German Spy Agency: Geopolitical Consequences Of US Oil Boom

testosteronepit's picture

Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

Much digital ink has been spilled about the oil and gas boom in the US, the result of ever improving fracking technologies, and whether or not it will lead to energy independence, or even turn the US into an oil exporter. Now a “confidential” report by the German version of the CIA, the Bundesnachrichtendienst (BND), seeped to the surface. It sketched out the boom’s geopolitical consequences. Biggest loser? China.

BND reports have conveniently seeped out before. For instance, a “secret” report on how the pending bailout of Cyprus would use German taxpayer money to bail out rich Russians who have deposited their “black money” in the Cypriot banks that are now collapsing caused an uproar—and threatened to derail the bailout [for that debacle read, The Bailout Of Russian “Black Money” In Cyprus].

The oil and gas boom is transforming the US, once the world’s largest oil importer. Natural gas production in the US already exceeds demand, and the glut last year forced prices down into the realm of maximum pain. So the US could become a major exporter of natural gas—pending approval by the government and construction of LNG export terminals.

Oil independence is tougher. The US is still a large oil importer. Yet, if the current boom dreams come true, the International Energy Agency (IEA) might be right in its estimate that the US could become the largest oil producer in the world by 2020, surpassing Saudi Arabia and Russia. Even if that estimate is off the mark, the US will certainly be much less dependent on oil imported from countries other than its reliable neighbors, Mexico and Canada.

One of the reasons—or perhaps the only reason, despite pretexts galore—the US has been so deeply involved in the Middle East, including long and expensive wars, and why the highly unpalatable regime of Saudi Arabia has been an anointed ally for decades, is oil. The US is hooked on it and must get enough of it at a manageable cost to keep the wheels of the economy greased.

But if the US is able to do without oil from the region, it would give the government a lot more “freedom to act” in the realms of foreign policy and security, predicted the BND report. And the constant threat by Iran to close the Strait of Hormuz, through which much of the oil from the Arabian Peninsula transits? It would be shrugged off in Washington.

US independence from Arabian oil would impact the relationship and balance of power between the US and China, according to the BND report. Struggling to meets its skyrocketing demand for oil, China will buy about half of the oil produced on the Arabian peninsula, and it will, like the US before it, become dependent on it—but unlike the US, it won’t have the military power, at least not initially, to protect its energy sources and transportation routes.

The vast sums of money the US spent on military adventures worldwide, even the mere presence of its fleet, secured these transportation routes. To the great benefit of China. But once the US is no longer dependent on Arabian oil, the government might be unwilling to plow money into the military capability needed to secure the continued flow of oil from the region.

“The vulnerability of the Chinese energy supply routes” would grow, the BND report predicted, which would give the US more leeway in dealing with China. Thus, in the worldwide geopolitical scramble caused by the US oil boom, China would be the biggest loser.

Russia would also be a loser, according to the report. The main supplier of fossil fuels for central Europe would face more competition from countries, such as Nigeria, that used to deliver a significant portion of their production to the US. They would have to find other customers, including in Europe, Russia’s energy backyard. The ensuing downward pressure on prices could hit Russia where it is vulnerable: production costs in its frigid and remote northern areas are higher than in other parts of the world.

And OPEC members would be losers. Their market power would dwindle further, and the cartel’s feared ability to push up prices might drift toward irrelevance—as not only the US but numerous other countries, particularly in Africa, are beginning to experience their own oil booms [Kenyan Oil, Getting Hotter: Interview with Taipan’s Maxwell Birley].

Winners of the US oil boom? Oil importing countries, particularly those dependent on Russia, according to the BND. Among them Germany, which would “significantly increase the security of its energy supply.”

In the US, the oil and gas boom would improve the competitiveness of the still listless economy as energy costs would decline, relative to other industrialized countries. For example, the cost of electricity in the US is already 40% lower than in Germany. Energy-intensive industries will find the US a more attractive location. The BND even sees the possibility that the US might be able to get a grip on its gargantuan trade deficit as oil imports shrink, cutting it in half by 2020—which, it imagines, would prop up the dollar as a reserve currency for a while longer.

In its January report, OPEC said the US may post the highest oil-production increase among non-member states this year—while production in some member states is declining. And now, OPEC is fretting about Washington. Read.... Why OPEC Is Worried About The US Congress.

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Joe A's picture

Perhaps the BND could follow some lectures in geopolitics. If the US becomes selfsufficient and even an exporter of oil, they no longer need the oil from the ME -which they don't consume that much now anyway- to keep petrodollar king -or not that much- and the US would not give a rat's ass about the ME. That would entail that China would become buddy-buddy with ME countries and who would be the big loser then? You guessed it: Europe.

ebworthen's picture

Lower prices for electricity?

Tell my utility company, they haven't got the memo.

The U.S. needs career employment, yet the past 10 years has been little more than winnowing out anyone who is over 35 or has children - and keeping the under 35 crowd busy with corporate culture lies and non-career employment.

Part time jobs, no benefits, low pay.

Until the U.S. decides to hold the oligarchs and kleptocrats accountable with jail time and restoring the rule of law and common sense it doesn't matter how much gas/oil/coal/energy we have and China has nothing to worry about.

captcorona's picture

The US does NOT Consume Middle Eastern oil in any real volumes, the Europeans do. The US consumes North American Oil and imports Alantic Shelf oil from the Western Continent of Africa. The only real ineterst the US has in Middle Eastern oil is that it is traded in Dollars..Long live the Petro-Dollar....The rest of this article is garbage as well. Certainly German Intelligence knows the above information so this is obviously a propaganda piece. Oil is a world commidity, so long as it is traded efficently the Producer Nations and the Consumer Nations benefit. The US Military is not needed to make sure that this happens. It's simply about the $4.3 Trillion Dollars that rest out side the US Economy for daily oil trades..Nothing more...Long Live the Petro-Dollar for the day it dies is the day that Hyper-Inflation comes to the shores of the USA. Hedge accordingly!

Setarcos's picture

Yes it is all about the petro-dollar and only marginally to do with the commodity of oil, though the era of cheap/easy oil is more or less finished, e.g. US 'oil (and gas) reserves' are nothing like the days when there were "gushers" in Texas, for instance.

The wars are not going to stop, all the while there is the petro-dollar, easy-oil from some place + other easy-resources, all traded in USD so far.

That's why Sadam Hussein HAD to be killed and Qadafi recently, with Syria and Iran due for "regime change", in favour of the globalistic banking cartel that uses US, NATO and satrap Arab mercenaries to impose the NWO/PNAC ... note that I do not cite "the jews" in all this, because I believe that Israel is just "the unsinkable aircraft carrier" for the Washington Empire ... akin to the lawless frontier forts that killed everything in the Westward push for Empire, whether the native peoples, or those of the Spanish/Mexican Empire.

Now the attention is Eastward for global hegemony, so Iraq HAD to fall because of the challenge to petro-dollar hegemony and Libya of course, now Syria and Iran.

We are unfortunately witness to the Empire in decline, so should not be surprized about any stunt/further false-flag like 911.

http://whatreallyhappened.com/WRHARTICLES/bbc_wtc7_videos.html?q=bbc_wtc7_videos.html

Colonial Intent's picture

"The US Military is not needed to make sure that this happens."

We will find out by the end of this decade if the above is true.

 

Cardinal Fang's picture

so, everyone is a sheep. The gov media complex is the sheepdog. who is the shepherd again? I keep losing track of the sheep metaphor.

Colonial Intent's picture

The path of the righteous man is beset on all sides by the inequities of the 99% and the tyranny of Govt/Corp of America.

Blessed is he who, in the name of charity and good will, shepherds the sheep through the valley of darkness, for he is truly his brother's keeper and the finder of lost sheep.

 

walküre's picture

When the German BND which is the equivalent to the US CIA releases a supposedly "secret" study, you gotta wonder who this propaganda piece is directed at. That's all there is to it, folks.

Stuck on Zero's picture

I've heard tell that the U.S. spends about $50 per barrel protecting our sources.  We'd be a hell of a lot better off if we spent that here.  At the same time China is learning to frack, go after deep oil, and extending pipelines into Russia, Mongolia, and all the way to the middle East.  Oil may come down in price and then we'll choke on our exhaust fumes.

 

oilman8864's picture

The EIA says the US will be a net exporter of naual gas in 2020. I'm not sure how a country can have a glut of something they have to import.

This article is idiotic

 

 

FullFaithAndCretin's picture

Gas. Gasoline. Subtle, I know, but you do reaslise they aren't the same thing.

post turtle saver's picture

The U.S. is a net exporter of gasoline, btw. And soon, LNG.

I test drove a Tesla S the other day. I've found my next car. Another five years of this and gas will be back to a buck a gallon again.

Flakmeister's picture

Are you too stupid to realize that being a net exporter of gasoline means the US has more refining capacity than it needs... It is exporting refined *imported* oil...

Flakmeister's picture

Wow...

Lame and full of weasel words...

Not once was it noted that the largest factor in the decline of US oil imports is demand destruction....

tony bonn's picture

"...The US is hooked on it and must get enough of it at a manageable cost to keep the wheels of the economy greased..."

make that the wheels of tanks....oil is the driver of the bankster controlled us government.....dependence upon mexico, canada, or middle east has never been an issue as military and cia operations will always keep these compliant nations under heel.....the risk has been russia and china and preventing them from having reliable supplies or customers of energy as the case may be....

whatever the value of the shale, it is a short term proposition.....

cynicalskeptic's picture

Look at how the US squandered North Slope oil.  We ahd a chance to use those supplies as a buffer while convertiing AWAY from oil but instead the US built superhumngo SUV's and used MORE oil.

Colonial Intent's picture

Over here at Airstrip One, we squandered our north sea gas reserves on a decade of tax breaks for rich tory voters.

Good to see you doing the same.

DoChenRollingBearing's picture

Peru's natural gas industry is very worried about our shale gas, I have the article at my office.  Peru has a large NatGas field in its SE jungle, a pipeline brings it to Lima (where they have converted a large part of their car fleet to run on NatGas).  Peru's original plan was to send a lot of LNG to the USA...  Looks like that will not happen now.

steveo77's picture

I tried a new Survey tool, Survey Monkey. Even the free version looks really good, head and shoulders above everything else I have ever seen. 
 
So I made an entertaining survey on the inflationists versus the Deflationistas (TM), check it out here: and don't be bashful about kliking some adz 
 
http://oahutrading.blogspot.com/2013/01/deflation-or-inflation- survey.html

Bicycle Repairman's picture

How anyone can read this article, even if you only accept its existence nevermind believe it, and think that oil is not completely gamed, is beyond me.

You'll never know the real cost or availability of oil.  Never.

espirit's picture

Yes, but... Should the U.S. own resources in MENA, then it's not technically exporting said resources into the U.S.

This is a fight to the finish.

Bicycle Repairman's picture

This fight wasn't necessary.  What exactly was the threat to American hegmony in MENA?  None.

China, Russia and others cannot afford to lose, but the US could always retrench.  Unless, of course, the Chinese or Russians decide to be really sore losers.

epwpixieq-1's picture

"In the US, the oil and gas boom would improve the competitiveness of the still listless economy as energy costs would decline, relative to other industrialized countries." or "Much digital ink has been spilled about the oil and gas boom in the US, the result of ever improving fracking technologies"

Repeat these lies 100 times and again they will be lies.

Oh let me think ... may be untruths (lighter version) ... NO DEFINITELY LIES.

For those interested to analyze ( and project ) the future 3-5 years based on the facts look at the lecture by Dr. Anthony Ingraffea. Dr. Who ... ? Well if there is a title "the grandfather" of fracking this is the guy holding it. He was researching and defining the process 30 years ago!

http://www.resilience.org/stories/2013-01-04/shale-gas-and-fracking-jan-4

105 minutes full of content not of propaganda. After that everyone with some level of intelligence will understand the HIGH COST of  the "cheap" fracked burnable hydrocarbons.

And one is clear ones we look in the future:

IT IS EXPENSIVE, VERY EXPENSIVE!

Canadian Dirtlump's picture

if anyone ever balked at calling german a language of love they should revisit the notion when they experience how sensually the word bundesnachtrichtiendenst rolls off the tongue. it may not be speaking in tongues but you can see it from there.

August's picture

Move that second "i", and you've got a solid up-arrrow.

kaiserhoff's picture

When, exactly, did oil become a theological issue?

magpie's picture

As long it is traded in the Dollar its piety is not be questioned.

Notarocketscientist's picture

I wonder what the Military Industrial Complex will have to say about a foreign policy that does not involve engaging in wars to thieve resources

yt75's picture

Maybe you can have a look at slide 4 below to have a perspective on the extend of this "shale revolution" :

 

http://www.businessinsider.com/arthur-berman-shale-is-magical-thinking-2...

 

And not forgetting the extraction cost aspects, see for instance :

http://www.theoildrum.com/node/9506
And more precisely on the cost and necessary investment money flow aspects :
http://www.theoildrum.com/node/9572/924539

InvalidID's picture

 

 There is still plenty of gold, silver, platinum, various rare earths, rubber, tillable land, and fuck it, lets take others oil while we're at it. We just won't have to make oil the number 1 priority is all.

notadouche's picture

Actually upon hindsight the last few decades of "dependency" on foreign oil wasn't a bad move by the US.  Buy and use up all the "easy to get" oil in foriegn lands while hoarding their own supplies thus if and when "Peak Oil" becomes a reality the US will have left much of their oil resources untouched and allowing the US to become even more powerful in the world of resource management.   Do I really think the US was this intelligent and forward thinking? No of course not but it may work out that way in any event.

yt75's picture

For your info nothing of that sort is really the case.

1) Contrary to popular belief, the first oil shock main reason was the US production peak in 1970, and not the little "song" Arab embargo (a quasi non event in number of barrels taken out of the market).

And below should make it clear :

http://s3.amazonaws.com/greenwala-attachments/production/attachments/221...

2) Further to US peak in 1970, the US DID try to produce more, drilling increased by a lot, and rising price was part of the majors/US diplomaacy strategy : necessary to start the more expensive plays, typically : Alaska, Gulf of Mexico, North Sea

 

Sure there remains tar sands (in canada) and shale oil/gas (and some conventional, but which hasn't been "saved" in anyway), but this isn't the same stuff, much more expensive, and not in $ only, but also in energy, in other words the net energy coming from these isn't really the numbers given (and much worse for corn ethanol)

An expert perspective on US future prod :

http://www.theoildrum.com/node/9619

 

SunRise's picture

Great point NAD!  I've often thought of this myself; which of course; is the definition of a Great Point!

magpie's picture

The one thing that is sure is that the German government will not allow such changes to be reflected in energy prices.

TheMayor's picture

Russia is so confounding.

It has all the potential in the world but the politics and corruption are such a turn off, they just do it on a grander scale than the USA. 

But have no fear, the USA will build the keystone pipeline and offshore export facilities and instead of having some sense of energy independence, we will export it and drive our own prices higher.

Bicycle Repairman's picture

"drive our own prices higher."

LOL.  It's a global market.  The market will set the price.  LOL.

falak pema's picture

Testo pit is always pushing pseudo sensationlism and superficiality. His spiel is positioned at that end on the internet media spectrum closest to MSM.

Period. 

Oil as we all know is the name of the Pax Americana game on triple key plays : energy, MIC and moneyline wise. He is a bit late getting on that bus and his enamourment for tight Bakken oil is now stale meat, as we've been thru this loop here on ZH. 

Germany now has an Ost energy politik and a commitment to alt energy which is turning out to be a big challenge. 

Its payout will come when we hit peak cheap conventional oil bigtime. And we know we are not far from that point; aka 2020. But this does not address the private motor car and truck segment which is oil dependent (forget elec for two decades).

In the meantime the Eurozone lack of RM and net oil imbalance growing will condemn private motor car industry which will continue to shrink. Cars : Germany's biggest export card....Germany will now be in the eye of the Euro cyclone; its banks and its exports the two main pillars are now in turbulence zone. As France and UK are nearer Italy than Germany. 

2013 will be a bitch of Euro austerity. The whole global trade argument now has to be redefined; we cannot just live in a one to one global Oligarchy free trade combine from China to the US Pacific. Somethings gotta give, this paradigm is bent.

joego1's picture

A bright note to the American story. Let's see how the cabal fucks up this one.

Freddie's picture

Well Operation Mockingbird has an Isla-MAO in charge of the USSA.

q99x2's picture

I missed the part where it said the American citizen would benefit from this.

joego1's picture

Where is JR when you need him?

The Alarmist's picture

The New PTB had him put on ice before he could threaten their new green dream.

Seer's picture

When will all these cornucopians die off?

Until you can add a third dimension to your assessments -TIME- then could you please stop writing?  How fucking long would all that "plenty" continue to exist?  What extraction/consumption rates are we talking about?

Oh, sorry, that's how it works... I sometimes forget that this is likely book-talking and that you (and other cornucopians) are pushing something in order to profit off of it.

"But once the US is no longer dependent on Arabian oil"

The US is dependent on Arabian oil only to the extent that it's key trading partners need it.  The US imports mostly from Canada, Mexico and Venezuela (http://www.businessinsider.com/map-us-oil-imports-by-country-of-origin-2...).

I suppose that you could say "dependent on cheap oil," as that's really how it works: right? this is an economics blog, so folks should have a clear understanding that oil is a globalized commodity and that it's price that's affected the most (shipments and delivery is easier for those exporting to the US.

 

100pcDredge's picture

BOOM! Boooooom... BOOMBOOM BOOM.

Ehm.. sorry.

caShOnlY's picture

Lets be honest here: We are in Iraq, going into Africa so of course we will be an oil exporter.  Right back to ourselves!!!

notadouche's picture

Well we have been in Iraq for well over a decade.  What's taking so long getting that oil back to the US?  I'd hate to think that we raped and pillaged and stand accused of doing for the oii and yet not get any oil.

bank guy in Brussels's picture

Yes, the Oil Drum that you link there, is a terrific site re oil, energy and resource over-reach ... they aren't buying this 'energy boom' story quite so easily

This 'US will be oil independent!' stuff might be total CIA propaganda shite, with Germany being the US poodle here

As German ex-intelligence agents have admitted ... explaining also why Germany's alleged gold claw-back from the US Fed is so limp and weak, 8 years from now, ha!

Reporting a 1949 US-German secret treaty that makes Germany a submissive toady of the US for 150 years, book 'The German Card' by Gerd-Helmut Komossa:

« The former head of the West German Military Intelligence has issued a book revealing secret details of a 1949 US-German treaty, alleging America and its allies have been deliberately suppressing the nation’s sovereignty ... which will be in force for another 90 years

« Komossa says the secret agreement means that all political parties in Germany are supervised by a special Washington-based body, that the country’s army takes part in all NATO missions at first demand and that all German gold reserves are stored in New York.»

http://rt.com/usa/news/germany-us-pact-komossa/

Buck Johnson's picture

Thanks I'll read this, also that "gold" clawback is tepid at best.  They where told to not get it and they said okay to save face using the 8 year (which you and I know that it won't be given).

H E D G E H O G's picture

BINGO BANK GUY!   " with Germany being the US poodle here" it is ALL GLOBAL bullshit anymore, wth the bloody hands of the USA covert corps. directing the banking, military, and msm/propaganda campaigns.