Something has been happening that is so remarkable it is difficult to believe. Just 10 years ago, it would not have been thought possible; in the early 1980s, it would have been considered a fairy tale. But here it is, in the words of The Wall Street Journal:
“The U.S. is overtaking Russia as the world's largest producer of oil and natural gas, a startling shift that is reshaping markets and eroding the clout of traditional energy-rich nations.”
In the early 1980s, the best brains in energy research were saying that by the end of the 20th century most of the world’s oil supplies would either be gone, or too expensive for most uses.
Verbal pictures were painted of gas lines, of laws restricting each family to only one vehicle, of huge cost increases for practically everything due to the increases in transportation costs that would be the result of rising oil prices.
None of those predictions have come true, and that is despite the fact that emerging nations are creating new demands for oil and natural gas that few could have imagined in the 1980s.
The biggest reason for the increase in domestic oil and natural gas production is that those industries, often in the face of resistance from so-called environmentalists, have learned to extract more oil and gas.
The two great advantages to this are (1) we now buy far less of these commodities from abroad, thereby strengthening our balance of payments and (2) domestic production eliminates our dependence on foreign suppliers to meet our needs. This gives us the opportunity to pull back from the politics of the Middle East without endangering our energy supplies. That by itself saves money and blood.
Advances in energy conservation over the past 30 years have made us more energy efficient, which is a good thing. Advances in production have added independence to efficiency, which is a great thing.