The world was reinvented in the 1970s by soaring oil prices and massive transfers of national wealth. It could be again if the price of petroleum crashes -- a real possibility given the amazing estimates about the new gas and oil reserves on the North American continent. The Canadian tar sands, deepwater exploration in the Gulf of Mexico, horizontal drilling off the eastern and western American coastlines, fracking in once-untapped sites in North Dakota, and new pipelines from Alaska and Canada could within a decade double North American gas and oil production.
Given that North America in general and the United States in particular might soon be completely autonomous in natural gas production and within a decade without much need of imported oil, life as we have known it for nearly the last half-century would change radically.
Take the Middle East. The United States currently devotes about $50 billion of its military budget to patrolling the Persian Gulf and stationing thousands of troops in the region.
America was the target of a crippling oil embargo following the 1973 Yom Kippur War. Ever since, it has often hedged its support of democratic Israel in fear of oil cutoffs or price hikes from the Middle East. Just as often, the United States finds itself hypocritically calling for democracy while supporting medieval sheikdoms and monarchies in the oil-exporting gulf. Likewise, Western petrodollars seem to find a way into the coffers of terrorists bent on killing Americans and their allies.
But at a time of shrinking defense budgets, an oil-rich America might not need to protect Middle Eastern oil fields and lanes. U.S. foreign policy for once really could be predicated on the principle of supporting those nations that embrace constitutional government and human rights, without worry that offended dictators, theocrats and kings would turn off the spigots.
Curbing the voracious American appetite for imported oil could also help lower world petroleum prices for everyone. Poorer nations in Africa, Asia and Latin America would save billions of dollars on their imported-energy bills.