3 Ways the U.S. Has Changed the Global Oil and Gas Landscape
For a long time the oil and gas industry was mainly controlled by Middle Eastern countries and the Organization of the Petroleum Exporting Countries (OPEC), which was formed in 1960. Being an industrial nation with a high demand for these resources, the United States was essentially held hostage to fluctuating prices and availability at the whims of people who held natural aversion to American society. The 1973 oil embargo is the most notable example of OPEC wielding the power of oil and gas to their advantage in the political sphere.
The last decade or so has seen the U.S. take great strides in moving away from this dependency, both in terms of reducing the overall use of such resources, and by increasing our own production capabilities. Here are three of the biggest factors that have aided this.
1.) Offshore Drilling: Offshore drilling has increased dramatically over the years as technology has improved and allowed for easier and more efficient means to do so. Overall, it accounts for 30% of the global oil production and 50% of the natural gas. The U.S. has been one of the leading countries in mining these new sites. Today, we’re able to drill in water that’s over 7,500 feet deep and 200 miles away from shore.
2.) Hydraulic Fracturing: Perhaps the single biggest change in the oil and gas industry over the last 25 years has been the rise of hydraulic fracking. In 2013 there were two million oil and gas wells hydraulically fractured in the United States, according to the Department of Energy. Even more telling is the fact that about 95% of all new wells being drilled are being done by fracking. Sites like the Marcellus Shale in Pennsylvania and the northeast, and the Fayetteville Shale in Arkansas have contributed to the massive increase in crude production in America.
3.) New Opportunities: In some ways the two previous categories fall into this as well, but there are even more recent developments that have affected our foreign oil dependency. Recent moves by President Barack Obama have allowed the exploration and drilling in places like Alaska and the Arctic. Moves like this have helped the U.S. add billions of barrels worth of crude resources. In fact, in 2012 alone there was a 15.4% increase in barrels of crude oil and lease condensate proved reserves (4.5 billion barrels) as a direct result of oil and gas exploration and production companies.