For years, many people predicted the “end of oil,” a doomsday scenario that hypothesized that the world was running out of oil, that we exhausted the energy underneath our feet. This is known as “Peak Oil Theory” and it was dubbed as almost undisputable in many circles. As the WSJ reported, this last scare was the fifth time in modern history that there has been widespread fear about the world running out of oil.
In the past few years, however, America’s independent producers, known as “wildcatters” reversed what many thought was the industry’s irreversible march into obscurity. Independent producers and service companies together made breakthrough advancements in technology which enabled them to access energy that people knew about, but thought was forever technologically and economically out of reach. Combining the technologies of horizontal drilling and hydraulic fracturing, independent producers were able to tap this energy that was impenetrable for decades – oil and natural gas reserves trapped in shale. Now, people’s fears have been assuaged. In fact, the truth lies in the opposite of peak oil theory. As reknowned energy expert Daniel Yergin coined it, “There Will Be Oil.”
The oil and natural gas industry has truly been resurrected. Majors followed the lead of independents and started coming home to the United States to develop the abundant new source of reserves they found in their own backyard. Plays that were once “played out” became hot spots for development, bringing the jobs and economic growth with them. Thirty years ago, people were leaving West Texas in droves because they thought the oil boom there was finished. Now, it’s booming again. Median family incomes in Permian Basin have increased by more than one-third there’s even a labor shortage. Just at the technology we have today, the Permian Basin will still be developed by the industry in 50 years!
Also, new plays were being discovered. Take the Bakken in North Dakota. It is estimated to hold 4.3 billion barrels of oil – the largest oil find in U.S. history. Towns are booming– and the state now has the lowest unemployment rate in the country. It truly is reminiscent of the gold rush of yesteryear. Not only is this great growth not diminishing, it’s getting bigger.
The jobs and economic benefits that have resulted from this energy renaissance are absolutely amazing. The oil and natural gas sector is truly a bright spot in our nation’s struggling economy. To see the way the industry is hiring like crazy, you’d think we were in a time of blissful economic growth, not a limping recession. And the benefits extend well beyond the industry. The manufacturing sector, petrochemical industry, land owners, restaurants, hotels….you name it. They are all benefiting tremendously from increased demand for their products and abundant energy that make their operations more affordable in the United States.
On the energy security side, there are amazing effects. In fact, the U.S. is slated to be the top oil producer in the world by 2017, and has clearly dramatic implications for our leadership roles on the global energy stage. This week’s Declaration of Independents outlined the dramatic implications for America’s leadership role on the global energy stage. The “real prospect to become less sensitive to external supply volatility” will undoubtedly ”create new abilities for the U.S. to deal with less predictable geopolitical elements ranging from tensions in the Middle East to resource nationalism in Latin America.”
Even the taboo phrase politics: “energy independence” is passing the lips of some of the most formerly skeptical energy experts. With the right policies, North American energy independence at least is within our generation’s grasp. That’s not a bad place for oil — or the United States — to be.