Perhaps you read the USA Today editorial on August 19 that concludes with: “the most important gains could come from radical shifts that are as unanticipated as was North America's emergence as an oil and gas powerhouse.” It points out “that free enterprise has a way of solving problems that is beyond the capabilities of government.” And continues: “The surge in domestic oil and gas production—spurred on by such new techniques as hydraulic fracturing (or ‘fracking’) did not come about as the result of government energy polices, but largely in spite of them.”
Other oil producing countries are taking note.
Mexico has huge oil-and-gas reserves— estimated at 115bn barrels of oil equivalent, comparable to Kuwait’s—but lacks the technology to develop non-conventionals, such as shale gas and deep-sea crude. President Pena Nieto is looking to make reforms that would allow foreign companies to partner with the state-owned oil company, Pemex, to bring the wealth to the surface.
The Saudi Prince Alwaleed recently warned: “the kingdom's oil-dependent economy is increasingly vulnerable to rising U.S. energy production.” Alwaleed’s comments were penned before Mexico announced its intended energy reforms. The thought of Mexico’s resources flowing on to the global market has got to make the prince increasingly nervous.
The reality of North America becoming an “oil-and-gas powerhouse” threatens more than just OPEC nations. In response to the USA Today editorial, Frances Beinecke, president of the Natural Resources Defense Council (NRDC), wrote an “opposing view” proclaiming: “Increasing domestic oil and gas production is no panacea for our nation's energy needs or economy.”
Energy and the Economy
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