Fracking technology is changing Middle East

Machinery Market News

Tom Donilon, a former National Security Advisor to President Obama, believes that hydraulic fracturing (fracking) is responsible for a better relationship between the governments of the USA and Iran. Less than five years ago, Iran’s president Mahmoud Ahmadinejad was openly saying that his country was building a uranium-enriching facility and was testing missiles capable of reaching targets in Israel. Now, new president Hassan Rouhani is talking about “containing” his country’s nuclear programme and is making conciliatory overtures towards the West.

The change in relations is due, in Mr Donilon’s opinion, to “the flood of oil and gas coming out of the ground at home since 2013 due to fracking technology”. He said: “America’s sudden energy abundance has dampened the impact of reduced oil exports on the global economy, making truly harsh sanctions on Iran possible. That led directly to the election of Mr Rouhani last spring, resulting in the fact that we’re now at the table talking about the nuclear programme. The downward pressure on oil prices created by plentiful crude in North America gives the USA leverage that it didn’t previously have in dealings with the major petroleum-exporting states, including some that have been particularly irksome to the USA of late — like Venezuela and Russia.”

In the five years since Barack Obama became president, US oil imports have fallen by 44% and imports of natural gas have fallen by 58%. Facilities built to receive imports of liquified natural gas are being converted into export facilities, and the USA is projected to overtake Saudi Arabia as the biggest producer of oil on the planet next year.