very important details.
It sure sounds rosy, though!

A very well written and informative article, at last! Of course it is impossible to address all issues in one article and even though all this is very promising, there are some very serious to be thought of. First of all fracking is extremely challenging environmentally because it endangers the water tables and this is a much more serious environmental danger than the CO2 emissions, which are very questionable in any case, since CO2 becomes dangerous in extremely high concentrations and is also necessary for life. Any way except from the environmental challenges, releasing massive energy supplies would reduce the oil price and it will cause problems also in America. The energy capital from all the oil and gas producers goes through City to Wall Street, if those money stop flowing then there is going to be a serious problem! In addition all the Arab countries which are friendly and collaborate with the US, they have some huge weapon orders in line cost a few dozen of billions, if they feel threatened by such actions they would either cancel their orders and try to collaborate with others...Otherwise if they already have those weapons in hand they could use it against US allies. Also such actions could even lead to alliance among currently hostile countries and in the Middle-East this is something very common.
China will be the most benefited country and this is something i am not quite sure if is good for the American interests, since it is clear that China is the one that threatens the American primacy and not Russia.
And last but not least, perhaps such developments could lead to even more immigration pressure from South America.
In any case a very good article indeed!

Never seen such B.S. propaganda against Russia in my life on top of the "Freedom & Democracy" lies, which is code-word for CIA operatives (think Blackstone hired mercenaries) regime change. Expect to see Venezuela have a Ukrainian crisis in the near future as they have tons of oil & no Central banksters. Follow the money; leads to the corrupt truth. Now either Obama is a continual liar and he is or this article contradicts him (which it does) [both are chuck full of lies], for he said by necessity that Americans must expect higher energy costs, which we have seen despite all this extra energy. Follow the money; leads to the corrupt truth. This is not what he meant; he meant real high $$$ & it is coming. Why are we in Afganastan? Poppy & no central bank (Think heroine & Bush family fortune back to Prescot Bush (a communist) [Google it] Follow the money; leads to the corrupt truth. Why Iraq? Oil & Saddam was refusing to settle in Petro-dollars. Follow the money; leads to the corrupt truth. Why Ukraine? Natural gas, Monsanto contracts for GMO food & now installed Central Bank. [will backfire] Follow the money; leads to the corrupt truth. Why Syria/Iran? Natural gas & no western central bank. Follow the money; leads to the corrupt truth. They count on you people to be stupid and swallow the B.S. that they feed you; enjoy the food and then go back to sleep; The IMF, Council of Foreign Affairs/Relations, the Western Central Banks & others, are all "banking" on it. BTW, Haliburton & covert affiliates have most of the major contracts for Fracking in the US and was directly responsible for the BP disaster in the gulf; notice Obama immediately removed the oil drilling rigs from the Gulf & Haliburton went to work immediately into exponential increase of the fracking business, which is real bad for the environment as we will find out in the future. These are very dangerous people who believe that having titles and degree makes one a better human being than another: I'd take farmer brown everytime if I were in a survival situation over Mr. Masters and Mrs. PHD and University anywhere; wouldn't you?

Mar. 16 -- I read this article during the afternoon of the elections in Crimea and the ongoing problems created by Putin in the Ukraine. Given today's circumstances, the section on Russia is especially pertinent and provides additional background. The entire article is very well written. Many thanks.

Energy is China's Achilles Heel in the Pivot to Asia. America has a unique ability to conduct ''distant Blockade'' operations and switch the light off.

It seems too good to believe, but one important implication may be the fate of Arab Oil producers. While Saudi's are being pushed deeper into to terrorists philosophy concerning Syria and Iran without USA, their oil revenue would have unpredictable decline. It seems another kind of geopolitical conflict encircling muslim nations. The successful role of Al-Jazeera TV would be replicated in African region for similar plans.

Thanks for the update!

Good article. I agree that the shale revolution will have many of the effects mentioned in the article, but one should note the decline in conventional/legacy production. Over the last five years, the majors have invested hundreds of billions in legacy plays and do not have much to show for it. If these new unconventional resources didn't come on the market, we would have a much different picture today and the U.S. would not have the diplomatic flexibility it enjoys today.