Separating reality from ideology and political agendas is difficult, but essential, if we are to revitalize our economy and help the world’s poorest families take their rightful places among Earth’s prosperous people. Energy reality is certainly in our favor. But ideological forces are powerful and persistent.
Right now, 82% of all US energy and 87% of world energy comes from oil, natural gas and coal. Less than 3% is non-hydroelectric renewable energy – and globally half of that is traditional biomass: wood, grass and animal dung that cause millions of respiratory infections and deaths every year. Thankfully, the transition to fossil fuels and electricity continues apace, replacing biomass and lifting billions out of abject poverty, with wind and solar meeting basic needs in remote areas until electricity grids arrive.
In the USA, hydraulic fracturing has taken petroleum production to its highest level since 1972, and oil imports to their lowest level since 1995. America now exports crude oil, natural gas and refined products.
The fracking genie cannot be put back in the bottle. In fact, it is being adopted all over the world, opening new shale oil and gas fields, prolonging the life of conventional fields, leaving less energy in the ground, and giving the world another century or more of abundant, reliable, affordable petroleum. That’s plenty of time to develop new energy technologies that actually work without mandates and enormous subsidies.
So much for the “peak oil” scare. Indeed, in some ways, the world’s current problem is too much oil.
In the face of this global abundance and tepid American, European, Chinese and world economies, Saudi Arabia has increased its oil production, to maintain market share and try to drive more US oil companies out of business. Oil prices have plummeted from $136 per barrel in 2008 to less than $35 or even $30 today. Natural gas has gone from $13.50 per million Btu in 2009 to $3 or less today.