BOOM: Fracking is Turning the U.S. into a Bigger Oil Producer than Saudi ArabiaPosted: March 13, 2014
The expansion in volumes of oil and gas produced by hydraulic fracturing is taking experts and politicians by surprise, with profound consequences for US geopolitics, and even Europe’s reliance on Russian gas
TEXAS: For The Independent, David Usborne reports: Hector Gallegos sits in the cab of his pick-up enjoying a few hours of calm. A day earlier, workers finished carting off the huge rig that had drilled three new wells beneath this small patch of south Texas farmland and he’s now getting ready to prime them for production. He reckons that about three weeks from now each will be producing 1,000 to 2,000 barrels a day. “That’s money!” he exclaims with a broad smile.
“The United States is now poised to become an energy superpower.”
— Meghan O’Sullivan, Foreign Affair magazine
It’s also power, and not in the combustion sense. Thanks to the success of engineers like Mr Gallegos in pushing the frontiers of hydraulic fracturing, or “fracking”, to access reserves of oil trapped in shale formations, notably here in Texas and North Dakota, America is poised to displace Saudi Arabia as the world’s top producer. With that could come a hobbling of Opec and unforeseen shifts in US foreign policy.
“We keep raising our forecasts, and we keep underestimating production.”
— Lejla Alic, an analyst with the International Energy Agency
So rapid has been the change in its energy fortunes that even some experts, as well as policy-makers in Washington, are struggling to keep up. Nor are we just talking oil. So much natural gas is being released by the shale also that for now outlandish quantities of it are simply being burned off into the atmosphere.
Even predicting future oil output isn’t the precise science you’d expect.“We keep raising our forecasts, and we keep underestimating production,” Lejla Alic, an analyst with the International Energy Agency noted recently. Last year US production reached 7.4 million barrels a day, an increase over 2012 of 15.3 per cent. A jump that large hasn’t been seen since 1951. This year the US should produce 8.3 million barrels a day.
Take another indicator – the volumes of crude being moved by trains, often a mile long, from the shale fields to refineries and terminals. In all of 2008, train companies moved 9,500 wagons of the black stuff. Last year, 400,000 of them rumbled across America.
How long America’s shale boom will last is hard to forecast also. In Texas, which on its own is set to increase production to 4 million barrels a day this year, the drilling peak still hasn’t been reached, says Mr Gallegos. But, he suggests, “in the end it’s not the oil fields or the wells that will determine where all this goes. It’s the politicians around the world who set the price and make the markets.” Increasingly, the decisions that matter will rest with the US, as it adjusts to its new status as a glut producer.
“The United States is now poised to become an energy superpower,” write By Robert D. Blackwill and Meghan O’Sullivan, in the current issue of Foreign Affair smagazine.
The consequences are likely to be far-reaching, notably affording Washington a chance it hasn’t had since the energy crisis of the early 1970s to reassess its relationships with those countries, often ruled by unappetising despotic governments – Saudi Arabia included – on which America has had to depend for so long to feed its fossil fuel needs.
“Since 1971, when US oil production peaked, energy has been construed as a strategic liability for the country, with its ever-growing thirst for reasonably priced fossil fuels sometimes necessitating incongruous alliances and complex obligations abroad,” they write. “That logic has been upended, and the newly unlocked energy is set to boost the US economy and grant Washington newfound leverage around the world.”
Among the determinations Washington must make is whether to overturn a federal law, also dating back to the early ‘70s, that forbids US companies from exporting crude in all but a few circumstances. Full energy independence may still be many years away, but proponents of ending the ban argue it would not only further boost the US economy – fracking added 0.3 per cent to GDP growth last year – but also help America mitigate or even end Opec’s market influence and lessen Russia’s leverage also…Read the rest>>>
- Boom: Fracking innovations are leading to more efficiency, less methane (hotair.com)
- United States may be close to reaching energy ‘self-sufficiency’ (dailycaller.com)
- Vladimir Putin not a huge fan of fracking, the shale boom (hint: it’s not because of the environment) (hotair.com)
- Oil-rich Saudi prince sees fracking as a danger to his country (dailycaller.com)
- Thanks to Fracking, U.S. Will Pass Saudi Arabia In Oil Production (thenewamerican.com)