Shale Oil Boom Rattles OPEC
If we could get environmental wackos out of our policy making, we could be energy independent and stop giving money to oil terrorists overseas.
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At a critical Friday meeting in Vienna, the Organization of the Petroleum Exporting Countries (OPEC) will set production policy. For the first time, they will be grappling with the challenges of shale oil, even none of the member states are major shale oil producers.
The shale boom began in the U.S. as a ripple in North Dakota and Texas. Some thought its impact would be limited and regional, not global. Now that uptick on our domestic production curve has triggered a tsunami with geopolitical implications.
That’s because the U.S. does not need 100% energy independence to get OPEC’s attention. Due to production but also conservation and a protracted recession, our need for imported oil has contracted from 60-70% of consumption to about 40%, headed south. As the world’s largest crude oil market, changes in our domestic supply picture must necessarily reshuffle the import mix. Remember how skeptics argued that the shale boom is “a mirage“? I have often maintained that domestic supply increments of 500,000 barrels per day can be significant in a worldwide 90 million bpd marketplace. We’re starting to see that play out, albeit in some surprising ways.