That is the position taken by ConocoPhillips CEO Ryan Lance in telling an audience in Vienna that included OPEC oil ministers on June 13, 2012. Can North America really become oil independent by 2025? Most experts agree that this assessment is rather overly optimistic, but a growing body of evidence is suggesting that if not by 2025, that day is not too far off.
Since 1990, unconventional proven reserves have grown by an astounding 68%, and the trend is widely expected to continue into the future, even by conservative estimates. U.S. oil production has grown by a phenomenal 25% since 2008 and the U.S. can boast of the highest growth rate of any oil producer outside of OPEC. Oil imports have dropped to a low of 42% of total consumption, compared with 60% as recently as 2005.
There are several factors that contribute to how US can become oil independent by 2025
- Technology: Hydraulic fracturing, or fracking, was a technology that was originally developed for gas prospecting, but now is widely used for oil as well. Fracking is still controversial in certain communities due to environmental concerns, but welcomed in most. This technology allows oil to be extracted from previously unreachable formations, such as tight rock formations, and has transformed the energy landscape, with North Dakota alone currently producing 600,000 barrels a day, compared to 10,000 barrels just ten years ago.
- Bio-Fuel: Production of biodiesel has fairly tripled in 2010, whereas ethanol production increased from 700,000 barrels a day in 2007 to a breathtaking 900 Million barrels a day.
- Gas efficiency: Fuel efficiency keeps increasing as MPG keeps improving, and the two increases in CAFÉ standards since 2009 have yet to take full effect.
- Of course, a conservative estimate puts North American oil production at 15 to 18 Million barrels a day by 2035, still a substantial increase from 11.4 Million in 2011, but significantly short of the 21 Million Barrels consumed by the U.S. and Canada last year.
- It has furthermore been pointed out that North American oil independence does not mean isolation or separation from the global oil market, although the implications can be dramatic and far reaching in geopolitical terms. The balance of power will most likely shift in favor of North America and further away from OPEC.
ConocoPhillips CEO Ryan Lance seemed to have hit a raw nerve point, as he noted that if the technology deployed by the U.S. can be duplicated by China, Latin America, and others, the transformative potentials will be enormous.
It has also been predicted that the new energy landscape will support some 1.5 Million jobs in the U.S. by 2015.