The shale-oil revolution has transformed petroleum and gas production in the U.S., but the story just keeps getting better.
Remember the first oil embargo? I sure do. I remember the long gas lines, the dread of not being able to drive where we wanted to go and that sick-to-the-pit-of-my-stomach feeling that America never would be the same again. It wasn’t.
When the Organization of Petroleum Exporting Countries cartel orchestrated its cut in oil production in late 1973 to protest the U.S.’s support of Israel during the Yom Kippur War, prices quadrupled almost overnight. Quadrupled!
The economic damage was immediate and lasting. The U.S. economy limped through the rest of the 1970s suffering anemic growth, sky-high inflation and stubborn unemployment. The auto industry got clobbered, and out of that came the first fuel-economy standards, as if regulating the auto industry alone could solve the problem.
Ever since, the U.S. has been vulnerable to oil-price shocks. The Iranian revolution in 1979, the first and second Gulf Wars and the recent “Arab Spring” are a few examples. Every time there’s a global calamity, we pay the price at the pump. Some experts believe there is a $30-a-barrel premium simply due to this uncertainty. Strategically, we have left ourselves terribly vulnerable.
The U.S. has dreamed of becoming energy independent for a long time. Now, nearly 40 years later, that dream is within our grasp. Not complete energy independence. We still need to buy and sell petroleum products with friendly and dependable allies. But now we are in a position to stop importing oil from any OPEC country.
Remember, OPEC’s sole purpose is to bring its members together to collude on production quotas that drive up prices. Cartels are illegal in the U.S. and the rest of the developed world. We really shouldn’t be dealing with organizations that we consider illegal, but geopolitical realities have dictated that we had to deal with OPEC. Up to now, that is.
The shale-oil revolution has transformed petroleum and gas production in the U.S., but the story just keeps getting better. Oil production may decline somewhat after 2020, but natural gas, propane, biofuels, renewables and the more efficient use of all fuels promise to keep the U.S. a net energy exporter for decades.
Today, the U.S. uses more than 18 million barrels of petroleum and related products every day. About 40% of that is imported and about half of what is imported, less than 4 million barrels a day, is from OPEC members. We need a plan to reduce and replace those 4 million barrels a day.
Corporate average fuel economy regulations are supposed to eliminate 2 million barrels of daily consumption by 2025. U.S. energy production is expected to grow by the equivalent of 2 million barrels a day in that time frame. These numbers make the goal look achievable.
Don’t you think the American public would rally around a goal to get off OPEC oil the same way the country took to President Kennedy’s challenge to put a man on the moon by the end of the decade? I sure do. It’s a simple message that everyone can understand and I think the effect would be electric.
I hope there is some budding politician out there considering running for office who makes “Get off OPEC oil” part of his or her platform. A slogan like that would hit the headlines all across the country.
John McElroy is editorial director of Blue Sky Productions and producer of “Autoline” for WTVS-Channel 56, Detroit, and “Autoline Daily,” the online video newscast.