In the current issue of COMMENTARY, I express my confidence about America’s future. Further evidence of the advantages we have, notwithstanding all of the gloomy sentiment one hears, comes from this Financial Times article which suggests that the long-sought goal of “energy independence” may finally be within reach. This is mostly the result of shale oil discoveries centered in places like North Dakota but also due to new drilling techniques which have opened up hitherto inaccessible “tight oil” fields in North America.
As a result, the FT reports, “Many analysts expect that in the coming decade the US will leapfrog Saudi Arabia and Russia to become the world’s largest producer of liquid hydrocarbons, counting both crude oil and lighter natural gas liquids such as propane and ethane.”
The article also contains this:
Edward Morse, a former US energy diplomat now global head of commodities research at Citigroup, the American bank, believes it will be possible for the US to cut imports from about 10m barrels per day to about 3m b/d by the early 2020s. All of its import demand could be met from Canada and Mexico. “The two vulnerabilities of the US as a global superpower have been its dependence on imported oil and its current account deficit,” he says. “Now it may be in the process of resolving both of those.”
This does not mean that the Middle East, Nigeria, Venezuela or other oil-producing areas will cease to matter. They will still be strategically important because they will be producing oil that will be used in Europe, East Asia, and elsewhere. But the U.S. nevertheless figures to be in a very strong position going forward, especially as compared to all of its potential rivals. As Morse says:
“The notion that the US was a superpower in the 20th century but won’t be in the 21st doesn’t hold up so well now,” Mr Morse says. “Compare it to a country such as China, which is going to be overwhelmingly dependent on energy imports. The US is in a much stronger position.”
Exactly. Yet one more reason why the 21st century can be another American century—as long as we don’t lose our confidence.