January 2016: the U.S. becomes a global energy superpower

Posted by Marita Noon @ OILPRO

Environmentalists like a good crisis. Spreading fear is a proven fundraising technique—with manmade climate change as the fear du jour. But, back in 2005, the “looming crisis,” according to the Kansas Sierra Club, was the end of cheap oil. The post concludes: “The end of cheap oil, followed by the end of cheap natural gas, threatens to cripple strong economies and devastate weak ones.” The author posits: “The world burns oil faster than new oil is discovered.”

Today, slightly more than 10 years later, thanks to American ingenuity and initiative, the world is awash in oil and natural gas—with America being the world’s number one energy producer. As a result oil and natural gas are cheaper than anyone imagined just a few years ago when the price of gasoline, due to a “red-hot global economy and fears over dwindling supplies,” spiked to $4.11 a gallon in 2008. All time highest average gasoline prices of $3.60 in 2012—during the last presidential election—gave credence to the “end of cheap oil” gloom-and-doom scenario.

The Sierra Club predicted: “We’re running out of oil we can pump from the ground and market for under $60 a barrel. Most people alive today will see the end of cheap oil.”

But that all changed when the techniques of horizontal drilling and hydraulic fracturing were successfully combined—allowing previously unrecoverable oil and natural gas to be extracted—unleashing the new era of American energy abundance.

Today, the price of oil is threatening to drop below $30 a barrel. The average price of a gallon of gasoline in the U.S. is below $2.00—with one station boasting a cash price of $1.29.

The Sierra Club author could not foresee energy history being made in January 2016—when a complete reversal from cries of scarcity is taking place. Within a matter of days from one another American oil and natural gas will enter the global market.

Despite predictions that, given how flooded the global crude markets were, lifting the oil export ban wasn’t likely to translate into any immediate exports, the first shipments of U.S. crude oil in more than 40 years left our shores heading to Europe. On New Year’s Eve, a tanker—the Theo T.—pulled out of Corpus Christi, Texas, with roughly 400,000 barrels of crude supplied by ConocoPhillips from the Eagle Ford Shale. Saturday morning, January 9, the second tanker, the Angelica Schulte, left the Houston ship channel after Enterprise Products Partners loaded it with 600,000 barrels of light crude oil.