12 July 2012 15:56 [Source: ICIS news]
By Joe Kamalick
WASHINGTON (ICIS)--The US could achieve oil independence within ten years and power on to become a major energy exporter less than a decade later, according to a new report and production sector analysis made available this week.
A new analysis by the Manhattan Institute (MI) contends that the only obstacles to the ?xml:namespace>
The MI white paper, “Unleashing the North American Energy Colossus; Hydrocarbons Can Fuel Growth and Prosperity”, argues that recent expansions of US hydrocarbons production – in large part due to newly abundant oil and natural gas shale deposits development – raises “staggering economic and geopolitical” implications.
A November 2009 study by the US Congressional Research Service (CRS) said that the US holds the world's largest fossil fuel resources, counting oil, gas and coal – but that analysis did not include then rapidly developing US oil and gas deposits in shale formations.
“It is no overstatement to say that jobs related to extraction, transport, and trade of hydrocarbons can awaken the US from its economic doldrums and produce revenue such that key national needs can be met, including renewal of infrastructure and investment in scientific research,” said the study’s author, Mark Mills.
The MI analysis also cites a study by Citigroup, published in March this year, saying of expanding US oil and natural gas production, “With no signs of this growth trend ending over the next decade, the growing continental surplus of hydrocarbons points to North America effectively becoming the new Middle East by the next decade, a growing hydrocarbon net exporting centre”.
“The implications for the American economy and its role as a world leader are, if fully realised, nothing short of revolutionary,” Mills argues.
“An affirmative policy to expand extraction and export capabilities for all hydrocarbons over the next two decades could yield as must as $7,000bn [€5,740bn] of value to the North American economy, with $5,000bn of that accruing to the US, generating $1,000bn-$2,000bn in tax receipts to federal and local governments,” Mills contends.
The Citigroup report noted that “For the first time since 1949, the
Citigroup conceded that part of the growth in US exports of refined products is attributable to the recession and its related domestic demand reductions, along with demographic changes and fuel efficiencies.
But the more exciting part of the emerging US energy exporting role, said Citigroup, “is on the supply side as the US has become the fastest growing oil and natural gas producing area of the world and is now the most important marginal source for oil and gas globally”.
“Add to this the steadily growing Canadian production and a comeback in Mexican production and you get to a higher growth rate than all of OPEC can sustain,” the Citigroup paper added.
The Manhattan Institute’s Mills says that “In collaboration with
“Such a policy could lead to North American becoming the largest supplier of fuel to the world by 2030,” he added.
Charlie Drevna, president of the American Fuel & Petrochemical Manufacturers (AFPM), disagrees somewhat with Mills, but only because Drevna thinks
“I will tell you that from our perspective, we believe we could do it before 2030, given the right circumstances,” Drevna said.
Drevna contends that, if
“Look at all the shale plays across the country,” he said, referring to both natural gas and crude oil. “Between natural gas, natural gas liquids and oil, there’s no question that we could quickly reduce OPEC imports by half and then reach North American independent energy security. I wholeheartedly believe we could do it.”
The catch, of course, is in getting government policies to enable oil and natural gas development to reach what the Manhattan Institute, Citigroup and AFPM see as a new global energy exporting role for the
For example, said
Drevna declined to say whether a change in White House and Senate control in the coming
“Whatever the administration, they need a change in attitude, a reality check,” Drevna said.
“Anyone who understands our industry and this nation’s resources and the new technology and what’s right for the nation and consumers should be able to connect the dots,” he said.
“If you look at the shale plays all over this country, you can see the energy mosaic come together,” he added.
“And if you stare at that mosaic long enough you begin to see the picture,” he said, “and that’s what the administration needs to do.”
($1 = €0.82)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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