In its 2012 edition of the World Energy Outlook, the International Energy Agency predicts that the U.S. will become the world's biggest oil producer within eight years.
Yes, eight years -- as in, by 2020. And you know what else? The IEA predicts that we will become fully energy independent by 2030.
It's an unexpected announcement, and one that might throw M. King Hubbert's ideas about peak oil out the window. In 1956, when Hubbert predicted that America's oil production would peak between 1965 and 1971, he didn't count on the viability of hydraulic fracturing, commonly known as "fracking". Though that technology was available as early as the 1940s, it didn't evolve significantly until the 1990s, after Hubbert had passed away.
And that, combined with America's large shale oil deposits, is largely responsible for today's oil boom. Production of crude oil in the U.S. surged 14% between 2008 and 2011. By 2015, we should be generating about 10 million barrels a day. By 2020, we'll hit 11 million, outpacing Saudi Arabia. Ten years later, we become a net oil exporter.
(But wait: aren't we already a net fuel exporter? We are -- but of refined gasoline and diesel. We still import much of the oil that we refine, though.)
America's progress toward energy independence will be accelerated by a reduction in consumption. In the U.S., gasoline consumption peaked in 2006. Although the Great Recession had a hand in the dropoff -- meaning that demand could bounce back, in sync with the country's economic recovery -- gains in fuel efficiency seem to have offset population and commercial growth.
But wait, there's more
As nice as energy independence sounds, there are some less-nice parts to this story.
- For starters, fracking is a controversial technique for oil extraction. It produces huge volumes of wastewater, packed with unpleasant minerals and salts, which can't easily be treated to make it safe for consumption. That's why most fracking wastewater is pumped into injection wells, which may, in fact cause earthquakes. Yikes.
- The cost of fracking will eventually rise, probably due in part to competition for water. If water is made available, that will put a dent in America's clean-water resources. If not, the price of fracking -- and thus, its profitability -- may go so high that it's no longer attractive to producers.
- With oil projected to flow like the River Jordan, there will be less incentive for Americans to become fuel efficient. That doesn't mean that we won't, just that the process might be slowed down. Which could be a serious problem when...
- ...oil production from shale reserves plummets, as it often does. In fact, some suggest that shale oil sources taper off as soon as 12 months into the production cycle. We can keep finding new spots for fracking, but it's a bit like filling an oil barrel with a leaky bucket, which is a frightening proposition.
- So far as we know, most oil-producing countries in the Middle East don't have shale oil reserves, so they'll be relying on conventional wells. If those wells continue to produce, countries like Saudi Arabia will turn their attention to developing nations like China and India, leaving America more isolated. If those wells fail, the Middle East and many of the countries that depend on oil from the region could become destabilized. Either way, there will be some seismic political changes in the coming years. (Pun intended.)
Caveats
There are, however a couple of caveats we should mention:
- The IEA bills itself as "an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond". Those member countries come primarily from Europe and North America, with Australia, Japan, New Zealand, and South Korea on the roster, too. And while we'd never impugn the reputation of the IEA, we have a hunch that analysts from other nations -- especially the oil-rich countries of the Middle East -- might have differing opinions.
- Also, it goes without saying that this is a huge issue, with dozens and dozens of "what ifs" and "maybes" looming around every corner. We've just highlighted a few of the major ones.
If you'd like to order a copy of the IEA's 2012 World Energy Outlook, you can do so here for the low, low price of €150 ($190). Alternately, you can download a PDF of the executive summary here, or -- if you have half an hour to kill -- you can view a walkthrough of the high points in the video embedded above.
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