Published November 17 2012
Forum editorial: A brave, new world for energyA report last week that the U.S. will become the globe’s No. 1 oil producer by 2020 was startling and reassuring. It’s a startling statistic because a few years ago the U.S. was struggling to maintain supplies of crude oil that came mostly from overseas, some from hostile or unstable nations. It’s reassuring because an oil-rich United States and North America mean stability in energy markets and likely lower prices. Stable supplies and relatively low prices translate into economic strength.
The forecast came from the International Energy Agency. The agency assesses world energy supplies and the status of energy-producing nations. The indicators point to a stronger U.S. and North American energy sector, brought about primarily by new discoveries of oil and gas and the advance of drilling and recovery technologies.
North Dakota plays prominently in the forecast because of the Bakken shale oil play in the state’s western counties. The potential of the Bakken and associated formations in the region is astonishing. Using current state-of-the-art methods, including hydraulic fracturing (fracking), oil and gas drilling and production are expected to continue at a brisk pace for at least 30 years. As technology (horizontal drilling changed the picture) advances, more oil and natural gas will be recovered from formations some two miles below the surface of North Dakota, Montana and South Dakota.
What makes the global shift in the world’s energy picture so fascinating is that it’s happened so quickly. The IEA report suggests there is no North American slowdown on the horizon. After all, the agency expects the U.S. to become No. 1 only eight years from now.
If the No. 1 status is not surprising enough, IEA also believes the U.S. will become energy independent by 2025. Again, North Dakota’s role in achieving that benchmark will be pivotal because the state is not only producing more crude oil than ever before, it’s also sitting on reserves of natural gas that will change the picture for that increasingly favored fuel.
The IEA is one report, but other indicators confirm the optimism. The major players in North Dakota’s Bakken are making huge investments in mineral leases. Oil service and other companies associated with the development also are investing for the long term. The positive economic impacts – and other impacts not as positive – are changing the face of western North Dakota. The ultimate impact and consequences of such rapid development are yet to be determined.
Meanwhile, North Dakota’s part in moving the nation to energy self-sufficiency cannot be minimized. Americans might be in for an era of abundant and relatively cheap fuels, and that will translate into good news for families, businesses and, because of historic revenues, governments.
Forum editorials represent the opinion of Forum management and the newspaper’s Editorial Board.