The Big Energy Story of 2012

by John Brian Shannon

The world energy industry is suddenly transforming into something very different from the industry we have grown accustomed to over the past decades. In those previous decades, it was pump and burn more oil, mine and burn more coal and build more coal-fired burners to produce electricity. More, more and more smokethat is!

Anti-nuclear protesters were a constant feature in the press anywhere a reactor was considered, built or commissioned into use. Urban residents held irregular anti-smog protests outside of City Hall in large cities like LA and Tokyo.

Small-scale and large wars, were fought over control of the world’s oil and gas fields — sometimes affecting the very economic health of those nations.

Welcome to 2013. The world is still reeling from President Barack Obama’s decision to wean America completely off of foreign oil, he also ordered oil and gas production to be dramatically ramped up in the U.S.A. – and he decided to make his country a net oil exporter of oil and gas. Not just any-old net exporter mind you, but the world’s number one exporter of both oil and gas by 2017! That’s in four years.

Heady stuff for a normally ambivalent world.

Remember back in February of 2006, when then-President George W. Bush famously stated in his State of the Union speech that “America is addicted to oil.” That of course, is true. The U.S.A. and the other industrialized nations wouldn’t survive without oil as the entire Western economy is based on petroleum and the products made from it. From transportation and energy fuels, to plastics, medicines, agricultural fertilizers, residential and commercial buildings – virtually everything we live in, drive, wear, buy or use, is a product or by-product of petroleum.

Both Presidents — Obama and Bush, foresaw the importance of lowering overall energy use to improve the health and quality of life for American citizens, to lower international tensions by sourcing oil and gas domestically and to invest in clean technology to improve conservation and efficiency.

It turns out that conservation, green energy and domestic energy extraction is not a Democrat or Republican thing — it’s a leadership thing. And all over the world, it is catching on. Welcome to 2013, indeed!

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JOHN BRIAN SHANNON

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America’s Sudden Energy Pivot

by John Brian Shannon

Earlier this year, President Barack Obama sent me a letter outlining the Administration’s energy goals. In it, he laid out his ambitious plans to decrease dependence on foreign oil imports, increase oil and gas exploration and extraction, lower the fuel prices paid by consumers and set historic fuel-efficiency standards for U.S. cars and trucks. Below is a short excerpt of the letter which you can read in full at johnbrianshannon.com

The White House, Washington

March 21, 2012

Dear John:

Thank you for writing.  I appreciate hearing from you, and I share the vision of millions of Americans who want to take control of our Nation’s energy future.  My Administration’s all-of-the-above energy strategy is about developing every source of American energy—a strategy aimed at saving families and businesses money at the pump by reducing our reliance on foreign oil, expanding oil and gas production, and positioning the United States as the global leader in clean energy.

The hard truth is there are no overnight solutions to our energy challenges.  The only way to deal with this problem is through a sustained, serious, all-of-the-above approach.  Under my Administration, American oil production is at its highest level in 8 years, and we are now less reliant on foreign oil than in any of the past 16 years.  We have more working oil and gas rigs than the rest of the world combined, and we have opened up millions of new acres for oil and gas exploration where appropriate and where it can be done safely.  My Administration has also approved dozens of new pipelines to move oil around, including from Canada, which will help create jobs and encourage more energy production.  Thanks to our Nation’s booming oil production, more efficient vehicles, and a world-class refining sector that last year was a net exporter for the first time in 60 years, we cut net imports by 10 percent—or a million barrels a day—in the last year alone.

Only eight months later, on November 12th, the International Energy Agency reported that the United States had suddenly moved from a country historically dependent on foreign oil, to a net exporter. But that is just the beginning. According to the IEA the United States will become the world’s largest oil producer by 2017 — surpassing even Saudi Arabia. Reuters said the IEA annual long-term report surprised top IEA analysts:

Energy developments in the United States are profound and their effect will be felt well beyond North America – and the energy sector”

“The recent rebound in US oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity – with less expensive gas and electricity prices giving industry a competitive edge.”

“The United States, which currently imports around 20 percent of its total energy needs, becomes all but self-sufficient in net terms – a dramatic reversal of the trend seen in most other energy importing countries.”

“The Chief Economist for the IEA said the US would far surpass Russia as the world’s largest gas producer by 2015 and become the world’s largest oil producer by 2017.”

Former President George W. Bush was completely right when he declared, “America, is addicted to oil.” Sadly, that has not changed. But instead of staying with the status-quo (perilously dependent on foreign oil) the Obama Administration decided early-on to keep billions of dollars of oil & gas investment, jobs, profits and other related economic activity here for the benefit of North Americans. And that, my friends — is historic change for the better.

JOHN BRIAN SHANNON

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