Independence has been the call-word for U.S. energy politics since the oil shocks of the 1970s. The sudden jump in oil prices as exporting countries started to flex their muscles and the chaos after the fall of the Shah of Iran changed the entire outlook for the American people.
Oil was no longer a right of modern life, the foundation of unending progress, but rather a source of consternation and fear. As imports began to grow and domestic production fell, more and more Americans became fixated on the idea of protecting themselves from the instability of producing regions like the Middle East.
In the past few years, many people imagined they had finally found the answer: homegrown renewable energy sources like wind, solar, geothermal and bio-fuels.
Then the International Energy Agency turned the whole issue on its head with the release of its World Energy Outlook 2012.
After decades spent coming to grips with the fact that the U.S. was an energy power on the decline, with growing needs and shrinking domestic output, the IEA predicts that the country will soon become the single-largest oil producer in the world.
Despite a hiccup in exploration following the massive 2010 spill at the Deepwater Horizon drilling rig in the Gulf of Mexico, offshore production has recovered and looks primed to grow steadily in coming years.
Meanwhile, the proliferation of new drilling techniques has opened up a vast array of hydrocarbon reserves that were previously deemed uneconomical, or not “technically recoverable,” and investment in oil has surged around the country.
The use of horizontal drilling and hydraulic fracturing, the process known as fracking that involves blasting water and chemicals into the ground to break up rock formations, has led to a massive revival in some of the country’s most prolific producing states.
But it has also opened up entirely new fields, turning Pennsylvania and other states in the Northeast into major gas powers.
More importantly, the massive Bakken shale formation in North Dakota has turned that state from a minor player in the oil industry into the second-largest producer in the country. After having wavered between 70,000 and 150,000 barrels per day for more than two-and-a-half decades, the state finally began to draw interest in 2008.
North Dakota quickly surpassed the declining California and Alaska to stand behind only Texas, rising from 138,000 barrels per day in January 2008 to 747,000 barrels per day in October 2012, according to the U.S. Energy Information Administration.
Stalwart oil producers like Texas and Oklahoma have also been able to tap new reserves with the rise of these technologies. From the start of 2008 to October 2012, production in the two southwestern states grew nearly 92 percent and 42 percent, respectively.
Aiming for the top spot
On the back of this booming unconventional oil production, the country has surpassed the previous second-place producer, Russia. By October 2012, the EIA reports that the U.S. reached a daily production of more than 6.8 million barrels, and total liquids production in excess of 10 million barrels per day.
That still falls well short of world-leading Saudi Arabia, which averaged more than 11 million barrels per day in 2011, according to the EIA.
However, the IEA predicts that the U.S. will be able to bridge that gap by the end of the decade, reaching 11.1 million barrels per day of oil production and becoming “all but self-sufficient” in net energy usage by 2035.
The change will not necessarily last long, as production will likely drop off after 2020. But, with demand declining and renewables on the rise, the turnabout in the U.S. oil market could reshape the way Americans understand energy.