Making an Energy Boom Work for US
From The New York Times
By David L. Goldwyn
These production booms are revolutionary, but not in the way that many people think. Experts, for instance, argue that an increase in North American energy self-sufficiency will lead to equally drastic changes in geopolitics.
Suddenly having a great wealth of domestically produced gas and, increasingly, oil, the argument follows, will allow the United States to look inward and take less interest in international affairs, including those of the politically challenging countries that produce oil and natural gas in the Middle East, Africa and elsewhere.
This is unlikely to happen. Despite more production from shale deposits like the Bakken in North Dakota, oil’s share of total U.S. energy demand is expected to decrease only to 32 percent from 37 percent by 2035. Natural gas will increase its share to 26 percent from 25 percent and renewables will grow to 11 percent from 7 percent, according to the U.S. Energy Information Administration.
The most strategic factor in American consumption will remain the price of oil and the effect of disruptions on the U.S. and the global economy, not the source or quantity of U.S. imports.
The boom will have many economic benefits. The U.S. balance of trade will improve and producing states will enjoy job growth and revenues. The United States will also grow as a refining center, producing the clean diesel-based fuels of the present and future for both consumption at home and export to Europe and the Western Hemisphere.
The United States will also see a spurt of infrastructure building as the country builds the pipelines and rail lines to move energy from West to East and from North to South. U.S. oil supplies will now be physically more secure, with weatherproof pipelines from Canada and the northern states.
In another big change, the United States will have much greater ability to make up for any import disruption through the country’s strategic reserves of oil.
The Strategic Petroleum Reserve, which stores oil in salt caverns, currently has 80 days of import cover. But if U.S. imports fell to 6 million barrels a day from 8.7 million barrels a day now, the S.P.R. would have 116 days of cover.
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