THE ABSENT SUPERPOWER

Peter Zeihan

Subtitle: The Shale Revolution and A World Without America, Zeihan on Geopolitics, Austin, TX., 2016, footnotes, maps, charts

Reviewer comment
This is the second of three books by Peter Zeihan developing and elaborating on the same set of ideas. The author has three interrelated themes. One is that the political/economic (geopolitical) world since 1944 has been a result of the "Breton Woods' agreement that established the monetary system and rules for international commerce under American protection and control, but that the U.S. is now declining to continue as the world's 'police man' and this will result in a period of chaos.

The second is that this American desire is being aided by the remarkable expansion of its world position in the production of energy - oil and natural gas - as a result of dramatic technological ability to extract those from previously unsuitable shale rock formations.

The third is the shifting demographic changes in each country which determine the capability of the society to meet its financial challenges. In addition, he discusses several related variables that will influence the coming conditions, one of these is the cost of transportation. The first in the series - The Accidental Superpower - was published in 2014. The third - Disunited Nations - was published in 2020. Thus, the three also include some repetitive information but they also constitute an expansion as each expands on its predecessors.
Throughout all three books the author provides very numerous maps, charts, diagrams which greatly enhance the readers' understanding. And now he has published on-line a reference site that contains many of these in full color that was not possible in the printed versions.

This book was published in 2016, soon after the first Saudi oil price war in 2015 in which they attempted to bankrupt the American shale oil producers and retain their dominant world position in oil production and pricing. In this book the author devotes much attention to the technical and financial details of shale oil production. The U.S. government did not react sufficiently to this Saudi aggression.

Now, in 2020 we are in another Saudi oil price war and aided by Russia as well. And, again, this time the American government is not reacting - it should be placing high tarrifs on Saudi and Russian oil plus withdrawing American military protection to Saudia Arabia. Already in 2020 Amerian shale production is being curtailed and small companies are going bankrupt due to the oil war plus an unexpected virus attack. Chevron and Exxon are reducing investment.

I add a list of references related to the three books. Some of these agree with Mr. Zeihan and some disagree - especially on the future power (or lack of it) of China.

Introduction

Part I: Shale New World

These three chapters contain more technical and financial information about how the whole shale industry functions than I have read in many other references combined.

Chapter I The First Shale Revolution
Mr. Zeihan begins by answering the question - "What is petroleum?"

Shale Rocks
This is a clear description with a map of the Eagle Ford as an illustration and a chart that describes 6 different Hydrocarbons..

Chapter 2 The Second Shale Revolution

The topic here is the great expansion of oil production from shale since the 2014 publication of Mr. Zeihan's book Superpower. This production caused Saudi Arabia to attempt to bankrupt the producers by driving down the world price of oil in 2015.

Surviving the Plunge The author describes the shale oil producers reaction to the Saudi price war.
1 Contract creativity
2 Crunching margins
3 Geographic consolidation
4 Selective delays
5 Technological adaption

Reduce, Reuse, Recycle
This section is about the use of water in the oil extraction process and methods to reduce its volume. The section contains much technical information.

Combine, Consolidate and Extend
More technical detail

The Micro-Seismic Revolution
This is detail at an even more technical level.

Branching Out
In this section the author includes 4 large Graphic pictures to depict
- Basic Horizontal Drilling in 2004
- Advanced Horizontal Drilling in 2011
- Pad Drilling in 2014
- and Multilateral drilling in 2016.

Are you sufficiently Stimulated?
This is about the fact that oil wells - especially fracked wells - do produce less and less oil over time. And he discusses some of the methods for renewing oil production from these wells.

Shale's Next Stage
The section contains a large graphic to depict the 'Full cycle Break-even Oil Prices for producers in several countries. The Saudi's had the lowest such price - between 30 and 40 dollars a barrel - OPEC average was about 42 dollars a barrel - US shale was near 90 dollars in 2012 - but down to around 41 dollars by 2017.

The Other Side of Shale

Chapter 3 The Third Shale Revolution

Chapter 4 Energy with an American Accent

Part II: The Disorder

Chapter 5 The End of the (Old) World

The readers might be encouraged by the author's first sentence. "The United States is the most powerful country in history and will remain so until long after our grandchildren are gone."

Chapter 6 The Twilight War

Chapter 7 The (Next) Gulf War

Chapter 8 The Tanker War

Chapter 9 The Sweet Sixteen

Chapter 10 It's a Supermajor World

Part III: The American Play

Chapter 11 Tools of the Trade

Chapter 12 Dollar Diplomacy in Southeast Asia

Conclusion

Appendix I Shale and the Changing Face of Climate Change

Appendix II Other Shale Concerns

Appendix III Oil and Natural Gas Data

Some References

Strategy - Link to a directory listing of significnt books and articles on Strategy

Thomas Kuhn - The Structure of Scientific Revolutions

Lawrence H. White - The Clash of Economic Ideas

Peter Zeihan - The Accidental Superpower

Peter Zeihan - Disunited Nations: The Scramble for Power in an Ungoverned World

Geoffrey Parker - Global Crisis: War, Climate Change and Catastrophe in the Seventeenth Century Historical study for comparison to the present.

William Rosen -The Third Horseman: Climate Change and the Great Famine of the 14th Century

David Hackett Fischer - The Great Wave: Price Revolutions and the Rhythm of History

Philip Bobbitt - Shield of Achilles: War, Peace, and the Course of History

Glen Hubbard and Tim Kane - The Economics of Great Powers Balance from Ancient Rome to Modern America

Mark Skousen - The Structure of Production

Harry S. Dent Jr. - The Demographic Cliff

William Strass and Neil Howe - The Fourth Turning Develops a theory relating generations to changing social-political- economic beliefs and actions.

Robert Kaplan - The Revenge of Geography

Philip Tetlock and Dan Gardner - Superforecasting: The Art and Science of Prediction

Marcia C. Kuropovna - Russia, China, and Geopolitics of Silk Road

Peter Frankopan - The Silk Roads: A New History of the World Describes Chinese efforts to build foreign trade over land and obtain economic power via allies as an alternative to its vulnerable ocean shipping.

Robert D. Blackwell & Jennifer M. Harris - War by Other Means: Geoeonomics and Statecraft Chapters 4 -5 on China and 8 on energy

Robert Spalding - Stealth War: How China Took over While America's Elite Slept Describes Chinese expansion of political, military power.

Michael Pillsbury - The Hundred-Year Marathon: China's Secret Strategy to Replace America and the Global Superpower

Bill Gertz - Deceiving the Sky: Inside Communist China's Drive for Global Supremacy Focus mainly on military power

Tom L. McKnight - Physical Geography Detailed technical study of such elements as climate, topography, soil, water, maps.

Vernon C. Finch & Glenn T. Trewartha - Elements of Grography especially strong on study of climate zones, landforms, soil, vegetation, oceans and rivers.

J. C. Wylie - Military Strategy: A General Theory of Power Control

Andrew R. Wilson - Understading Imperial China

Charles and Louis-Vincent Gave=- Clash of Empires

Louis-Vincent Gave - New World Order Will Have China on Top

Jonathan D. T. Ward - China's Vision of Victory