By Fareed Zakaria

In my column in today's Washington Post, I argue that the rise of shale gas is shaping up to be the biggest shift in energy in generations. And its consequences - economic and political - are profoundly beneficial to the United States. Here's an excerpt:

No one could have predicted that oil prices would rise to today’s levels. Saudi Arabia’s oil minister, Ali al-Naimi, says that they are irrationally high, pointing out that world demand is lower than the available supply and that Saudi oil inventories around the world are largely untapped. The “irrational” cause, of course, is fear of a war with Iran. But it would also have been unpredictable that a 47 percent hike in oil prices since November 2010 would not cause a major slowdown in the U.S. economy. One reason it hasn’t might well be the rise of shale gas.

By now, the basic facts are well known. It was only a few years ago that most experts were warning of an imminent shortage of natural gas in the United States. But thanks to the efforts of a small private company, Mitchell Energy, combined with a horizontal drilling procedure called hydraulic fracking, it has become possible to extract vast quantities of natural gas from shale, which this country has in abundance.

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Editor's Note: Michael A. Levi is the Director of the Program on Energy Security and Climate Change at the Council on Foreign Relations where he blogs. This post is part of a CFR Expert Roundup. It is reprinted with permission of the Council on Foreign Relations.

By Michael A. Levi, CFR.org

There is a myth, popular among both politicians and the public, that high oil prices are the greatest economic risk that the United States faces when it comes to energy. They're wrong; wildly changing prices, not high ones per se, are what really do damage. Rapidly rising prices drain consumers' wallets without giving them time to adapt; frequent change also makes long-term investments more difficult. People may applaud when prices crash, but to turn a cliché on its head, what goes down must go up.

Policymakers should focus their responses along two dimensions: steps that blunt intolerable volatility and ones that help consumers cope with the consequences of whatever remains.

Some volatility is natural and quite tolerable. Markets aren't perfect predictors of the future, which means that prices will shift to and fro. Since there's no reason to think that governments would be smarter, they usually shouldn't try to override what the markets do. Moreover, modest volatility can prompt consumers to take steps, like shifting to more fuel-efficient cars that will help them if volatility later explodes. FULL POST

Editor's Note: The following post comes from ThinkProgress, a division of the liberal think tank the Center for American Progress Action Fund, based in Washington, DC.  Joe Romm is a Fellow at American Progress and is the editor of Climate Progress. This post is reprinted with permission. 

By Joe Romm, ThinkProgress

The public understands Obama isn’t to blame for high gasoline prices, as recent polls make clear. Even the Wall Street Journal and Cato Institute agree: “It’s not Obama’s fault that crude oil prices have increased.”

But as the New York Times pointed out Sunday [jn an op-ed], facts don’t stop the GOP:

The issue of gas prices has not only been misunderstood but thoroughly distorted by relentless ideological spin from industry and its political allies, mainly Republican. Hardly a day goes by that some industry cheerleader somewhere — be it Gov. Bobby Jindal of Louisiana or Senator James Inhofe of Oklahoma — does not flay President Obama for driving up oil prices by denying the industry access to oil and gas deposits and imposing ruinous environmental rules. Senator John Barrasso, a Wyoming Republican, said last week that Mr. Obama should be held “fully responsible for what the American public is paying for gasoline.”

The Times put together some great charts using EIA data. They make clear 1) oil prices are set on a global market and 2) the strategy of “Drill, Baby, Drill” adopted by the GOP and President Obama has succeeded at increasing production and decreasing dependency on foreign oil — but it has unsurprisingly failed at affecting global markets. FULL POST

When gas prices are high especially in an election year, the president is going to be blamed. His opponents promise to lower the price and quickly. On Anderson Cooper the other day, I argued that this is pure political pandering. The president can't do much in the short term to affect the price of oil. I discussed this with Anderson Cooper and Stephen Moore, senior economics writer for the Wall Street Journal. Here's a transcript of our discussion:

Anderson Cooper: President Obama spent today attending fund-raisers for his re-election campaign raising more than $5 million. The men who want the president's job were also on the trail ahead of Tuesday's primary in Illinois.  One line of attack picking up considerable steam for the leading Republican candidates is the rising price of gas. They would have you believe that bringing down gas prices is as simple as casting a vote for president.  FULL POST

Hundreds of you have submitted very thoughtful questions for me through Facebook, Twitter and my blog. Over the next few days, I am going to post my text and video responses to some of the most common questions and a few others that caught my eye.

The rising price of oil is the single most serious threat to the global economic recovery, the U.S. economy and President Obama's reelection prospects. Right now, we are beginning to move into a pretty broad-based recovery. Manufacturing is rising for the first time in 25 years. Technology firms are doing very well. Retail is picking up.  The green shoots of the housing recovery are emerging and that's very important because housing has led almost every recovery since World War II. .

But all the while that you have this economic good news, you are beginning to see oil prices rise quite substantially.  They're up about 15 percent over the last few months. And that could put a damper on all this good news. Why is the price of oil rising? FULL POST

Editor's Note: Michael A. Levi is the Director of the Program on Energy Security and Climate Change at the Council on Foreign Relations where he blogs. This post is reprinted with permission of the Council on Foreign Relations.

By Michael A. Levi, CFR.org

Pundits love to talk about how gasoline prices might influence the upcoming presidential election. So it might surprise people to know that political scientists have spent precious little time investigating the relationship between oil and electoral outcomes. The first step in getting our arms around how pain at the pump might play at the ballot box is to pull together some good data.Trevor Houser has done us the favor of delivering just that.

In a new research note published today, Trevor breaks down the gasoline picture state by state, and asks the gas price question three different ways. The first is the obvious one: how do current gas prices vary with political preference? Plotting pump prices against the state-level Partisan Voting Index doesn’t reveal much that’s surprising: blue states see relatively high gasoline prices, red states see lower ones, and purple states are in the middle. When I stare at the chart, though, one interesting thing jumps out. Most purple states have average prices hovering just below four dollars a gallon; if prices rise in the coming months, and the four dollar threshold caries psychological weight, that can’t be good news for the President heading into the summer.

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Editor’s Note: Kathleen Sullivan is an analyst at Ergo, a global intelligence and advisory firm. The article below is based on a report Ergo recently published, entitled The Waning Era of Saudi Oil Dominance. Follow Ergo on Twitter.

By Kathleen Sullivan – Special to CNN

Saudi Arabia has thus far managed to stave off the popular protests that have led to the ouster of four Arab heads of state, chiefly due to its strategic and well-timed disbursements of oil-revenue-funded social giveaways. While so far effective in preserving the status quo, this approach has tied the fate of the monarchy to that of its oil revenues - an increasingly risky linkage.

For decades, Saudi Arabia’s booming oil revenues have been a safe bet in a constantly shifting region.  Proud and longtime holder of the world’s largest proven reserves, highest exports, and most spare capacity, Saudi Arabia maintained an unrivaled position of dominance in global oil markets.  However, a deeper look at Saudi Arabia’s growing domestic pressures and its external challenges reveal signs of decay in the Kingdom’s global oil market dominance, and with it, weakening defenses against a popular uprising. FULL POST

Editor’s Note: This is an edited version of an article from the ‘Oxford Analytica Daily Brief’. Oxford Analytica is a global analysis and advisory firm that draws on a worldwide network of experts to advise its clients on their strategy and performance.

Brent oil today traded near $125.50 per barrel. Slightly down from Friday, this is still almost 15% above the already-high levels recorded a year ago. World average oil prices in euro and pound sterling terms have reached a new all-time high. With the global economy still fragile and OECD monetary policy extremely loose, the consequences for inflation and growth could tip the world back into recession by late 2012. FULL POST

Editor's Note: Be sure to catch GPS every Sunday at 10a.m. and 1p.m. EST. If you miss it, you can buy episodes on iTunes.

By Fareed Zakaria, CNN

The American economy seems to have picked up. The Dow Jones Industrial Average is hovering around 13,000 - the highest since the financial crisis began in May 2008. The NASDAQ is actually at its highest level since the technology bubble burst more than a decade ago. Stock prices aren't everything but data from the economy on the ground is also slowly getting better. Jobless claims are down; housing starts are up. Things do seem to be getting better, slowly but surely.

This is all good news for President Obama because there is a very strong correlation between economic growth and a president's prospects for reelection. The unemployment numbers are still pretty high but they are falling. Also, many models suggest that unemployment is not the crucial statistic to determine whether a President will win reelection.

Most people are employed. It's the rise in per capita GDP - the average person's income rise - that determines whether they feel things are getting better and thus whether they will vote for the incumbent or seek a change.

So does that mean the economy - and the president - are in good shape?

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Editor's Note: R. Nicholas Burns is Professor of the Practice of Diplomacy and International Politics at the Harvard Kennedy School. He served as Undersecretary of State for Political Affairs from 2005 to 2008. Previously, he was U.S. ambassador to NATO. The following piece was originally published at Harvard’s Kennedy School of Government “Power and Policy” blog. 

By R. Nicholas Burns

The Indian government’s ill-advised statement last week that it will continue to purchase oil from Iran is a major setback for the U.S. attempt to isolate the Iranian government over the nuclear issue.

The New York Times reported recently that Indian authorities are actively aiding Indian firms to avoid current sanctions by advising them to pay for Iranian oil in Indian rupees. It may go even further by agreeing to barter deals with Iran – all to circumvent the sanctions regime carefully constructed by the U.S. and its friends and allies. According to the Times, India now has the dubious distinction of being the leading importer of Iranian oil.

This is bitterly disappointing news for those of us who have championed a close relationship with India. And, it represents a real setback in the attempt by the last three American Presidents to establish a close and strategic partnership with successive Indian governments. FULL POST