Publications

The recent headlines regarding U.S. energy production have been remarkable. In its World Energy Outlook 2012, the International Energy Association ("IEA") forecasts that the U.S. will "become the largest global oil producer (overtaking Saudi Arabia until the mid-2020s) . . . to the extent that North America becomes a net oil exporter by 2030. * * * The United States, which currently imports 20% of its total energy needs, becomes all but self-sufficient in net terms – a dramatic reversal of the trend seen in most other energy-importing countries."    

Similarly, data shows that by 2015, the U.S. will overtake the Russian Federation as the largest producer of natural gas.  For a country that has worried about "energy independence" for decades and spent billions of dollars protecting oil sources in the Middle East, this has been a sudden change with profound implications. 
 

The primary impetus for this change is the "shale gale" – the extraordinary increase in the amount of hydrocarbons found in Continental U.S. shale formations and developed through enhanced drilling techniques, such as horizontal drilling and hydraulic rock fracturing ("hydrofracing," or "fracking").

Besides reducing domestic natural gas prices and promising lower cost electricity prices in the U.S., shale-based hydrocarbons have produced the very real potential that "surplus" natural gas (and perhaps oil) can be exported to higher-value markets.  This paper will explore that potential and the issues that might arise for purchasers acquiring such hydrocarbons from the U.S.

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