2008 was a bleak year for American energy. Domestic oil production barely exceeded 5 million barrels per day—the lowest level since 1946—continuing a slow decline that began in the mid-1980s. Of course, our demand for oil continued to grow, so to make up for lost domestic production and to continue economic growth, imports necessarily grew. In 2008, we imported 10 million barrels per day (MMbbl/d), approximately two-thirds of total consumption, with much of it coming from unfriendly and unstable foreign sources. Everyone understood the problem, and there was much talk of a need for new national policies to achieve “energy independence,” but the consensus was that achieving such independence was little more than a pipe dream.
While policymakers debated these ideas in Washington, entrepreneurs were putting risk capital and innovation to work on a solution that would change the world. It came in the form of two complementary techniques—hydraulic fracturing and horizontal drilling—applied to shale rock formations containing previously hard-to-access oil and natural gas. The combination worked, and soon after the race was on to reverse decades of energy production declines.
The rest, as they say, is history. Last year, the U.S. surpassed Saudi Arabia and Russia to become the world’s top oil producer. As the animated chart below illustrates, this rise to the top was rapid and remarkable.
America’s newfound status as a global energy superpower has created economic opportunities here at home and stability around the world. Thanks in large part to the shale revolution in oil and gas, our energy security also has improved tremendously. Our most recent Index of U.S. Energy Security Risk shows improving energy security each year since 2011, and unprecedented streak. We expect that once the numbers are in for 2018, it will be the lowest (i.e., best) index score on record.
The best news is, we are just getting started. Instead of importing ever-growing amounts of oil, we are now rapidly growing American oil exports. In fact, next year, net energy imports will likely fall below zero—that is, the United States will be a net energy exporter— for the first time since 1952 (we will also become a net oil exporter next year as well). That’s not all. The federal government’s most recent energy forecast has U.S. crude oil production increasing past 13 MMbbl/d by 2020 and exceeding 14 MMbbl/d by 2025, which it is projected to stay above through at least 2040.
All of this means we are in a much better position to deal with the inevitable, if unpredictable, energy-related crises that crop up around the world. This story of how risk-taking and technological leadership are powering a transformation of our economic and national security is the embodiment of the “Stronger” aspect of GEI’s “American Energy: Cleaner, Stronger” initiative.