- Chinese man fed up with his girlfriend’s shopping jumps to his death
- Ukraine leader to talk with protesters; Washington urges caution
- Pope Francis: A nun saved my life
- Israeli P.M. Netanyahu backs out of Mandela funeral
- Elian Gonzalez makes first trip outside Cuba since custody battle
- U.S., British intelligence agents enter online sci-fi world to spy on gamers
- Sarah Palin to host the outdoors show ‘Amazing America’
- CIA admits $3 billion intelligence operation was a flop
- ‘127 Hours’ author Aron Lee Ralston, who amputated arm in canyon, arrested in Denver
- Men posing as cops break into home of former deputy
Barrel half full: Optimists see U.S. oil self-reliance soon
While most scenarios show the U.S. depending on imports of oil from Canada and a few other neighbors for decades to come, the managing director at Raymond James is one of a growing school of bullish analysts who believe that booming production in the U.S. will put energy independence within reach.
Marshall Adkins‘ estimates are much more optimistic than those of the U.S. Energy Information Administration, which projects U.S. net petroleum imports to fall only a bit further, from 40 percent of consumption to 37 percent by 2035.
In the eyes of the analysts at the EIA, the hydraulic fracturing technology, which has lifted U.S. oil production recently, will have a significant impact in the next decade but not all the gains will last. The agency’s skepticism is reflected in its low estimates of proven petroleum reserves in the U.S., which as yet do not take into account potentially trillions of barrels of oil trapped in shale rock. Before oil companies started tapping into that shale in the past few years, the U.S. reserve base had dwindled to only 23.3 billion barrels — or about 2 percent of the world’s total reserves — because major oil fields in Texas, Alaska, California and elsewhere had been largely depleted.
But Mr. Adkins contends that will change dramatically as the new technologies are perfected, spurred by market and regulatory changes.
“We think those reserves are going to go up, and up meaningfully, now that we’re able to access formations, particularly the shale [deposits] that were uneconomical in the past,” he told Platts TV.
“U.S. oil supply is really going up fast and it’s really going to completely change the game for the U.S.”
But the one thing the shale revolution will not do is lower gasoline prices significantly to the levels consumers prefer — below $3 a gallon, he said. Not only are high oil prices needed to economically produce shale oil, but world oil prices are still influenced by tensions in the Middle East such as 2011’s Libyan war and the current standoff with Iran. Mr. Adkins did hold out some hope, however, that increased supplies out of the U.S. will lead to moderately lower world oil prices in the next few years.
Not all analysts are convinced by the more optimistic scenarios on domestic production.
Deborah Gordon of the Carnegie Endowment for International Peace points out that extracting oil from unconventional sources such as shale rock and oil sands requires massive quantities of energy and water and raises the specter of increased water and air pollution and a step-up in the threat of climate change.
“With North American oil production ramping up, many have rushed to the conclusion that the United States has newfound oil security. The dark days of dependence on the Middle East will soon be gone as new types of oil are found in abundance close to home. But these claims are more hype than reality,” she said. “They may actually make climate security worse.”
The Post-Carbon Institute, an environmental think tank, questions whether U.S. shale oil supplies will last for long. Depletion rates at even the lucrative Bakken shale wells in North Dakota averaged 69 percent in the first year and 94 percent over the first five years, belying industry claims that they will yield oil for 30 to 40 years. The cost of continuous capital investment needed to keep pumping from the wells could be prohibitive, Post-Carbon analysts caution
But others say the U.S. energy renaissance is not just a flash in the pan.
“The United States has the most arable land of any country on Earth, is rich in natural resources and promises to emerge as a largely self-sufficient energy superpower thanks to both offshore oil and shale gas deposits,” said Daniel Twining of the German Marshall Fund. Because the U.S. has such a large lead in resources, technology and economic and military dominance, “it will be difficult for rising powers to match, even if countries like China ultimately do surpass the United States in individual components of national power like gross domestic product.”
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
About the Author
- Inconvenient truth: China, developing world now biggest source of greenhouse gases
- U.S. unemployment falls to five-year low of 7 percent; 203K jobs added
- Economic growth jumped to 3.6 percent in summer
- Spending on social welfare rose as economy tanked during recession
- Treasury aims to sell off GM stock by end of year
Latest Blog Entries
By Brahma Chellaney
Beijing's creeping aggression signals a challenge to U.S. presence in the Asian Pacific
- CURL: Obama tells a whopper on IRS scandal
- WOLF: The president's other Obamacare lies
- Tech companies call for an end to NSA online snooping
- Lawmakers see 'false narrative' of Obama as a terrorist fighter
- Satanists petition for statue at Oklahoma Statehouse
- Obama lied about Syrian chemical attack, 'cherry-picked' intelligence: report
- Ted Cruz sees legal landmines ahead for Obamacare
- MSNBC host: Obamacare a 'wealthy white men' racist word
- WWII vet, 90, en route to Pearl Harbor event booted from flight
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
Independent voices from the The Washington Times Communities
Let’s talk about everything, especially the absurdity of it all
White House pets gone wild!
Let it snow