Non-conventional fossil fuel production, production of oil and natural gas by hydraulic fracking and horizontal drilling, continues to transform the world with profound geopolitical consequences. Anadarko Petroleum Corporation, based in Woodlands, Texas, announced that its northern Colorado Wattenberg field may hold more than a billion barrels of recoverable oil and 5.2 trillion cubic feet of natural gas.
These estimates place it with the Bakken shale field and the Eagle Ford formation. These new sources of oil are reversing four decades of declining domestic energy production for the US. In fact, it now appears that in 2011, America will become a net petroleum product exporter for the first time in 62 years.
By pursuing non-conventional production methods, the oil companies are committing themselves to the wealthy nations of the world in North America, Europe and Australia, where 52 percent of the value of the world's oil sources will be. There is definitely a significant westward shift in oil industry investment, away from traditional areas like North Africa and the Middle East. This shift could have far reaching ramifications for the politics of oil, potentially shifting power away from the Organization of Petroleum Exporting Countries (OPEC) toward the Western hemisphere. And the shift reduces some of the risks about the big oil companies that worry investors, making them less vulnerable to nationalization by petrostates like Russia and Venezuela. "A company like Exxon Mobil can eliminate the technological risk" of developing unconventionals, says Amy Myers Jaffe, senior energy adviser at Rice University's Baker Institute. "But it can't eliminate the risk of a Vladimir Putin or a Hugo Chavez. The majors went to Venezuela and lost their property," says Ms. Myers Jaffe. "They went to Russia and had to whisk their CEO off to a safe house. They went to the Caspian and realized they couldn't get the oil out. I for one would much rather invest in a company that had 70 percent of its spending in the Organization for Economic Cooperation and Development (OECD)."
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