The earth's environment will not be determined by the US. China and India are the big users of energy and both can't produce enough at home to power their economies.
At the moment Russia, Iran & the Saudis supply China's energy. With or without our help they will get oil and natural gas. If we want to curry favor with China and control Iran's terrorist ambitions (through their proxies: Hamas, Houthis and Hezbollah) providing them energy in return for being a better global citizen is a great policy (& one China is already interested in pursuing). China doesn't want a destabilized Middle East any more than we do.
Besides, China's economy runs almost entirely on domestic real estate construction (which is dead of the vine) & exporting hard goods to the West (the EU is dead meat). So the US can provide China with a limitless supply of energy and a market to buy their exports.
All we need to do is be opportunistic and take advantage of the situation. Is that too much to ask for?
Digging deeper
By ChartR
America’s fossil fuel industry is booming. Indeed, no country in the history of our planet has pulled crude oil out of the ground at the pace of the United States over the last 6 years.
Data released by the US Energy Information Administration (EIA) on Monday reported that the US produced the equivalent of 12.9 million barrels of crude oil and condensate per day last year, 28% more than the world’s previous top producer, Russia, and 33% more than even the oil-rich Kingdom of Saudi Arabia. Production in December notched an even higher mark: 13.3 million barrels per day.
Reversing the flow
The modern petroleum industry can trace its roots — or wells — back to the 1850s when Edwin Drake dug a ~70 foot oil hole in Pennsylvania and started pumping up to 20 barrels a day of what would come to be known as black gold. But, despite getting a head start on much of the rest of the world, the US was a relatively small player in global oil for much of the 20th century.
Indeed, were you to transport someone from the oil-importing heyday of the year 2000 to the present day, they’d scarcely believe that the US had become a net exporter of oil (chart here), let alone become a dominant force in a market that, despite the best efforts of renewable scientists, remains the most important global energy source.
Frack to the future
The shale revolution is credited with much of the progress in America’s newfound oil boom, as hydraulic fracturing (or fracking) unlocked a wave of previously inaccessible, or at least uneconomical, oil and gas reserves. Fracking involves forcing liquid — usually water mixed with sand and chemicals — into fissures in shale rock, cracking and expanding the gaps, allowing the once-trapped oil and gas to find its way to the surface.
As fracking got more efficient, it wasn’t just the crude oil industry that benefited: America’s natural gas production has also exploded over the last 15 years.
Gassed up
Oil and natural gas now join the ranks of heavy machinery, semiconductors, and cultural exports like TV & movies, as one of America’s most important trading markets. In December 2023, the US exported ~400bn cubic feet more natural gas than it imported, a dramatic shift from a decade earlier. Driving much of the boom is America’s liquefied natural gas (LNG) export industry, which — as recently as 2015 — basically didn’t exist.
By liquefying the gas, at a frosty -260° Fahrenheit, shipping and storage becomes a lot easier, with the volume of natural gas in its liquid state roughly 1/600th of the volume in its gaseous state — enabling the result of America’s newfound fracking success to be shipped all over the world.
Upheaval in energy markets, particularly after Russia’s invasion of Ukraine, further boosted demand for American LNG. Indeed, over the past 2 years more than 60% of US LNG exports have found their way to Europe, where buyers have been looking to replace lost supply from Russia. The overall result? From what was pretty much a standing start at the beginning of 2016, America’s LNG industry is now shattering records, with the US becoming the largest exporter of LNG in 2023, unseating Australia and Qatar.
Rigged
One of the most striking things about America’s ongoing fossil fuel boom is that the industry has learned to do more with less.
To get a sense of whether US oil production was likely to rise or fall, you used to be able to look at the number of drilling rigs — the towering steel structures that dig wells and adorn oil-rich regions like the Permian basin in Texas. However, despite the production upswing, the number of crude oil rigs has actually fallen, to about one-third of what it was a decade ago. Advancements in fracking, as well as new “horizontal drilling” techniques — that can spread more than 3 miles underground in one direction — has enabled the industry to increase output without the need for additional rigs.
Independence decade
The “shale revolution" has not only dramatically transformed global oil markets — and made a lot of people a lot of money — it has also shifted the sands that underlie global power structures. Although it would be a simplification to suggest “America doesn’t need anyone else’s oil or gas”, the fact remains that a thriving energy sector gives American leaders a stronger hand when negotiating on the world stage, as well as the ability to step in for allies when supply from volatile regimes is lost or blocked.
We’d be remiss not to mention the elephant in the room: that global temperatures are breaking records at an exhausting pace (chart here), just as America’s fossil fuel sector expands. Indeed, in addition to the emissions from the burning of fossil fuels, fracking itself is also notoriously thirsty work. Energy giants are now drilling not only for oil, but also for the billions of gallons of water they need to frack effectively. Furthermore, on Wednesday a new study published in Nature found that the methane emissions — that are responsible for around one-third of global warming — from US oil and gas producing regions were roughly triple previous government estimates. A change is gonna come, but it’s coming slowly.
Comentários