The shale energy revolution is likely to shift the tectonic plates of global power in ways that are largely beneficial to the West and reinforce US power and influence during the first half of this century. Yet, most public discussion of shale’s potential either focuses on the alleged environmental dangers of fracking or on how shale will affect the market price of natural gas. Both discussions blind policymakers to the true scale of the shale revolution.The real impact stems from its effect on the oil market. Shale gas offers the means to vastly increase the supply of fossil fuels for transportation, which will cut into the rising demand for oil - fuelled in part by China’s economic growth - that has dominated energy policy making over the last decade.There are two major factors in play here. First, the same shale extraction technology of horizontal drilling and hydraulic fracturing can be employed whether the rocks are oil-bearing or gas-bearing. We have already seen over half a million barrels of oil a day flowing from the Bakken field in North Dakota. The recent Harvard-based Belfer Centre report, “Oil: The Next Revolution”, suggests that shale oil could be providing America with as much as six million barrels a day by 2020. The US imported only 11 million barrels of crude oil a day in 2011. Given the potential for offshore and conventional domestic oil production, this would suggest that by 2020 America could be near energy independence in oil.However, many supporters of energy independence miss a key point: the major geopolitical impact of shale extraction technology lies less in the fact that America will be more energy self-sufficient than in the consequent displacement of world oil markets by a sharp reduction in US imports. This is likely to be reinforced by the development of shale oil resources in China, Argentina, Ukraine and other places, which will put additional pressure on global oil prices.The second factor is the potential to use natural gas for transportation. Some analysts suggest that this will only be a realistic prospect for fleet and long-haul road transportation. But they are overlooking the immense advantage that natural gas has as a transportation fuel in America and Europe, which have both developed a natural gas infrastructure in urban areas that takes piped natural gas into homes, offices and supermarkets.The incentives to develop shale oil and natural gas are very great. But so far, the US has only experienced the first stage of low natural gas prices and the re-importation of energy intensive industries such as chemicals and steel because of low gas prices. The next stage of the shale revolution’s impact is going to be felt as major stimulus gets underway from lower oil prices. More broadly, the shale revolution will grant the US a greater range of options in dealing with foreign states.For the Europeans, the shale revolution is also largely positive. A greater variety of gas supplies from liquefied natural gas originally destined for the US has been dumped in European markets; by 2020, shale gas in the form of liquefied natural gas is likely to begin arriving in Europe in significant quantities, and there is also the prospect of some domestic shale gas becoming available. Europe will also benefit from the second stage of the shale revolution as oil prices come under pressure.However, American self-sufficiency in oil is of greatest concern to the EU. The danger is that the US will no longer have any direct interest in ensuring supply flows out of the Gulf. At the very least this will mean that Washington is likely to demand greater European investment in its own energy security. One option for the EU is to develop natural gas transportation as an energy security hedge. This would also increase pricing pressure on oil producers.China has even greater incentives to develop its shale gas resources. According to the US Energy Department’s Energy Information Administration, the country’s recoverable resources are larger than those of the US at 36 trillion cubic meters. The main geostrategic reason for Beijing to develop shale gas for transportation is that the US navy controls the Pacific and most Chinese oil arrives by tanker. Large-scale use of natural gas for transportation would protect China from much of the effect of a US blockade.By contrast, the outlook for Russia is not too optimistic. As the decade progresses, shale will be developed worldwide and natural gas infrastructures will be constructed. It is difficult to see how the markets will avoid dropping oil prices. Geopolitically, the shale revolution strengthens the US, reduces China’s energy dependence, generates a major global stimulus, which takes the Western economies off the fiscal rocks.The writer is a professor of law at City Law School, City University, Grays Inn, London. This article has been reproduced from the Khaleej Times