“Saudi America.” Has a kind of nice ring to it, but is it really a possibility that the United States could produce enough oil to not only create its own energy independence but even outpace oil king Saudi Arabia?
It’s not as outlandish as it may sound. For starters, Texas now produces more oil than the U.S. imports from Saudi Arabia. Then there’s the recently doubled estimates of recoverable energy in North Dakota’s Bakken and Three Forks shale formations. And, according to the International Energy Agency (IEA), the U.S. is on track to surpass all Saudi Arabia oil output by 2017.
More Like Saudi “Americas”
While it’s nice to think of the U.S. surpassing Saudi Arabia to secure its energy independence and security, it’s likely that the U.S. will need the support and partnership of its neighbors to the south and north. The Americas form an increasingly intimidating energy alliance that will provide more stability and balance to global energy markets.
Canada, for its part, has the world’s second largest proven oil reserves and is the world’s third largest producer of natural gas; Mexico ranks seventh on the world oil scene.
Fostering healthy relationships between North and South American oil and gas industries is key to ensuring energy security in the West, and the beauty is that these beneficial relationships are already there. The U.S. enjoys more equitable trading partnerships with Canada and Mexico than it does with countries in the Middle East, with Canada “buying back” about ninety cents of every dollar in goods and services that the U.S. buys from Canada and Mexico exporting most of its oil production to the U.S., then importing 60 percent of its gasoline back from the U.S. oil exporting countries in the Middle East buy back less than a third of what Canada buys back from the U.S.
U.S. Not the Only Horse in This Race
America’s partnerships and oil and gas estimates all favorably position the U.S. to one day achieve this dream of a Saudi America, but there are no guarantees. The U.S. isn’t the only country trying to free itself from dependence on imports from hostile foreign countries.
China, for one, has not only the estimated reserves but the strategic wile and power potentially derail America’s best-laid plans, even if that’s not what China intends. Is China buying interests in oil and gas companies in the U.S. and Canada simply because they’re good investments, or to learn from North American operators, or to position itself to win export contracts, particularly from Canada, that would certainly be beneficial to China but weaken America’s energy security?
These are valid concerns, as Chinese oil companies operate with the backing of the Chinese state. For precisely this reason, China’s recent deal with CNOOC raised red flags. A recent deal in Canada raises red flags because it increases China’s influence over American access to Canada’s reserves.
With 20 percent of U.S. oil flowing from Canada, it’s no wonder any deal that could increase China’s influence over American access to Canada’s reserves is worrisome.
No Guarantees, Especially if U.S. Can’t Get Out of Its Own Way
Of course, our North American alliances and any perceived or real threats to American energy security from other nations amount to nothing if the U.S. government refuses to get out of its own way when it comes to encouraging rather than hobbling the oil and gas industry. From fracking to pipelines to storage facilities, the industry faces a constant barrage of protest and intense scrutiny that inevitably leads to yet more regulations and cost-increasing requirements.
As anyone in the oil and gas industry understands, it doesn’t matter that there’s plenty of data that weighs in favor of the industry. Whether it’s the University of Texas at Austin report published in 2012, “Fact-Based Regulation for Environmental Protection in Shale Gas Development,” or the 2011 Duke University study, or even research conducted by environmental groups themselves, if it doesn’t scorch the earth with data supporting the persistent claims of industry opponents, it’s not seen as credible. Incredibly.
Unfortunately, anti-everything groups continue to make unsupported claims, pumping out hyperbole and outright lies that the media just adores and our elected officials cannot ignore, no matter how spurious.
Will any of this stop America’s quest for energy security and independence. Of course not. We’re Americans, and the American response to anything that sounds like “no” is “oh, yes, we can!” There’s a reason we call it an “American dream,” and that’s because this is a place where dreams do come true, even dreams of energy independence.
Written By Insider CHRIS FAULKNER>Chris Faulkner is the Founder and CEO of Dallas-based Breitling Energy Companies, the holding company of Breitling Oil and Gas and Breitling Royalties, which he also founded and serves as CEO. The companies are in the oil and natural gas exploration, production and investment business. Mr. Faulkner’s diverse and extensive background in the oil and gas industry in North America, Europe and the Middle East covers all aspects of oil and gas operations, including project management, production, facilities, drilling and business development. Mr. Faulkner serves as an advisor to the ECF Asia Shale Committee and sits on the Board of Directors for the North Texas Commission.