The United States, with its producers, is able to respond quickly to the increase in global demand, preventing a significant surge in crude oil prices.
America has gone from being an energy import in 2008 to becoming the world’s largest producer of crude oil and natural gas.
Cheap domestic gas has fueled an industrial renaissance in the US, visible in the petrochemical corridor that stretches along the Gulf Coast from Texas to Louisiana.
The “Rust Belt,” from Pennsylvania to Ohio, has been reborn as the “Plastics Belt.” The American Chemical Association says that the US chemical industry now exports $180 billion a year. Shale oil has spawned 351 projects since 2010, attracting a quarter of a trillion dollars in global investment in the petrochemical sector alone.
Kamala Harris called for a ban on fracking in 2019, but she quickly learned that no candidate can aspire to the White House with a position so far removed from geopolitical reality. He needed to win the 19 electoral college votes of Pennsylvania, home to the Marcellus Shale. After three and a half years as vice president, he backtracked, telling CNN, “We can grow a clean energy economy without banning fracking.”
Fifteen years ago, the U.S. was on its way to becoming the world’s largest importer of liquefied natural gas (LNG). It wouldn’t have been able to help Europe with gas after the invasion of Ukraine. But instead of competing for scarce global supplies, the U.S. has now overtaken Qatar to become the world’s largest exporter of LNG. That shift has added enough gas to world markets to more than offset the loss of Russian supplies to Europe.
Without fracking, Putin’s energy blackmail would have succeeded. Europe would have faced dangerously low gas reserves, chronic blackouts, and a freezing winter, with the possibility of an industrial collapse.
America’s shale industries have profoundly changed the global oil market. In 2008, the “American Century” seemed to be dying before our eyes. The US financial system was paralyzed, General Motors was on the verge of bankruptcy, and the dollar was in free fall. US crude production had collapsed to 5 million barrels a day, while America was importing nearly 10 million barrels a day, pushing the current account deficit to 6% of GDP.
The dystopian world of skyrocketing oil and gas prices was avoided. The US became a net oil exporter in 2020 for the first time since 1949. Crude oil production today is at an all-time high of 13.3 million barrels a day, set to reach 14 million by next year. The Permian Basin in Texas now produces more than Saudi Arabia’s giant Ghawar reserve.
The OPEC-Russia cartel has cut production to keep oil prices above $75 a barrel, but it can’t keep prices close to the $100 it needs to balance its budget. The United States, with its producers, is able to respond quickly to the increase in global demand, preventing a significant spike in oil prices and greatly reducing the hydrocarbon rent that the West must pay to autocrats.
Technology has improved the extraction process, making it so efficient that it competes with OPEC states. Exxon has said that the cost of production in the Permian Basin is below $35 a barrel.
Experts did not see this revolution coming. In 2008, the International Energy Agency did not even mention shale. It made a similar mistake with renewable energy, underestimating the reduction in costs and global expansion.
The United States, fueled by cheap energy, overcame the 2008 crisis, while China remained trapped in a dysfunctional model of Leninist capitalism.
The coming years will depend on the race for clean technology. With the Inflation Reduction Act, it seems that the United States is ready to win this challenge too.
Original article published on Money.it Italy 2024-09-27 07:13:00. Original title: Petrolio, come il fracking ha cambiato l’economia USA
