In the 70’s, the United States started to import oil. Why? Allegedly its demand outstripped its supply. But that could be seen in different ways.
Did the US not have enough oil in the ground for a long-term goal of supply itself with oil? Was it worried it would run out too soon if it drilled faster?
Did the US not have the capacity to drill as much as it needed all at once?
Was it strategically more wise to buy it from other countries, particularly Middle Eastern countries where the oil was abundant and inexpensive to extract?
We are constantly being told about peak oil, how the world is running out, and how giants like Saudi Arabia are not making any new discoveries and in fact, some oil exporters are becoming oil importers, adding more strain to the allegedly low supply. We do know as China and India have more and more citizens who want access to gasoline to fuel their vehicles as they are starting to afford them on a more mass-scale, other people want to buy into the market.
But something doesn’t add up to me. The United States does not, by any estimate, have “enough” supply for its long-term self-sufficiency. Let’s say there is something like 18 billion barrels around the country and ready to access. At the current rate of consumption, that will be eaten through quite rapidly.
But for the first time in a very long time, new refineries are being built. The United States is talking about shale oil and its apparent ability to become energy independent and all that. Is shale really a viable option? Is there enough to power the US for many decades to come? What are the roadblocks?
The US is a country that produced its own oil and sold its citizens domestically produced and refined, inexpensive gasoline for several decades, the whole while skeptics since the 1920’s warned that it would have simply run out. Then production tapered off to the point where it had to be brought in from other countries, many who are politically unstable and unfriendly, leading to the 1973 embargo and the 1979 energy crisis. If it had the production capacity and the supply to be self-sufficient then, it wouldn’t have endured embargoes and kept trading with unfriendly nations.
So then a few things are possible:
-Changes to technology and new discoveries have allowed the US to explore and produce enough oil to be self-sufficient on the energy front
-This upswing in production and building new refineries is myopic and means the domestic supply will be consumed at an exponentially quicker rate, depleting stocks and putting the country in a dangerous and vulnerable position in years to come.
-Increased domestic production is a bluff in order to temporarily cause a glut of oil and force exporting nations to lower their prices to sell more.
Your thoughts?