Very Soon America Will Not Need Any OPEC Oil Increased domestic production and more imports from Canada will create virtual energy independence

By Paolo von Schirach

June 4, 2013

WASHINGTON – America is producing a lot more oil. In fact, this year it will produce more than half of its total (roughly 19 million barrels a day) consumption, this way reversing what seemed to be until not too long ago an irreversible domestic production decline. If we combine increased US oil extraction, (due mostly to shale oil in Texas and North Dakota), improved efficiencies and more imports from oil rich Canada, we get an entirely new American energy security scenario.

No more vulnerable

All of a sudden a major strategic vulnerability, (remember the impact of the 1973 oil embargo and of the 1979 revolution in Iran?), becomes far less significant. True enough, unless we quickly find a new non petroleum based automotive fuel, America will continue to depend on oil for decades to come. That said, where the badly needed crude comes from makes a huge difference.

More oil at home and from Canada

Producing more of our own oil is good. It means we need to import less. Getting more of what we need to import from Canada, as opposed to OPEC countries, is also very good. Canada is stable, friendly democracy. It is a neighbor, and this means that it is easier and faster to get oil from Alberta than from half way around the world. Besides, we can rest assured that there will never be an oil embargo affecting imports from Canada.

Middle East will become less important

Looking into the future, little or zero US dependence on Middle Eastern oil is bound to have huge geopolitical repercussions. It is no mystery that America’s deep engagement in Middle Eastern affairs is largely tied to the strategic value of all the oil owned and produced by Saudi Arabia, Kuwait, Iraq, Iran and others. The US keeps the Fifth Fleet in Bahrain, at a cost of roughly $ 50 bln per year, largely as a deterrent against any attempts to disrupt the flow of oil through the Strait of Hormuz.

Clearly, the strategic relevance of the Region as a key energy supplier to the rest of the world will not disappear any time soon. But the direct relevance to the United States economy and therefore to US national security is bound to be diminished, once America no longer needs any of that oil.

More relaxed about future crises

Obviously as a global power America will continue to be interested in securing the unhindered  flow of Gulf oil to key allies such as Europe and Japan. But when America will no longer depend directly on that oil, its approach to future Middle East crises or to ongoing issues, such as the endless Israel-Palestine imbroglio, is likely to be much more relaxed. How much more relaxed it is difficult to say. But it is probably fair to say that what may be viewed today as an “urgent matter” tomorrow ill be downgraded to “important issue” requiring review and consultations.

Retreat into isolationism?

In other words, energy independence will justify a much more restrained American posture on any issue, present and future, affecting the Region. One might argue that newly conquered US energy independence may become a rationale for withdrawing into isolationism. And this may not be all that good. We shall see what American leaders will do in the next few years.

Still, energy self-reliance, (or quasi self-reliance, if we consider imports from Canada and other Hemispheric suppliers such as Mexico and Brazil), is great news for America. It is good for our national security, for our economy and for our balance of payments. 

 

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