After the election, many of us are looking for some good news. Any good news.
In fact, there is some. And it’s significant.
Unlikely as it may seem, our country is very close to energy independence.
With oil production up and rising, the U.S. is on track to overtake Saudi Arabia as the world’s biggest producer, a remarkable achievement. The Energy Department estimates U.S. oil production will hit 11.4 million barrels a day next year — compared with 11.6 in Saudi Arabia — and will reach 13-15 million barrels a day by 2020.
High prices for crude along with new technology — hydrolytic fracturing or “fracking” and horizontal drilling — are responsible for the surge.
Much of the new action has been in North Dakota, Texas, Oklahoma and Montana, where one million new jobs have been added since 2008.
The second half of the good news is the boom in gas production. Natural gas — mostly methane and some ethane — is an efficient and clean fuel with relatively low carbon emissions.
A recent study by Standard & Poor’s puts gas reserves in the Marcellus Shale alone at an astonishing 330 trillion cubic feet. And the Marcellus, underlying parts of Pennsylvania, West Virginia, New York and Ohio, is only one of five major gas fields in the country.
Economists at Citigroup say hydrocarbon production — oil and natural gas — will create up to 3.6 million new jobs by 2020 and lift U.S. economic output by 2-3% per year.
And there are collateral benefits.
- – Reduced reliance on foreign oil helps our balance of payments. This year, our oil and gas import bill will drop by almost $175 billion. Not bad.
- – Cheap natural gas has been a boon to energy-intensive industries. Metals manufacture and fertilizer production are expanding.
- – The chemical industry has also benefited. In Texas and Pennsylvania, chemical plants that convert ethane to ethylene, a plastic intermediate, are being built next to gas fields.
- – Cleanup of water recovered from “fracking” has boosted the water-treatment business. A portion of the water injected in fracking operations returns to the surface and must be treated before disposal or reuse.
What about the big picture? As a nation, we get some critical benefits.
Energy independence will free us from reliance on terrorist regimes. No more groveling to the sheiks. We should never be held hostage for Middle Eastern oil.
And it buys time while we develop renewable sources. That may take a while.
Wind and solar are still highly reliant on taxpayer subsidies. Economical biofuels await cheap, fermentable carbohydrates. Engineering breakthroughs are needed for inexpensive battery power. And geothermal and hydroelectric energy are limited by geography.
No question, hydrocarbon fuel is the best game in town. We have lots of it, and there’s much more to come. Good news, indeed!