The International Energy Agency confirms what we’ve known for a while: The United States is the world’s top petroleum producer. The American Interest’s Walter Russell Mead quotes from a Financial Times story [subscription required]:
US production of oil and related liquids such as ethane and propane was neck-and-neck with Saudi Arabia in June and again in August at about 11.5m barrels a day, according to the International Energy Agency, the watchdog backed by rich countries.
With US production continuing to boom, its output is set to exceed Saudi Arabia’s this month or next for the first time since 1991. [...]
Rising oil and gas production has caused the US trade deficit in energy to shrink, and prompted a wave of investment in petrochemicals and other related industries. [...] It is also having an impact on global security. Imports are expected to provide just 21 per cent of US liquid fuel consumption next year, down from 60 per cent in 2005.
America’s energy situation has been transformed by the shale boom. According to Energy Information Administration (EIA) data, in 2006, Saudi Arabia produced 2.4 million barrels per day (bpd) more petroleum than the United States. Now, thanks to American innovation--combining horizontal drilling with hydraulic fracturing—the United States is out-producing the Middle East oil giant by more than 2.4 million bpd.
As a result, net petroleum imports are at a 28-year low, and we can seriously consider lifting the 40-year-old U.S. oil exports ban.
The shale boom has also fueled significant job creation. As I noted last week, the shale energy supply chain alone supports over 500,000 jobs. Earlier this year, the Wall Street Journal reported on how the construction industry will be winners from the boom. And according to a report for the U.S. Chamber’s Institute for 21st Century Energy, by 2025 shale energy will support 3.9 million jobs all along the value chain—from producing oil and natural gas to transforming it into products we use every day.
With the success we’ve seen, let’s be wary when federal agencies like EPA want to impose duplicative regulations on hydraulic fracturing when states have had a long track record of successful regulation. Shale energy has put the United States in a great position economically and geopolitically. With the right policies this success will continue.