Domestic oil and gas euphoria is getting out of hand – China Tank Rotator – Welding Turning Rolls

The boom in U.S. oil and gas production has spawned another gusher of increasingly hyperbolic claims about its revolutionary consequences. These are not just musingsfrom the fringe; they re increasingly becoming conventionalwisdom, and not just among people who usually pay attention to oiland gas. An essay by David Ignatius in the May 4 Washington Post , which relies heavily on analysis from Robin West, distills andenthusiastically endorses the emerging CW. I have a lot of respectfor both men, but many of the claims that they and others areadvancing have become detached from basic economic and geopoliticalreality.

I want to go through the Ignatius piece carefully andexplain why. The central claim that Ignatius makes is simple: Dependence onforeign energy, with the threat of supply disruption, has beenone of America s greatest economic vulnerabilities in recenttime, but is on the way to being reversed. The figures he presents to support these claims are ambitious butlargely defensible. Because of the rapid expansion of oil and gasproduction from shale, he notes, America is likely to become by2020 the world s No.

1 producer of oil, gas and biofuels. West,he reports, explains that the natural-gas boom will mean adramatic change in energy imports and, thus, the security of U.S.energy supplies. He forecasts that combined imports of oil andnatural gas will fall from about 52 percent of total demand in 2010to 22 percent by 2020. This strikes me as a bit garbled — it istough to see how the gas boom gets you there by 2020 when theUnited States barely imports any gas in the first place — but thebroader point, i.e. that oil and gas imports could fall from 52 to22 percent of consumption by the end of the decade on the back ofhigher oil output and lower consumption, is not unreasonable. Welding Positioners

But this is no justification for the claims that follow: This is the energy equivalent of the Berlin Wall coming down, contends West. Just as the trauma of the Cold War ended inBerlin, so the trauma of the 1973 oil embargo is ending now. Thegeopolitical implications of this change are striking: We will nolonger rely on the Middle East, or compete with such nations asChina or India for resources. This sort of assertion has become increasingly commonplace amongsmart people. A few weeks ago, the CEO of Pioneer Natural Resources told the New York Times that To not be concerned with where our oil is going to come fromis probably the biggest home run for the country in a hundredyears. China Tank Rotator

Other examples abound. Yet I cannot for the life of me figure out the foundation of theseclaims. How does a shift from 52 to 22 percent import dependencetranslate into a fundamental reversal in vulnerability? After all,in 1973 itself, only 15 percent of U.S. oil and gas consumption (and only 26 percent of oil) camefrom imports. Welding Turning Rolls

If 1973 ushered in a new age of energy insecurity, itis tough to see how a fall in imports to a level still higher than the 1973 one would reverse that.

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