By Victor Davis Hanson
Thursday, July 06, 2017
Less than ten years ago, America’s energy future looked
bleak.
World oil prices in 2008 had spiked to more than $100 per
barrel of crude.
“Peak oil” — the theory that the world had already
extracted more crude oil than was still left in the ground — was America’s
supposed bleak fate. Ten years ago, rising gas prices, spiraling trade
deficits, and ongoing war in the oil-rich Middle East only underscored
America’s precarious dependence on foreign sources of oil.
Despite news of a radically improved but relatively old
technology called “fracking” — drilling into shale rock and injecting water,
sand, and chemicals at high pressure to hydraulically “fracture” the rock and
create seams from which petroleum and natural gas are released — few saw much
hope.
In 2012, when gas prices were hitting $4 a gallon in some
areas, President Obama admonished the country that we “can’t just drill our way
to lower gas prices.” That was a putdown of former Alaska governor and vice-presidential
nominee Sarah Palin’s refrain “Drill, baby, drill.”
Obama barred new oil and gas permits on federal lands.
Steven Chu, who would become secretary of energy in the Obama administration,
had earlier mused that gas prices might ideally rise to European levels (about
$10 a gallon), thereby forcing Americans to turn to expensive subsidized
alternative green fuels.
But over the last five years, frackers have refined their
craft on private properties, finding ever cheaper and more efficient ways to extract
huge amounts of crude oil and natural gas from shale rock.
In 2017, despite millions of square miles being off
limits to drillers, America is close to reaching 10 million barrels of
crude-oil production per day, the highest level in the nation’s history. The
U.S. may soon surpass Saudi Arabia as the world’s largest petroleum producer.
When American natural gas (about 20 percent of the world
total) and coal (the largest reserves in the world) are factored into the
fossil-fuel equation, the U.S. is already the largest producer of energy in the
world.
While environmentalists worry about polluting the water
table and heightening seismic activity through hydraulic fracturing, fracking
seems to become more environmentally sensitive each year.
When OPEC and other overseas producers tried to bankrupt
frackers by flooding the world with their supposedly more cheaply produced oil,
the effort backfired. American entrepreneurs learned to frack oil and natural
gas even more cheaply and undercut the foreign gambit. The result is a windfall
for all sectors of the American economy.
From 2014 to 2016, fracking helped cut the price of
gasoline by $1.50 a gallon, saving American drivers an average of more than
$1,000 per year.
Due to the fracking of natural gas, the United States has
reduced its carbon emissions by about 12 percent over the last decade
(according to the Energy Information Administration) — at a far greater rate
than the environmentally conscious European Union.
Fracking and cheaper gas are allowing a critical
breathing space for strapped American consumers, as alternative energy
production and transportation slowly become more efficient and competitive.
Fracking has created a national savings of about 5
million barrels of imported oil per day over the last decade. That translates
to roughly $100 billion in annual savings by avoiding foreign oil.
Fracking has allowed the U.S. to enjoy some of the lowest
electricity rates and gas prices in the industrial world. The result is that
cheap energy costs are luring all sorts of energy-intensive industries — from
aluminum to plastics to fertilizers — back to the United States, with the
potential of creating millions of new, high-paying jobs.
Fracking has given America virtual energy independence,
freeing it from the leverage of unstable and often hostile Middle East regimes.
The result is less need to interfere in the chronic squabbling in the oil-rich
but unstable Persian Gulf.
Fracking has reduced oil prices and radically weakened
America’s rivals and enemies. Desperate oil exporters like Iran, Russia, and
Venezuela are short about half the oil income that they enjoyed ten years ago.
The late Hugo Chávez’s oil-fed socialist utopia in
Venezuela is bankrupt.
What so far constrains Russian president Vladimir Putin
is as much a shortage of petrodollars as fear of NATO.
Until recently, the combination of sanctions (lifted by
the Obama administration) and crashing oil prices had nearly bankrupted
would-be nuclear power Iran.
The once-feared OPEC oil cartel, the longtime bane of the
United States, is now nearly impotent.
Friends such as Israel have gained energy independence by
fracking. In contrast, some European allies who have banned fracking out of
environmental worries are more vulnerable to Russian, Iranian, and Middle
Eastern pressure than ever before.
Fracking is not easy. It requires legally protected
property and mineral rights, a natural entrepreneurial spirit, environmental
concern, and a free-market. In other words, it is an American way of doing
business.
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