In 2005, 60% of all petroleum consumed in the U.S. came from imports. The conventional wisdom then and for several years thereafter was that America was fated to become ever-more-dependent on increasingly costly petroleum imports.
Peak oil alarm was in vogue, popularized by books such as Peak Oil Survival: Preparation for Life after Gridcrash (2006), Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (2006), A Crude Awakening: The Oil Crash – We’re Running Out and Don’t Have a Plan (2007), Hubbert’s Peak: The Impending World Oil Shortage (2008), and Confronting Collapse: Energy and Money in a Post Peak Oil World (2009).
M. King Hubbert, the originator of peak oil theory, correctly predicted in 1956 that U.S. domestic petroleum production would peak between 1965-1970. He also forecast a peak in global production by the late-2000s. In 2008, many commentators interpreted spiking crude oil prices as confirmation of Hubbert’s theory.
But Hubbert, who died in 1989, did not live to see the “shale revolution.” During the past decade, advances in directional drilling and hydraulic fracturing have made it economical to extract oil from the pores of rock. Although U.S. petroleum production is still lower than it was at its peak in 1970, it has increased every year since 2008 with no end in sight.
Citi GPS, a highly respected analytic group, argues that “surging supply growth” from fracked shale formations, deep-water wells, and Canada’s oil sands could “transform North America into the new Middle East by 2020.” Peak oil, if it exists at all, is likely decades away, not around the corner, as the books cited above assumed.
Basically, there’s more of the same. Already by 2010, more than half of all the oil we consumed came from the U.S. But whereas the balance then was 51% domestic and 49% imports, the balance as of 2012 was 60% domestic and 40% imports (exactly the reverse of the percentages in 2005).