Our cover story this month examines the world stage for unconventional development and how challenging it will be for other countries to replicate the success of the US in exploiting these resources.

As the US continues to ramp up its oil production, two questions arise: not only “how can other countries replicate this success?” but also “how will this impact other countries who have become accustomed to the US being a ‘has-been’ on the international stage?”

This very question was the topic of a Manhattan Institute-sponsored discussion in New York City in October. Panel members Sandy Fielden, director of energy analytics for RBN Energy; Steve LeVine, a fellow at the New America Foundation; and Ian Nathan, manager of global gas and LNG for Energy Intelligence; were joined by Mark Mills, a senior fellow at the Manhattan Institute, to discuss the topic “Globalizing the Shale: Which Countries Will Win?” The consensus was that the shale gale in the US has gotten large enough to have a significant impact on the world economy.

“Oil is the largest traded commodity in the world,” Mills said in his opening remarks. “It’s a permanent shift, and it’s not driven by the government. It’s driven by the structure of the US economy and the entrepreneurship of Americans.”

The gist of the conversation revolved around US imports. Fielden noted that every barrel the US produces at home is one less barrel it needs to import from somewhere else. Given the appetite of the US for hydrocarbons, that translates into a rather major shift in the global fuel mix. But shale oil is not the only story.

“This is a global story,” LeVine said. “We have our incredible boom, but there is still significant oil present in Saudi Arabia, both coasts of Africa, the Eastern Mediterranean, Kurdistan, and Australia. The reason the US boom is important is that, all things being equal, these volumes have created a lot of moving parts.”

Some of the “losers” in this new environment include Russia, which is losing some of its clout on the world stage because the US is now producing so much oil that it has, by some accounts, overtaken Russia as the world’s largest oil producer. OPEC countries also stand to lose, and Iran in particular will suffer because it can no longer use its vast oil reserves as a geopolitical weapon.

Winners include Mexico, which is benefiting from low-priced gas imports from the US, and Japan, which can take advantage of lower priced imports if the US begins selling LNG overseas.

Overall this shift will continue, and countries will have to hit their marks. “You can’t take the volatility out of oil,” Fielden said. “It’s always going to be volatile, and news travels fast.”