U.S. Will Pass Saudia Arabia in Oil Production by Decade's End or Before

How about the U.S. energy indpendence story? We're going to be the biggest producer soon, and that's good news for the trifecta of (1) national security, (2) economic growth and (3) consumer purchasing power.

That's the power of free markets and the problem with government controlled monopolies.

U.S. set to overtake Saudi in oil output: IEA has the details:

"A shale oil boom means the U.S. will overtake Saudi Arabia as the world's largest oil producer by 2020, a radical shift that could profoundly transform not just the world's energy supplies, but also its geopolitics, the International Energy Agency said Monday. . . . the global energy map, "is being redrawn by the resurgence in oil and gas production in the United States."

The assessment is in stark contrast with last year, when it envisioned Russia and Saudi Arabia vying for the top position.

"By around 2020, the United States is projected to become the largest global oil producer" and overtake Saudi Arabia for a time, the agency said. "The result is a continued fall in U.S. oil imports (currently at 20% of its needs) to the extent that North America becomes a net oil exporter around 2030."

This major shift will be driven by the faster-than-expected development of hydrocarbon resources locked in shale and other tight rock that have just started to be unlocked by a new combination of technologies called hydraulic fracturing. . . .

The group said the U.S. would import less than 2 million barrels a day in 2035, almost three-quarters less than it does today. That's not to say OPEC's role will be marginalized globally. The group's share of global production will increase from 42% today to 50% in 2035, with much of it going to Asia, according to the IEA. . . .

"It accelerates the switch in direction of international oil trade towards Asia, putting a focus on the security of the strategic routes that bring Middle East oil to Asian markets," it said. Some in the U.S. are already questioning the reasons for keeping U.S. warships in the Persian Gulf. . . .

The IEA also warned that the emergence of shale gas as a game changer in global energy has a downside risk, contributing to increased competition for water resources needed for energy projects.

Shale oil and gas are extracted by pumping water, sand and chemicals into the ground at high pressure to crack rocks open, a process known as hydraulic fracturing, or "fracking." But the intensive use of water, "will increasingly impose additional costs," and could "threaten the viability of projects" for shale oil and gas, and also biofuels, the agency said."

SUMMING UP

Think back to the OPEC days of the 1970s and the burst in U.S. inflation, long gas lines and all the rest of the problems associated with the OPEC cartel and our lack of energy independence.

Now think of what's ahead for us.

Who'd a thunk it?

American entrepreneurialism, ingenuity and creativity are alive and well.

Let's unchain them.

Thanks. Bob.