“Fears over oil running out – to which BP has never subscribed – appear increasingly groundless,” BP’s group chief executive Bob Dudley said. “The U.S. will not be increasingly dependent on energy imports, with energy set to reinvigorate its economy.”
Aided by gains in technology, the U.S. shale gas boom has already cut household energy bills by an estimated U.S. $1,000 a year and spurred a wave of industrial investment, reversing a 30-year trend of declining manufacturing jobs.
According to Bloomberg News, at least five new U.S. steel plants are planned that would use gas instead of coal to purify iron ore, including a U.S. $750 million Louisiana plant by Nucor Corp.
Chemical and fertilizer companies are also reportedly planning new gas-fueled plants, with some analysts saying cheap energy could result in a “re-industrialization” of the United States.
While major shale gas and tight oil resources exist elsewhere, including in Australia, BP’s report noted that significant exploitation had thus far only occurred in North America, due to a range of market factors.
In a statement, BP group chief economist Christof Rühl said: “Vast unconventional reserves have been unlocked in the U.S., with oil production following gas. This delivery has been made possible not only by the resources and technology, but also by ‘above-ground’ factors such as a strong and competitive service sector, land access facilitated by private ownership, liquid markets and favorable regulatory terms.
“No other country outside the U.S. and Canada has yet succeeded in combining these factors to support production growth. While we expect other regions will adapt over time to develop their resources, by 2030 we expect North America still to dominate production of these resources.”
Fossil fuels dominant
President Obama’s call in his second inaugural address for action on climate change has also received assistance from the gas boom.
In the United States, according to the Environmental Protection Agency (EPA), natural gas-fired power plants produce around half as much carbon oxide emissions, less than a third as much nitrogen oxides, and one percent as much sulfur oxide as coal-fired plants. In light of this, the New York Times reports that the EPA is planning tighter emission standards to force power generators to switch from coal to gas.
The National Resources Defense Council estimates that emissions from current coal-fired plants could be cut by more than 25 percent by the end of this decade, helping the U.S. president achieve a pledge of reducing total domestic emissions by about 17 percent from 2005 levels by 2020.
Yet the oil and gas boom will see fossil fuels remain dominant in the U.S. energy mix, with renewable energy’s share of total electricity generation forecast to rise from 13 percent in 2011 to just 16 percent in 2040, according to the EIA.
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Robbie Stewart
After living in the Middle East for 10 years and seeing the rise of economies and the lack of business planning and profitability on a massive scale, I see the USA as continuing to lead the world in innovation, ingenuity and resourcefulness especially in the energy sector. Shale gas extraction will sustain our supply, but there are big environmental and economic limitations that must be overcome if we are to “surpass” the Russians and Saudis. THAT is speculation and I wouldnt bet on it.
Juanito
"Coal growth will slow to 1.2 percent a year, with India overtaking the United States as the second-largest coal consumer by 2024 behind China."
Despite the supposed glories of "clean" coal [James Fallows}, Chinese/Indian consumption of coal could be the deal breaker of all deal breakers in planet history. Critical advance is necessary in the development of passive technologies for CO2 absorption. After all, how much oxygen making up the Earth's atmosphere is produced by oceanic phytoplankton? Carbonic acid will kill the phytoplankton.
Marguerite
You can’t seriously assume fracking the US for shale gas will continue. It is an unviable resource given the extremely hazardous environmental and health issues involved in extraction. Absolutely untenable.
On a brighter note, the sun and wind resource outlook is extremely promising in such a large and enterprising nation. England and Germany have shown these technologies to be very successful in providing up to one third of the energy used in a day, along with constant innovative improvements to increase output.
This is America’s future in energy. It’s already sweeping the nation. And when the megafunding given shale moves to wind and solar, the US will lead the world in intelligent energy production.
Charles
Any questions on how are we going to deal whith 8.3 billion consumers and the pressure on this planet resources.
Borys Pawliw
Extraction costs are still a little on the high side – varying from US$28 per barrel to US$92 for some of the worst ones, but the costs of this technology are falling ~2-3% per annum, so the outlook is good. It will require many conditions for us to go back to oil at <$50 per barrel, but really, the US is in the box seat now: energy independence for all intents and purposes, and soon the ability to export energy. No wonder Russia's days in the sun are looking less likely.
Muhammad NaIya
A little too conjunctive I'd say. The costs associatesd with biofuels and the shale oil simply means they cannot compete with the current producers of fossil fuels. Besides, the technology needed to replace the systems in use is still somewhat prohibitive.
The best option still remains a sensible use of the fossil fuel with investments in R&D to replace the fossil fuels where ever that is economically feasible even though the current economic cisis in the US and the EU makes that most unlikely for the foreseeable future and thats essentially because the voters are likely to revolt at any price shocks..
Wally
I love you Pharaoh Hussein, Smart and Handsome Offspring of the Sun God and all honour and praise to your Divine Consort Michelle, Mother of the Nation.
All hail!
Matthew Hall
This will reduce America's trade deficit as well.
Adam
Not until the Republicans with conservative leadership are in charge for twelve straight years, otherwise the Dems through the EPA will prevent any use of fossil fuels which will make us all poorer
Steve
Guaranteed the US govt will screw this up…