Academic journal article Journal of International Affairs

The Impact of the U.S. Shale Boom in Africa

Academic journal article Journal of International Affairs

The Impact of the U.S. Shale Boom in Africa

Article excerpt

While global oil prices are down in 2015 and U.S. production is off its recent highs, net increases in U.S. production over the last decade have impacted economies and oil markets around the world, including oil-rich countries in Africa. Algeria, Angola, and Nigeria, all members of the Organization of the Petroleum Exporting Countries (OPEC), each send a share of their crude oil exports to the United States. This article describes the impact of the U.S. energy boom on Africa, particularly sub-Saharan Africa, and discusses some of the challenges and opportunities that have resulted from the fall in U.S. demand for Africa's oil resources. Shifts in trade patterns demand a refocusing of U.S. security measures and an increase in strategic collaboration, as opposed to isolation.

**********

Due to technological breakthroughs like hydrologic fracturing, and a business friendly environment, the United States has experienced a steady increase in unconventional sources of energy, specifically light tight oil and shale gas, over the past decade. While global oil prices have declined more than 50 percent since mid-2014 (closing at below $50 in September 2015) and U.S. production is off its recent highs, net increases in U.S. production over the last decade have impacted economies and oil markets around the world. As of May 2015, for example, the United States has raised local oil output from 5.07 million barrels per day (bpd) in 2007 to an average of 8.71 million barrels per day in 2014. (1) Natural gas production is also surging, and the U.S., which in the last decade built gas import infrastructure, is now expected to become a net exporter by 2017. (2) As a result, analysts are predicting that the United States will become a net energy exporter by 2022. (3)

As conventional and unconventional sources of energy have continued to flow, several reports have examined the impact of the U.S. energy boom on the national economy and on our relations with the Middle East and other petroleum-dependent countries. (4)

However, there has been much less attention paid to how the U.S. shale boom has affected Africa, particularly the oil-producing countries in the region. Algeria, Angola, and Nigeria--all members of The Organization of the Petroleum Exporting Countries (OPEC)--send some share of their crude oil exports to the United States, although the amount varies. This article describes the impact of the U.S. energy boom on Africa, particularly sub-Saharan Africa, and describes some of the challenges and opportunities that have resulted from the fall in U.S. demand for Africa's oil resources. Shifts in trade patterns demand a refocusing of U.S. security measures and an increase in collaboration, as opposed to isolation.

[FIGURE 1 OMITTED]

BACKGROUND

The continent of Africa hosts 54 countries. A significant number of these have vast reserves of natural resources including minerals, diamonds, oil, and gas. Table 1 below provides information on those countries that produce oil, their estimated reserves, the dependence of their economies on oil revenue, and the share of their energy exports to the United States.

Prior to recent domestic developments in unconventional fossil-based resources, Africa played an important role in U.S. strategy to diversify its energy base over the last twenty years. In particular, "West Africa has increasingly formed a core part of a broader American global strategy of energy security through diversification," and "the U.S. has emerged over the last decade to stand now as one of the key players in African energy politics." (5) Now, Africa, particularly West Africa, remains one of the areas of the world most adversely impacted by the U.S. energy boom, particularly Algeria, Angola, and Nigeria--all members of OPEC.

Crude oil exports from Africa to the United States have fallen from a high of 2.4 million barrels a day in 2007 to 0.29 million barrels a day in 2014, which represents an 87. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.