“NO Gas Here!” said printed signs hung at gas stations nationwide in 1973. America faced a crippling oil crisis brought on by the Arab Embargo in response to the Yom Kippur War. Imports of oil accounted for 35% of U.S. consumption when President Nixon declared America would be energy independent in a decade. So did every president after him. Unfortunately by 2005, America was importing 60% of its oil.
But could President Nixon’s prediction of energy independence, albeit a bit delayed, become reality? The answer may astound you. Last year Saudi billionaire Prince Alwaleed bin Talal spoke of fears of America’s energy and shale production as “an inevitable threat [to nations] entirely dependent on oil [exports],” and stated that “this reality is becoming a source of concern for all.” In the last nine years, American ingenuity has reversed fifty years of importing billions of dollars of energy and has sparked an energy revolution in oil, natural gas, and coal, which was not possible just a decade ago. In 1972, Wallace Pratt, a prophetic geologist stated “oil is in the minds of men.” This year America will become the biggest oil producer in the world surpassing Saudi Arabia and Russia. America continues to lead in the production of coal and natural gas and has been developing and maximizing alternative energies—wind, nuclear, solar, biofuels—and strengthening the conservation of energy with new innovations in insulation and fuel efficiency. America now produces enough energy to meet 84% of its own demand and could meet 100% by the end of the decade.
U.S. energy companies have known about trapped gas in shale and tar sands since the 1940’s, but recovery was too expensive and the production yields were too low. Recent technology such as horizontal drilling and advanced geological planning have made hydraulic fracturing, herein known as fracking, less burdensome to manage and the yields have been produced on a grand scale all across the nation. The Marcellus Formation – a shale range – found under Western New York, Pennsylvania and West Virginia is producing 2 million gallons a day which is more than some individual nations in the Organization of the Petroleum Exporting Countries (OPEC). Unfortunately, Western New York gas production sits idle due to unsubstantiated safety concerns for drinking water as Pennsylvania border towns become boomtowns for jobs. The New York state moratorium continues in spite of a landmark study by the Environmental Protection Agency in 2004 which concluded fracking posed no threat to underground drinking water supplies.
The Green River Formation in Colorado is estimated to have three times more recoverable oil than Saudi Arabia’s top oil field according to energy expert Daniel Yergin. Shale gas is expected to become 50% of America’s natural gas production by 2035 compared to only a 1% market share in 2000. Energy experts consider the Gulf of Mexico part of the “Golden Triangle” of offshore drilling which extends to Brazil and Western Africa. The British Petroleum deepwater spill slowed growth in the region, but “research confirmed that the microbes had eliminated much of the oil and gas that had leaked from the well,” according to PBS. Today, investment and drilling in the Gulf has rebounded. WoodMac Energy forecasts more than $20 billion to be spent on drilling development wells alone in 2015 in the Gulf. The U.S. Energy Department predicts that by 2035, offshore production will increase by over 80%. The offshore renaissance is expected to account for a third of the U.S. budget and half a million workers by 2020 according to James Burgess of the energy news website Oil Price.
The lack of America’s external demand for energy has led to a shock around the world, threatening balance of power not only in Saudi Arabia, but especially in Russia. Energy strategist Daniel Yergin wrote that America’s rise as an energy producer “has a wide geopolitical impact, for it upsets a four decade old economic and political balance that has proved so durable that it even survived the upheaval that was set in motion from the collapse of the Soviet Union.” Nearly half of Russia’s revenue comes from energy exports, so a reduction in price and a loss of a monopoly on Europe will hurt Russia. Senator John McCain recently called Russia merely “a gas station masquerading as a country.” Energy has played a big role in Russia’s advances in Ukraine as these countries have had several energy disputes in the last decade.
Because of cheap domestic energy we could see another gilded age in manufacturing. PricewaterhouseCoopers estimates over one million manufacturing jobs could be created in a decade due to low energy prices. The Shale Revolution has allowed the U.S. to become very competitive. According to Bloomberg Business, “the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible.” As Chinese wages increase and energy demand increases, China’s global economic and military ambitions will be thwarted by its dependence on coal, with America sitting on the world’s largest reserves.
In 1958, in a seminal moment, America’s energy dependence and geopolitical decisions were exposed when Nixon’s motorcade was chased out of Venezuela by a rock throwing mob. Today, the Shale and Energy Revolution will propel an American renaissance that will not only secure our national interests but bring back manufacturing and jobs. We must demand from our public officials to open up more opportunities for fracking locally in Western NY and nationally on federal lands. If we don’t impede our own energy potential, America will not only be yesterday’s superpower, it will be tomorrow’s superpower.