WSJ: Shale Gas Is America's Geopolitical Trump Card

When Russia and China announced a $400 billion deal last month for Russia to supply China with 38 billion cubic meters of natural gas annually for three decades, some analysts heralded it as a tectonic geopolitical shift.

Instead, Vladimir's Putin's haste to sign a deal that had been in the making for more than a decade confirmed his country's political weakness. Despite being buoyed by high energy prices in the first decade of this century, Russia is in decline. Demographically it is shrinking; it has severe health problems (the average Russian male dies in his early 60s); and it is a "one-crop economy" heavily dependent on energy exports. Russia needs reforms to build a diversified, entrepreneurial economy, but its actions in Ukraine have brought on sanctions that weaken its access to Western ideas and technology. Becoming China's gas station does nothing to reverse this trend.

The real geopolitical shift is the shale-energy revolution that took off in the past decade. While the technologies of horizontal drilling and hydraulic fracturing are not new, their pioneering application to shale rock is largely a product of American entrepreneurship in the past decade.
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