Drill, baby, drill. We've heard of America's natural gas bounty realized by extensive fracking. Overlooked, however, is the success of fracking in U.S. oil production. The Associated Press reports the United States may soon become the world's top oil producer.
U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world's biggest producer.
Driven by high prices and new drilling methods, U.S. production of
crude and other liquid hydrocarbons is on track to rise 7 percent this
year to an average of 10.9 million barrels per day. This will be the
fourth straight year of crude increases and the biggest single-year gain
The boom has surprised even the experts.
...The United States will still need to import lots of oil in the years
ahead. Americans use 18.7 million barrels per day. But thanks to the
growth in domestic production and the improving fuel efficiency of the
nation's cars and trucks, imports could fall by half by the end of the
...The major factor driving domestic production higher is a newfound
ability to squeeze oil out of rock once thought too difficult and
expensive to tap. Drillers have learned to drill horizontally into long,
thin seams of shale and other rock that holds oil, instead of searching
for rare underground pools of hydrocarbons that have accumulated over
millions of years.
Two things seem likely from America's petroleum bonanza. With a declining dependence on imported oil there'll be less pressure on American governments to move toward alternative energy. And that same declining dependence on imported oil will (probably already has) sent alarm bells ringing from the Prime Minister's Office to the Alberta legislature, increase pressure to push the Northern Gateway through and up the chances of a showdown between Ottawa and British Columbia.
These technologies are being employed by multinational companies. I expect this will spread worldwide fairly quickly, producing a considerable increase in world crude production, at least for a while. The impact on world prices could be significant--peak effectively put off yet again.
Basically, at this rate renewables aren't going to take over until the ongoing cost reductions make them definitively cheaper than fossil fuels. Which will happen, just not as fast as we'd like.
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