Remember a few years ago when the United States was heavily dependent on foreign oil and experts were telling us we’d be a slave to OPEC forever?
I remember it well. We fought wars for oil, undermined unfriendly governments for oil, but in the end, we were at the mercy of others for our oil supply. Our economy was held hostage by OPEC, as even a small change in the price of oil would send markets reeling and slow economic growth.
But in September, that all pretty much ended. For the first time since records were kept beginning in 1949, the United States became a net exporter of oil.
“The U.S. return to being a net exporter serves to remind how the oil industry can deliver surprises — in this case, the shale oil revolution – that upend global oil prices, production, and trade flows,” said Bob McNally, a former energy adviser to President George W. Bush and president of the consulting firm Rapidan Energy Group.
Soaring output from shale deposits led by the Permian Basin of West Texas and New Mexico has been in main driver of the transition — but America’s status as a net exporter may be fragile. Many Texas wildcatters are predicting a rapid decline in production growth next year, while some Democratic contenders for the White House have called for a ban on fracking — the controversial drilling technique that unleashed the boom.
“In the days of Jimmy Carter and even Ronald Reagan, we would have longed for this day,” said Jim Lucier, managing director of Washington, D.C.-based Capital Alpha Partners LLC. “Now we scarcely notice it at all.”
It’s true. There were no parades or speeches marking the celebration of our energy independence. Part of that, I’m sure, is that we still import a sizable portion of some refined oil products as well as some crude oil.
But could it also be that the naysayers, the doomsday predictors, the “peak oil” movement, and those “experts” who believed the American energy sector would never rise again were s wrong they’re embarrassed to be reminded of it?
Analysts at Rystad Energy said this week the U.S. is only months away from achieving energy independence, citing surging oil and gas output as well as the growth of renewables.
“Going forward, the United States will be energy independent on a monthly basis, and by 2030 total primary energy production will outpace primary energy demand by about 30%,” said Sindre Knutsson, vice president of Rystad Energy’s gas markets team.
In 1972, the global think tank Club of Rome published “Limits of Growth” which predicted economic collapse before the new millennium and notably, that oil reserves would be depleted by 1990. Today, there are approximately 1.73 trillion barrels of oil in the world’s reserves with more being discovered every year. This is enough to last 50 years. And that’s not taking into account alternative energy sources and efficiencies that would save us millions of barrels a year.
Why we keep listening to these fools is a mystery. They’ve been predicting the end of the United States for 200 years and somehow, we keep going. What seems like a miracle is actually the simple process of markets working their magic and human ingenuity doing the rest.
And those are things that the “experts” never take into account.