Do you remember the Arab Oil Embargo of 1973-74? If you are too young, ask your parents or grandparents about it. They’ll tell you about the lines at gas stations, spiking prices, the fear that we were running out of fuel and only drastic measures would save our economy.
Liberal columnist Nicholas Von Hoffman wrote in the Washington Post at the time calling for a government takeover of the oil companies. “Nationalizing the whole thing is the only sensible thing to do. If we must have a planned economy, then we, not the major oil companies, should do the planning and the profiting. No socialistic government entity will do worse.”
We were in a panic, and understandably so. We were running out of oil and dependent on the volatile Middle East to feed our massive needs.
Fortunately, we did not follow Von Hoffman’s recommendation otherwise we may have ended up like Venezuela, destroying our ability to efficiently produce fuel. Smart people got busy figuring out ways to be more energy efficient, develop alternative energy sources and, most importantly, access energy reserves that appeared to be out of reach.
One of those smart people was George Mitchell. The Texan was in the natural gas business, and he was working hard to fine tune a technology developed several decades earlier called hydraulic fracturing.
Mitchell, an engineer and geologist, tried for 15 years to create the right mixture of liquids and pressure to free natural gas from shale. By 1997 he had figured out a way to operate a fracked well profitably.
The New York Times, in a profile of Mitchell, said, “In the end, Mitchell proved that there is no innovative force quite so powerful as the problem solver able to balance the world’s disbelief with a resolute belief in himself.”
We know what followed. Hydraulic fracturing has opened up massive reserves of natural gas and oil in the United States that were previously believed to be unrecoverable.
According to a story in the Sunday New York Times, the fracking revolution is “transforming unlikely places like North Dakota and New Mexico into world class petroleum hubs. Pipelines are being built across Texas to serve ports where oil can be pumped onto tankers headed for China, India and other markets.”
“This year, the United States is expected to surpass Saudi Arabia and to rival Russia as the world’s leader (in oil production), with record output of over 10 million barrels a day, according to the International Energy Agency,” the paper reports.
The Times story focuses on oil production, but we know what’s happening in northern West Virginia, eastern Ohio and southwestern Pennsylvania. Hydraulic fracturing and horizontal drilling are opening vast reserves of cheap natural gas that can be shipped to power plants, exported as LNG or used closer to home as a feedstock for manufacturing.
This would have been pure fantasy a few short years ago. However, thanks to technology and innovation, in a relatively short period of time the United States has shifted from a nation dependent on foreign energy to a net exporter of gas and oil.
The result is low, stable energy prices at home and increased global influence.