AUSTIN, Texas—The unconventional oil and gas revolution, which has moved the U.S. from being primarily an oil consumer to both producer and consumer, will shape global events for decades as oil scarcity gives way to relative oil abundance, said Ken Hersh, CEO of NGP Energy Capital Management.

“The impact of the lower 48 oil and gas revolution is, and will be, the single most defining aspect on this planet today that will shape the next 50 years,” according to Hersh, speaking to attendees of the Energy Capital Conference held by Hart Energy in Austin, Texas. Much of what is happening geopolitically and economically today is rooted in the U.S. transition from being predominately an oil consumer to a new role as both producer and consumer, he said.

Describing the transition as a “paradigm shift,” Hersh said world politics were now re-orienting away from a concept of “resource scarcity” and toward “resource abundance.”

The emphasis on security of supply under which Saudi Arabia and Kuwait, for example, enjoyed the special protection of the U.S. defense umbrella is fading. “Even though we may have disagreed with their internal politics,” said Hersh, “we needed the security of supply.”

In the world of the producer that previously prevailed, consumers were “insecure,” said Hersh, because “we had the weak hand.” The goal was “stability almost at all cost,” with the U.S. taxpayer effectively subsidizing global oil prices through defense spending because we “wanted stability in the Middle East, regardless of the politics,” he said. “Stability was our mantra.”

Hersh offered numerous examples of how the transition from a “world of scarcity to that of abundance” has resulted in major energy importers recently becoming “more emboldened.”

Germany, for instance, has limited the amount of natural gas supplies from Russia to 30%.The European Commission has opened an investigation into whether the Russian natural gas producer Gazprom might be hindering competition in central and eastern European gas markets in breach of European Union antitrust rules, Hersh said.

“Who has the balance of power in that equation? The consumer is now feeling a little bit stronger. And he’s feeling that way for a reason,” Hersh said.

Another example cited by Hersh was the Ukraine’s ability to strike a deal with Russia late last year—even as the two countries were fighting—to secure winter natural gas supplies at a price of $2.84 per million British Thermal Units, a level “lower than the posted price in Germany.” And Lithuania opened up a liquefied natural gas (LNG) import terminal to supply the Baltic market, benefiting from LNG supplies from Qatar that came available in the wake of the resurgence in U.S. natural gas production.

“Now Europe is not starved for gas any more from Russia,” said Hersh. “They have a lot more opportunities, and as consumers they are emboldened.”

And the tables have turned for producers as well, Hersh said.

“Today, the producers themselves are starting to feel like they have the weaker hand,” he said, citing a “stunning” 20-year supply agreement between Russia and China last year. Terms call for Russia to supply natural gas “at a price below which they are selling gas to Germany and to flow through a pipeline Russia has yet to build,

“A $55 billion pipeline is going to be built to sell gas at a low price. That shows you the weak hand that Russia has,” he said.

According to Hersh, the transition from scarcity to abundance and from weak to strong can have deep geopolitical impacts.

In the Middle East, for example, the U.S. is currently “trying to figure out its governing principle,” said Hersh, noting that stability may no longer be the guiding principle as to possible U.S. involvement. “We’re more able to sit back and let the two sides sort it out. That’s what’s happening in Yemen right now, and that’s what’s happening in Syria.”

Hersh noted changing trade flows and alliances may also be significant. China is the largest investor in Iraq, while Russia is increasingly drawn to China and the Middle East. However, the Middle East tends to be less drawn to the U.S., he said, “specifically because of our lower need for their hydrocarbons.”

Domestically, U.S. policy is “confused,” Hersh said. For years, it was “easy to hate Big Oil,” he said, but now as many as 32 states are to varying degrees producers of oil and gas. And the unconventional oil revolution “wasn’t brought to you by Big Oil,” he noted. “It’s a direct result of the ingenuity and creativity of the American independent oil and gas producers.”

As for the crude export debate, Hersh said “the U.S. is living in the past with our export restrictions. That’s a holdover from our scarcity mentality that we had in the 1970s, and we have yet to re-adjust to the abundance mentality.” Hersh commended the E&P industry for having seized an opportunity that “has absolutely changed the world. And don’t keep your head in the sand. It’s going to keep changing.”