Surging U.S. Energy: ‘We Have a Chance of a Lifetime’

Mark Green
Posted May 14, 2014

A couple of charts from energy/economics blogger Mark J. Perry really show the fundamental rewriting of the United States’ energy narrative – as a result of surging domestic oil and natural gas production. Both charts, developed from data in the U.S. Energy Information Administration’s (EIA) annual energy outlook, indicate that the U.S. is rapidly moving toward energy self-sufficiency – the point at which domestic output lowers net imports to zero.

The first illustrates the way U.S. crude production was in steady decline until the shale revolution started registering:

You can see that development of crude from shale and other tight-rock formations, through advanced hydraulic fracturing and horizontal drilling, launched nearly vertical growth in production. Last week it reached nearly 8.43 million barrels per day (mbd), the most since October 1986.

EIA projects U.S. output will average 8.5 mbd this year and 9.2 mbd in 2015 – which would be the highest annual average since 1972.

The numbers mean growing U.S. self-sufficiency – we’re producing more of the energy we use here at home, reducing imports and making America more energy secure. Perry’s second chart:

This chart is nearly the inverse of the first one, showing a steady rise in imports until the shale energy revolution kicked in, dropping imports in the first quarter of this year to 28.4 percent – the lowest level since 1985, Perry writes. Bloomberg Businessweek reports:

The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S., including the Bakken in North Dakota and the Eagle Ford in Texas. “This is an incredible phenomena that looks set to continue,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “There’s a long way to go before we explore and exploit all of the shale deposits out there.”

At Politico’s “Great Energy Debate” event earlier this week, API President and CEO Jack Gerard framed this American energy renaissance as one that Americans must choose to harness:  

“We believe it’s that fundamental – for not only will we get great opportunity to create new jobs in the country, put people back to work producing our energy, but today in the geopolitical considerations around the world we have the ability to alter that by exerting our influence. … We have a chance of a lifetime.”

With safe and responsible energy development, employing cutting-edge technologies to increase efficiency while protecting the environment, the United States can realize the benefits that a robust, growing industry can supply while increasing its security and global energy influence.