Thomas Friedman’s weekly column in the New York Times mentions this quickly,almost as a minor point, while discussing the politics of the Middle East.
(The entire editorial ishere, but it’s not very relevant to this thread.)
I notice that the source of the quote is an energy company, which presumably has a financial interest and may be biased.
I know there is a lot of hype about fracking, but I thought that it’s mostly talk, except for a few places in North Dakota. It seems to me that the fears of fracking causing an environmental catastrophe are realistic enough to slow down the potential growth. At some point, there will be a serious leak or damage to an entire city’s water supply. But even if that never happens, are the reserves really that huge? And are they commercially viable? How many companies are actually drilling right now, and how many more are on the way?
My question is: is the US really about to become the biggest oil power in the world, and very soon?
No. This could be huge in CA if the laws allow it. I don’t have a cite, but a close friend who is in the oil business agrees that we could be the largest oil producer in a few years.
Isn’t fracking about producing natural gas and not oil? Or are we lumping the two together? If so, and one includes coal production, perhaps it’s true. Or perhaps the assumption is that production elsewhere is going to slow enough for the US to overtake Saudi Arabia and other countries?
California has a reputation for having the fiercest environmentalists in America. Lots of hippy tree-huggers, but also lots of serious people, with big money. Who’s winning so far–the oil lobby ,or the Sierra Club ?
It can be used for both oil and gas. The principle is the same - release additional hydrocarbons that can’t currently be accessed.
The editorial is somewhat misleading.
It says “oil exporter”, but it’s clear liquid hydrocarbons are intended. (ok, so it’s obviously not ‘clear’, but the original editorial’s intent is straightforward if you read it and not Friedman’s summary).
We’re hard up for producing significantly more oil (at least without drilling more off California, Alaska, or the Atlantic seaboard) but we’ve got lots of gas and we’ve got lots of LNG capacity coming online over the next 5 years. It’s definitely possible we can export sufficient LNG by 2017 to be the world’s largest hydrocarbon exporter.
I should add, even if we become the world’s largest hydrocarbon exporter, the net hydrocarbon flow probably won’t be great. We’ll still be importing significant amounts of oil for fuel.
Fracking is very real and is a significant part of the economy already in several states including Louisiana, Texas, North Dakota and Pennsylvania with more that may take advantage of the technology in a few years. There are some environmental concerns but the biggest problem with it was that it produced too much natural gas too quickly and flooded the market dropping prices to levels where new drilling is not attractive right now. That is only temporary though and the energy is there when prices rebound and make it attractive again. No one predicted the U.S. had hydrocarbon reserves anywhere on that scale ten years ago and yet here they are. I know you asked about oil rather than natural gas but the two are related and the same wells can often produce both especially if they target different depths.
The energy markets are having to adapt to the massive strikes incredibly quickly. Coal power plants are either being switched to natural gas (good for the environment) or closed and new natural gas plants being built to replace them. Fleet trucks are being converted to run on natural gas because it is so much cheaper than gasoline or diesel fuel and it is likely that natural gas powered consumer vehicles will become much more common in the next few years as soon as the necessary infrastructure like filling stations reaches a critical mass (many have already been built).
It is likely that the U.S. will become the world’s biggest hydrocarbon producer in a few years. We have a whole lot of land and lots of new drilling using cutting edge techniques. However, even that fact isn’t as important as the fact that the U.S. is expected to be energy independent overall by 2030 now and a net exporter when you include both oil and natural gas. That is a huge game-changer on the international stage and one of the strongest assets the U.S. has for its long-term economic outlook.
The Energy Information Administration (an agency within the Department of Energy) is a very good source of statistics about production and consumption of various types of energy.
There are a lot of factors at play here as I understand. I will highlight a few :
1> The price of Crude and NG : If Oil prices stay where they are today, then NG surely has a bright future. If NG prices stay where they are today, NG future is still attractive but not by leaps and bounds. A lot of the fracking guys make a significant portion of their revenue by recovering the liquids that come out with the gas and selling the liquids to oil refineries. But fracking does not have a huge ROI with the current prices of NG
2> The future of LNG in transportation : A lot of transportation needs to change to NG. Last I heard, truck-trailers operating out of California ports were switching to NG or Compressed natural gas. In the US, passenger vehicles still do not work with NG. The change has been more outside of the US wherever NG is more easily available.
3> The future of LNG in Power: Japan has been constructing major LNG terminals for importing. US terminals were initially made for importing LNG but are now being retrofitted for export. Running NG in a combined cycle (Gas turbine + steam turbine) produces a lot less CO2 than coal burning plants and looks like Japan maybe moving away from future investment in nuclear energy. Time will tell if this will be a trend.
4> NG to Oil : GTL plants convert natural gas to liquids. Read about Shell’s $20B Plant in Qatar or SASOL’s experience with GTL. If the price is right and the demand is predictable, converting natural gas to gasoline is feasible.
5> NG to plastics : Dow has already announced plans to move manufacturing back to the US and last I heard they started on a Poly-Ethylene plant in Freeport, TX. If gas prices are cheap and remain predictable - a lot of manufacturing may move back to the US.
6> Coal to SNG : China has been a big player in converting coal to synthetic natural gas. The only US plant in the Dakotas that has been doing so has been making consistent losses. China may get into this because it has lots of cheap coal and may want to keep price pressures in case it does decide to go the LNG route.
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