Tapping Shale Reserves, US Would Become World's Top Oil Producer By 2017

Hugh Pickens writes "The NY Times reports that according to a report by the International Energy Agency, the U.S. will overtake Saudi Arabia as the world's leading oil producer by about 2017, will become a net oil exporter by 2030, and will become 'all but self-sufficient' in meeting its energy needs in about two decades — a 'dramatic reversal of the trend' in most developed countries. 'The foundations of the global energy systems are shifting,' says Fatih Birol, chief economist at the Paris-based organization, which produces the annual World Energy Outlook. There are several components of the sudden shift in the world's energy supply, but the prime mover is a resurgence of oil and gas production in the United States, particularly the unlocking of new reserves of oil and gas found in shale rock. The widespread adoption of techniques like hydraulic fracturing and horizontal drilling has made those reserves much more accessible, and in the case of natural gas, resulted in a vast glut that has sent prices plunging. The agency's report was generally 'good news' for the United States says Michael A. Levi, senior fellow for energy and environment at the Council on Foreign Relations, because it highlights the nation's new sources of energy but Levi cautions that being self-sufficient does not mean that the country will be insulated from seesawing energy prices, since those oil prices are set by global markets. The message is more sobering for the planet, in terms of climate change. Although natural gas is frequently promoted for being relatively low in carbon emissions compared to oil or coal, the new global energy market could make it harder to prevent dangerous levels of warming (PDF). 'The report confirms that, given the current policies, we will blow past every safe target for emissions,' says Levi. 'This should put to rest the idea that the boom in natural gas will save us from that.'" The folks over at The Oil Drum aren't quite so optimistic: shale reserves may have an abysmal EROI. And, of course, Global Warming is a liberal myth.

Comments

Gas is still affordable so far

[concealment]

Thanks to the Iraq war, Canadian oil sands, and now the vast reserves of the USA, gas is more expensive but still affordable.

If it suddenly doubled in price, our economy might collapse.

Is it time for us to admit that petrochemical energy is a strategic objective worth considering? I don't like the idea of "wars for oil" any more than you probably do, but if we don't, a lot of people will suffer and have their livelihoods destroyed.

With these wars, the world can have a consistent oil supply at a reasonable-ish price.

Moral uncertainty has arrived. It feels bad. And yet, for now, it makes sense.

* - I don't believe Iraq was about oil per se. It was about keeping the middle east under open market control in order to counter the Russian oil supply, which otherwise would control Europe financially, putting it in the hands of the US's and Europe's traditional opposition. In addition, Iraq was about the principle that if someone hits you hard and hides behind any nation, hit the biggest bad guy who might support them and destroy his ability to protect them, which will make others think twice about supporting them.