Independence Day Video: Yes We Can Drill Our Way to Energy Security
Remember the energy crisis when the United States was overly reliant on OPEC?
Domestic oil production was waning in the early 1970s, and due to our dependence on OPEC, the cartel carried huge sway over America’s – and the world’s – energy demands. OPEC used its domination of world oil production as a political weapon in the 1973 Oil Embargo, and the resulting energy crisis led to gas shortages and long lines at the gas pump and the commonly-held belief that U.S. energy security was a pipe dream.
Even just a few years ago not much had changed – most people thought we were quickly running out of oil. We were told by President Obama and many others around that “We can’t just drill our way to energy security.”
But then we did – thanks to fracking.
Since fracking unleashed an energy renaissance, we’re now enjoying our first ever trade surplus with OPEC, and our energy security is currently at its highest level in more than a quarter of a century. We are now the fourth most energy secure country in the world and we have cut our imports from OPEC in half.
The development has caught many experts by surprise, including IHS chairman Daniel Yergin, who has said, “A very critical part of it is what’s happened in the United States with this extraordinary growth of shale oil that’s really taken much of the industry and much of the world by surprise.”
OPEC, of course, tried to drive out U.S. shale by pumping full blast starting in late 2014, shifting its policy from price protection to protection of its share of the market. The strategy was designed to prompt U.S. shale to freeze in horror and simply go away. But the tactic has failed miserably, as the U.S. shale industry has proved resourceful and resilient at the same time OPEC nations have failed repeatedly to agree on production ceilings.
As a result, the U.S. has since displaced Saudi Arabia as the world’s swing producer, and even President Obama has changed his tune, stating “We are closer to energy dependence than we’ve ever been before.”
More than 40 years after the 1973 Oil Embargo, OPEC is now about as relevant as the bell bottoms and mood rings that dominated that era:
“… I have absolutely no idea how OPEC can remain relevant,” Business News Network reporter Jameson Berkow said recently. “… It’s simply not relevant anymore and it’s amazing. I don’t think amazing is a strong enough word.”
After five long decades, the obituary has been written: RIP OPEC, 1960-2016.
This Fourth of July, Americans can celebrate the fact that we did drill our way to energy security – thanks to fracking.
Happy Independence Day from Energy In Depth!