Mid-last month, the US Energy Information Administration (EIA) released a study that advanced five scenarios regarding the impact of shale oil on the United States. The most optimistic scenario suggests that the United States may become an oil-exporting nation by 2035, with exports commencing early next decade. In spite of everything published about this topic, the EIA remains the pre-eminent research institution of its kind in America, adding credibility to its input in an issue that still carries many ambiguities. Earlier this month, the EIA predicted that US crude oil output would increase to about 8.17 million barrels per day in 2014 with growing production of shale oil. This marks the first time US oil output crosses the threshold of 8 million barrels per day since 1988. President Barack Obama has voiced his support for the construction of gas liquefaction plants for export, and spoke publicly about the role of new energy production in national security policy. Last week, at a speech he gave in Costa Rica, Obama said that he is in the process of making a decision over exporting liquefied gas or otherwise, and said, “I can assure you that once I make that decision, then factoring in how we can use this to facilitate lower costs in the hemisphere and in Central America will be on my agenda." In other words, US gas prices will be lower than those of international gas exports, because of the way gas prices are compared to those of similar alternative sources available in the United States. This means that the cost of industrial production will decrease in importing countries. The available data indicates that shale oil reserves in the United States are about 200 billion barrels, in addition to shale gas reserves. This is while bearing in mind that exploration operations are expanding. According to the London-based Financial Times, the decision to approve the construction of liquefied natural gas (LNG) plants in the United States, though the jurisdiction of the Department of Energy, is the subject of debate at the highest levels in the White House. For one thing, US officials believe that US energy exports will create new geopolitical opportunities for Washington. Tom Donilon, the US National Security Advisor, touched on the importance of shale oil in US geopolitical calculations, and reviewed the impact of US energy policy and how Washington began using the new energy resources in its foreign policy two years ago, particularly in the Middle East. Donilon said, “America's new energy posture allows us to engage from a position of greater strength. Increasing U.S. energy supplies act as a cushion that helps reduce our vulnerability to global supply disruptions and price shocks. It also affords us a stronger hand in pursuing and implementing our international security goals. “For example, the United States is engaged in a dual-track strategy that marshals pressure on Iran in pursuit of constructive engagement to address the world's concerns about Iran's nuclear program. As part of the pressure track, the United States engaged in tireless diplomacy to persuade consuming nations to end or significantly reduce their consumption of Iranian oil while emphasizing to suppliers the importance of keeping the world oil market stable and well supplied. The substantial increase in oil production in the United States and elsewhere meant that international sanctions and U.S. and allied efforts could remove over 1 million barrels per day of Iranian oil while minimizing the burdens on the rest of the world. And the same dynamic was at work in Libya in 2011 and in Syria today." Donilon placed special emphasis on developing “a more global natural gas market," which he said benefits the United States and its allies. This means following low gas price equations throughout the world, that is, equations similar to those in place in the United States where local gas prices are compared against similar gas prices, instead of price equations used in Europe, where imported gas price is compared to petroleum product prices, or in Asia where it is set against crude oil. Since crude oil prices are high at present, above the $100 mark, gas prices set against crude prices are also high. In the United States, the price of gas is about $4 per one million BTU, and is $8 in Europe and up to $12 in some Asian countries. But the puzzling question here, which Mr. Donilon did not address, is this: why would the United States want to lower the cost of industrial production in other countries (even allied countries), as this would only increase competition with US exported goods? It may even render the latter more costly as the cost of labor in the United States is higher than other countries. Donilon also spoke about other advantages of increasing non-conventional oil production in the United States, and the role of increased shale gas production in securing large quantities of this fuel to US manufacturing. He said that about $95 billion has been invested in the construction of new factories, in sectors that rely heavily on gas, to take advantage of low gas prices. These sectors include the chemical, petrochemical, iron and steel, and glass industries. He also stressed that the United States is exporting rather than importing petroleum products, for the first time in six decades. *. Mr. Khadduri is a consultant for MEES Oil & Gas (MeesEnergy)