More Good News From the Energy Front
My recent Issues in Brief paper, Reversal of Fortune, discussed the dramatic turnaround in the U.S. oil situation and the implications it has for the economy and the manufacturing sector. A subsequent article in the Washington Post by Juan Forero points out that this turnaround is taking place in South America and Canada as well as in the United States. The expansion of production is characterized as a “geopolitical shift” by one energy CEO in Latin America and as a “revolution” by Larry Goldstein, a well-respected oil analyst who is the Director of the Energy Policy Research Foundation in New York. Goldstein says he has never seen anything like what is occurring in all his 47 years as an oil analyst.
Some are concerned that increased oil production in the U.S. and throughout the Americas means that we will delay adopting alternative forms of energy. The fact is that even if one accepts the most optimistic projections of the rate at which renewable energy sources can expand, oil and natural gas will still account for more than 50 percent of total energy consumption in the United States 30 years from now. Given this, the increased production of oil in the United States and the rest of our hemisphere is a real plus for the economy. It means more jobs, a lower oil import bill, and greater security of supply of the oil that we do consume. As Forero points out, oil exports to the United States from OPEC countries have been declining since 2006. Further, imports of petroleum fell from 60 percent of total U.S. consumption in 2005 to 45 percent in 2011.