We've essentially alternated these past several decades between denial and a learned helplessness approach toward OPEC and other unfriendly oil producing countries.
Finally, oil and gas expert Daniel Yergin presents us with considerable grounds for optimism in his editorial America's New Energy Security. He brings lots of useful facts to the table as well.
Yergin points out that some of the more important things we have going for us in oil and gas are the Canadian oil sands, the potential for increased Mexican oil supplies, new onshore "tight oil" and gas developments in the U.S., offshore drilling potential and better conservation policies.
Taken as a whole, these factors provide solid grounds for Americans to be optimistic concerning our future energy independence.
Yergin's editorial says this about U.S. supplies:
"But developments on the supply side are particularly striking. U.S. crude oil output has risen by 18% since 2008. Some of that has come from an increase in deep-water output, although after last year's Deepwater Horizon oil spill the pace of future growth is more uncertain. The big surprise is onshore, where the United States is experiencing an oil boom.
The reason is the sudden appearance of a new source, "tight oil," which is extracted from dense rocks. For years, tight oil has been a very marginal business. In 2000, it was only about 200,000 barrels per day, 3% of total output. Today it is about a million barrels per day. By the end of the decade, according to IHS Cambridge Energy Research Associates' estimate, it could reach three million barrels per day, over half of current domestic crude oil production.
The dramatic increase in tight oil has been made possible by the same technology combo, hydraulic fracturing and horizontal drilling, that created the "shale gale"—the explosive growth in natural gas production from shale rock.
The spread of fracking has generated debate about potential environmental impact, underscoring the need that these resources continue to be developed in a safe and transparent manner. It's vital that we do so, because shale gas now accounts for 34% of total U.S. natural gas output. Just a few years ago the expectation was that the U.S. would be importing large volumes of natural gas and becoming heavily dependent on world markets—and spending upward of $100 billion a year for those imports. Now people, including President Obama, talk about a hundred-year supply of domestic natural gas. Shale gas has also proved to be a job creator—over 600,000 jobs, according to the IHS Global Insight study released last week."
Next we're provided these friendly facts about the growing percentage of our energy supplies that could come from neighbors and allies:
"There are other changes in the world oil supply that can work in our favor. Many Americans have the impression that most U.S. oil imports come from the Persian Gulf region, or from hostile states. And it is true enough that Venezuela's Hugo Chávez, for instance, hardly hides his deep-seated enmity toward the U.S.
But the Persian Gulf represents 16% of our imports, and Venezuela 9%. By far the largest, and growing, source of imports is Canada, which supplies about 25%; Mexico is second, at 11%.
The main reason for Canada's large role is the expansion of output from its oil sands. Canada's oil sands now yield more output than Libya's total exports prior to its civil war. Current plans could double production to three million barrels per day by the beginning of the next decade. That would mean a higher share of our imports coming from our friendly neighbor and largest trading partner.
But how much more oil the U.S. imports from Canada will depend upon whether sufficient transportation exists. And in response to the State Department's postponement of the decision on the Keystone XL pipeline last month, the Canadian government has indicated that it cannot be wholly dependent on the vagaries of U.S. politics. The pipeline delay, said Prime Minister Stephen Harper, underscores "the necessity of making sure that we're able to access Asian markets for our energy products."
What he means is shipping some of the growing oil sands output west to the Pacific and on to Asia and particularly to China. Chinese companies, seeking to diversify their sources of supply, have already invested over $10 billion in Canada's oil sands."
So what can we do about achieving greater energy independence? Well, let's remember that this is America. We can do the impossible when we're so inclined, focused and when we're all together as a country.
As evidence how about this? We did the impossible when we were able to land a man on the moon in 1969. We were able to accomplish this amazing feat, however, only after President Kennedy made the then totally unrealistic request on May 25, 1961 that we commit as a nation to landing a man on the moon by the end of that decade.
Kennedy also said in that speech that if we weren't prepared to totally commit to such an undertaking, that we shouldn't even try. Well, we did so commit and the rest is history. On our behalf, Neil Armstrong made that small step for man and giant leap for mankind on July 20, 1969.
Another example of the if you can dream it, you can do it approach to life.
What if we made such an all-in outlandish American pledge today to achieve North American energy independence by the end of this decade? And what if we did this together as North Americans, one and all, instead of postponing the Keystone XL pipeline decision, drilling in the Gulf, conservation and such?
What if we even announced another $1 or even $2 per gallon revenue producing and energy conserving tax on gasoline consumption and the like, all to support our all-out North American drive toward energy independence?
Of course, we're not doing anything close to that today. Instead we're debating temporarily extending social security tax breaks in the U.S. and linking that to approving the Keystone XL pipeline construction in the form of a political tradeoff between the Democrats and Republicans.
We need the pipeline and can't afford the tax reduction. We can't even afford to provide the currently scheduled social security benefits with the current taxes in place, let alone reducing payroll taxes.
And we sure can't afford to continue to import oil that we could instead provide ourselves. Politics sucks.
Here are a few more stubborn facts. We simply can't afford to continue social security benefits as they are without agreeing to a huge increase in taxation. So if having a welfare state is so important to us, then let's at least start paying for it instead of pretending that reducing payroll taxes temporarily will magically get us out of our economic mess.
Let's all try to remember the first rule of getting out of a hole; stop digging.
Following election year politics won't cause strong economic growth, and without solid economic growth jobs won't return anytime soon. Without job growth, there won't be additional tax receipts, and our nation's ongoing deficits and debts will continue to make us weaker as a nation.
And if we don't work feverishly toward achieving more energy independence, both our future national security and economic independence will be at greater risk.
If that happens, we'll continue to follow Europe down the road to nowhere, and have unnecessarily high unemployment, deficits and debts as a result.
Yergin makes it clear, at least to me, that we have a great opportunity to make things a whole lot better for ourselves, and soon, but we first need to get our politicians to step up to bat as Americans. The clock's ticking.
Thanks. Bob.
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