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Fuel Freedom Staff

Cobb: Narrative of American oil self-sufficiency ‘is about to take a big hit’

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Kurt Cobb, who writes about energy and the environment, has a piece in The Christian Science Monitor about how OPEC is targeting the U.S. shale-oil “revolution.’

Cobb says it was folly for some proponents of U.S. drilling to think that oil would remain above $100 a barrel indefinitely. At $70, U.S. operations aren’t profitable enough to remain at that output level.

Cobb begins:

To paraphrase Mark Twain: Rumors of OPEC’s demise have been greatly exaggerated.

Breathless coverage of the rise in U.S. oil production in the last few years has led some to declare that OPEC’s power in the oil market is now becoming irrelevant as America supposedly moves toward energy independence. This coverage, however, has obscured the fact that almost all of that rise in production has come in the form of high-cost tight oil found in deep shale deposits.

The rather silly assumption was that oil prices would continue to hover above $100 per barrel indefinitely, making the exploitation of that tight oil profitable indefinitely. Anyone who understood the economics of this type of production and the dynamics of the oil market knew better. And now, the overhyped narrative of American oil self-sufficiency is about to take a big hit.

Fuel Freedom Staff

Pickens: We’re still ‘dangerously dependent’ on OPEC

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Politico gathered some of the nation’s most influential players in the energy and national-security realms to discuss what we should do next about the sudden drop in global oil prices the past four months.

Among the heavy hitters are Amy Myers Jaffe, executive director of energy and sustainability at UC Davis (and a star of PUMP, the movie); environmentalist Bill McKibben; and geopolitical expert Ian Bremmer. But possibly the starkest commentary comes from magnate T. Boone Pickens, founder and chair of BP Capital. His entry in the roundtable is called “A False Sense of Energy Security,” and here’s an excerpt:

The key for America is that we shouldn’t let ourselves get distracted by falling oil prices when there is much more at stake. For decades, our dependence on OPEC oil has dictated our national security decisions and tied us up in the Middle East at an incredible price. We’ve spent more than $5 trillion and thousands of American soldiers have died securing Middle East oil. … it is critical that we not let ourselves lose sight of the problem and continue expanding American energy production. We have OPEC on the run, but we are still dangerously dependent. We have the domestic resources, but we need to demand that Washington get serious about a national energy plan that takes the real costs of energy into account. We cannot get sidetracked by a false sense of enhanced energy security and lower gasoline prices.

(Photo credit: Albert H. Teich/Shutterstock)