The American Interest
Analysis by Walter Russell Mead & Staff
The North American Energy Boom A New Energy Juggernaut Emerges

Canada has its oil sands, the United States has its shale boom, and now Mexico has its energy reforms. Add those three recent energy trends together, and you’ve got yourself a recipe for a North American energy powerhouse. The Energy Information Administration (EIA) just released an early version of its 2014 Annual Energy Outlook (AEO) this week, and its projections for American oil and gas production were even rosier than expected. Below you can see just how much more optimistic the EIA was with its predictions.

AEO2014

Oil production is expected to hit a near-record high 2019 before tapering off as shale plays mature, but the level of production is significantly higher than previously projected (22 percent higher in 2019). Natural gas production is looking even better, as a relatively stable level of growth is expected to continue through 2040, the last year of the AEO’s projections. This new projection for the cumulative production of American natural gas through 2040 is a whopping 11 percent higher than last year’s account.

If that was all the encouraging data we had to show you, it would still be plenty to celebrate. But there’s more. Consider the following charts:

E40EE1EA-09D7-4BF2-A3F9-52CF81D9EA4D@myhome.westell.com

Charts courtesy of Lindsey Burrows

Gains in North American oil production are projected to outpace those made by OPEC. North America’s share of global oil production is increasing, and that’s not only good for business, it’s good for energy security. We’ll never be truly energy-independent so long as we power our countries with such a globally-traded commodity as oil, but decreasing our reliance on foreign sources of oil opens up new foreign policy options and makes us more resilient to price shocks brought on by events in far-flung places.

No one could have predicted such an optimistic outlook for American and North American energy even 10 years ago, but technological progress and now political reforms are now reshaping the continent’s prospects in the 21st century.

Published on December 17, 2013 5:30 pm
  • rheddles2

    And it was done by the private market with virtually no contribution by the government which continues to slow walk, if not deny, permits.

    • Jim__L

      Just think how fast America will shoot forward once this administration and its destructive ideology is consigned to the recycling bin of history!…

      • Andrew Allison

        Assuming it hasn’t succeeded in completely destroying the economy before it goes.

        • Jim__L

          I guess I just have more faith in the ability of Americans to recognize and reverse disastrously mistaken decisions.

          The alternative is too grim to contemplate.

  • TommyTwo

    As an aside: while I consider the US becoming nominally “energy-independent” to be very good news, the second chart clearly shows how OPEC will continue to be critically important. Should the flow of oil to Europe, Japan, or China be impaired, the calamitous consequences will not spare the US.

  • Jacksonian_Libertarian

    I think the oil production for Mexico is vastly over estimated. Pemex oil production is in decline, and while Mexico has passed new laws, there is serious doubt that any oil drillers with their proprietary fracking technology will be interested in developing Mexico’s oil (Mexico has a history of theft/nationalization). Until there is actual drilling and an increased production in Mexico, the trend is the reality, and the trend is down.

  • crocodilechuck

    Keep your shorts on, Walt.

    63% of total oil production globally comes from one tenth of 1% of wells. These are the ‘mighty giants’: Ghawar, East Texas Oil Field, Cantarell………..OOOPS! Cantarell now < 5% of its peak output. When these go (there's a reason why Mexico is no longer the USA's biggest supplier) there will be no replacing them.

    Oh, and instead of breathing your own hyperventilating fumes, better to keep an eye on the 'smart money', and see what they're actually doing (Royal Dutch Shell, in this example):

    http://resourceinsights.blogspot.com.au/2013/12/watch-what-we-do-not-what-we-say-shell.html