US on record to achieve highest level of energy independence since 1990

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Michael Bastasch DCNF Managing Editor
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The United States is on track this year to attain record levels of domestic production of fossil fuels, making the country the most energy independent it has been since 1990.

If present trends continue, the U.S. will produce more than four-fifths of the energy it consumes.

These high production levels stemmed from the expanded use of hydraulic fracking and horizontal drilling to get at the country’s vast shale resources, and has made the U.S. the most energy independent since 1991, according to Dr. Mark Perry, economics professor at The University of Michigan and scholar at the American Enterprise Institute.

“It’s hard to overestimate the significant beneficial effects of the shale revolution on the U.S. economy over the last five years,” writes Perry.

“And the timing of the shale gale couldn’t have been better,” Perry continues. “Just as the financial crisis, housing bust, and mortgage meltdown were starting to cripple the U.S. economy in 2008 during the onset of the Great Recession, the shale revolution and domestic production of oil and gas were just taking off in places like North Dakota, Texas and Pennsylvania.”

Domestic production of fossil fuels is projected to be more than 61 quardrillion BTUs of coal, natural gas and crude oil and even beating out last years fossil fuel production record of 60.66 quadrillion BTUs of fossil fuels. The U.S. is projected to produce 83.3 percent of its total energy consumption this year. In 1990, the U.S. produced 83.7 percent of its total energy consumption.

The vast majority of the oil and gas production in the U.S. has in fact come from drilling and development on private and state lands, while oil and gas production on federal lands has fallen.

“Leasing and permitting on federal lands have plummeted under Obama’s watch,” said Thomas Pyle, president of the American Energy Alliance, in a statement. “Under this administration, the leasing rate has slowed by about half, and the total amount of federal acres leased has fallen by 18 percent.”

According to the Congressional Research Service, 96 percent of the increase in oil production from 2007 to 2012 was produced on private and state lands. The Institute for Energy Research estimates that, 5.5 times more oil is produced per acre on private and state lands than on federal lands.

The Energy Information Administration reported that crude oil sales of production from Federal and Indian lands fell from 739 million barrels in 2010 to 646 million barrels in 2011 — about a 14 percent decrease — mainly due to the Obama Administration’s offshore drilling moratorium.

Natural gas production on state and private lands has also increased substantially as well, by 28 percent between 2009 and 2011. However, on federal lands, natural gas production fell by 27 percent over that same time period.

The EIA reports that “total natural gas sales of production from Federal and Indian lands have decreased each year since FY 2003.” In 2011, sales of natural gas production decreased 10 percent from 2010, and decreased 31 percent from 2003 levels.

Drilling from unconventional oil and gas sources, like shale, is estimated to support more than 1.7 million jobs in 2012 “at average wage levels dramatically higher than the general economy,” according to a new study by IHS Global Insight. The number of jobs supported by these drilling activities is expected to rise to nearly 3.5 million in 2035.

“An unconventional oil and gas revolution is under way in the United States, but its full ramifications are only beginning to be understood,” writes Daniel Yergin, vice chairman of IHS, in the Wall Street Journal.

“Half a decade ago, it was assumed that the U.S. would become a large importer of liquefied natural gas; now the domestic natural gas market is oversupplied, thanks to the ability to produce shale gas through hydraulic fracturing and horizontal drilling technologies,” Yergin added.

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