By ROBERT J. SAMUELSON, Sunday, April 1, Washington Post
Call it Richard Nixon’s revenge.
Amid election-year furor over high gasoline prices, something significant has happened to America’s energy outlook. We are steadily reducing our dependence on imported oil — a long-ago Nixon goal. In 1973, he proposed being free of imports by 1980. It didn’t happen, and although politicians of both parties frequently echoed Nixon’s popular call for “energy independence,” most experts considered it a joke.
Production from mature U.S. fields was declining, while Americans’ energy thirst increased. Oil imports went from 35 percent of use in 1973 to 60 percent in 2005. As for natural gas, companies prepared to import liquefied natural gas (LNG).
No more. The LNG isn’t needed; the United States is approaching self-sufficiency in gas. And in 2011, oil imports fell to 45 percent of consumption, the sixth year of decline. Behind these developments lies a new reality: America’s oil and gas reserves are far larger than previously thought.
The real issue — for the election and victor — is how aggressively we exploit these reserves. President Obama is right about today’s gasoline prices. They’re set in world markets subject to upsets (for example, erratic production from Libya and Sudan) over which we have little control. But the longer term is different. By encouraging production, we can enhance our energy security and help stabilize global markets — and prices — through greater supply.
First, some background on U.S. oil and natural gas resources: Start with gas. In 2000, U.S. supplies were estimated at about 1,000 trillion cubic feet (annual consumption: 22 trillion to 24 trillion cubic feet); now, estimates cluster around 2,000 trillion cubic feet, with some even higher. The increases mostly reflect shale gas, which was once believed too expensive to produce because it was packed tightly in formations. “Fracking” (injecting water into the formations to free the gas) and horizontal drilling (extending one pipe along the formation instead of drilling many vertical wells) lowered costs.