Investing In The US Energy Revolution
By Art Steinmetz
Until quite recently, the U.S.—the world’s largest energy consumer—faced what many believed to be an immutable and uncomfortable reality. With inadequate domestic supplies of accessible oil and natural gas, the U.S. would depend, indefinitely, on external sources for the lifeblood of its economy. This paradigm had deep economic, geopolitical and financial implications. For decades, it bore on national discussions over growth and deficits, alliances and war, and it influenced where energy-intensive industries built their plants—or shut them down. Fast-forward to November 12, 2012, when the International Energy Agency announced to the surprise of many that U.S. oil production was poised to overtake that of Saudi Arabia within five to eight years. The agency reported that, thanks to a combination of increased production and energy efficiency, the U.S. could be “all but self-sufficient” in providing its energy needs within about two decades.1
The price of natural gas, meanwhile, had plummeted more than 70% over the previous four years, and a growing number of international industrial firms were breaking ground on multibillion-dollar plants in places like Pennsylvania, Iowa and Louisiana, for the sole reason that the raw materials and energy required to run their fertilizer manufactories and iron ore mills cost a quarter of what they did back home.
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