By WSJ Editors
Sometimes the
revolution politicians seek isn't the one they get. Consider the irony—and the
opportunity—in Monday's report that the U.S. is likely to surpass Saudi Arabia
as the world's largest oil producer as early as 2020.
In its annual
world energy outlook, the Paris-based International Energy Agency (IEA) says
the global energy map "is being redrawn by the resurgence in oil and gas
production in the United States."
The U.S. will
increase its production to about 23 million barrels a day in 10 years from
about 18 million barrels a day now, the IEA predicts. That's more optimistic
than current U.S. government estimates and a change from a year ago when the
IEA said Russia and the Saudis would vie for number one.
As readers of
these pages know, the key to this U.S. energy boom has been technological
innovation and risk-taking funded by private capital. Specifically, the private
oil and gas industry pioneered the use of horizontal drilling and hydraulic
fracturing (or fracking) to tap unconventional deposits such as shale that once
were technologically out of reach. It also wouldn't have happened if the
industry wasn't able to drill on private land, free from federal regulation.
This is a real energy revolution, even if it's far from the renewable
energy dreamland of so many government subsidies and mandates. In his 2007
State of the Union, George W. Bush—the Oil Man President of liberal myth—said
America was "on the verge of technological breakthroughs that will enable
us to live our lives less dependent on oil."
His main solution: "We must continue investing in new methods of
producing ethanol—using everything from wood chips to grasses to agricultural
wastes." The wood-chip revolution remains nowhere in sight, though that
didn't stop President Obama from doubling down on the taxpayer investment in
renewables, with similarly failed results.
The fad also caught on in Britain, with Conservative Prime Minister David
Cameron promising a "Green Deal" that was supposed to make the U.K. a
world leader in all things green. After two and a half years in office, Mr.
Cameron has little to show for it besides rising energy prices for consumers
and a burgeoning collection of subsidy-dependent wind farms.
One point to keep
in mind is that this U.S. energy revolution wasn't inevitable and could still
be undone. The Sierra Club and other environmentalists are demonizing fracking
the way they have coal, never mind that increased use of natural gas instead of
coal is helping to reduce carbon emissions. They hate
carbon energy—period.
New York state has
imposed a moratorium on fracking, even while the economy of neighboring
Pennsylvania is being transformed by the exploitation of the Marcellus Shale
that lies under both states. The French, who import 98% of their natural gas,
have also banned fracking, despite sitting on shale reserves estimated to be
the second-largest in Europe. The British, unsure of what to do, are supposed
to make a fracking announcement sometime next month.
The biggest
potential threat may come from federal regulation in Mr. Obama's second term.
Though he tried to take credit for the fracking revolution in his second debate
with Mitt Romney, his EPA has long wanted to supplant state regulators and will
grab any opportunity to do so. Perhaps the election of pro-fracking Democrats
like soon-to-be Senator Heidi Heitkamp of North Dakota (home to the monster
Bakken Shale field) can give the new energy revolution some needed bipartisan
buy-in.
Historians will
one day marvel that so much political and financial capital was invested in a
green-energy revolution at the very moment a fossil fuel revolution was
aborning. But politicians failing to spot the trend until they start taking
credit for it is an old story. Let's hope they don't ruin it now that they've
noticed.
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