Someone asked me the other day to name the first president I voted for. My answer: “Abraham Lincoln.”
That’s a joke, of course, but it does illustrate a point: At 85, I’ve witnessed a lot of history. I’ve spent 60 years of it in the oil and gas industry, and while I’ve seen a lot of ups and downs in that sector, the state of the oil and gas industry has never been stronger. Less than a decade ago, a pervasive theory marked the industry, and it was one of global “peak oil.” I was a member of that club, believing U.S. oil production had “peaked” in 1970 and were in irreversible decline here, and elsewhere.
How wrong we were. The industry, driven by the innovation that marks private enterprise, has – once again – innovated. With stunning technological advances (chiefly the combination of fracking and horizontal drilling), we now have more energy reserves that any other nation on earth. Not only that, we have the cheapest in the world, too.
Today, the oil and gas business is the most dynamic industry in America. Unfortunately, they are still targeted by Washington, DC, as villains and increasingly blamed for everything from profiteering to earthquakes. If you want to blame that industry for anything, blame it for creating too many jobs.
Consider these statistics:
•The nation’s lowest unemployment rate – 2.7 percent – is in North Dakota, home of the Baaken oil field.
•Oilfield employment is so high in North Dakota that housing is in short supply, with rents in Williston, a city of only about 15,000 people, topping those in New York City and Los Angeles.
•Midland, Texas, an oil and gas hub, has become one of the wealthiest towns in North America.
•The oil and gas industry is now responsible for 10 million jobs, both direct and indirect.
U.S. oil production is up sharply, about 60 percent over the past five years, and growing. Because of this, we have begun to see a slow but steady drop in our OPEC oil dependence. Sadly, this has little impact on American oil consumers. Oil today is a global commodity. They are still paying a high price at the pump because prices are set in a global market. The surge in U.S. production doesn’t change this. The Saudis need $100/barrel oil to meet social commitments. They’ll get it, if necessary, by lowering supplies. Russia moves into Ukraine, and oil prices jump $3/barrel. We’ll see this more and more as we go forward.
The oil industry is leading America, despite Washington and its continuing inability to take advantage of it with long-term planning. Our energy policies are tied to 40-year-old reactions to the Arab oil embargo. The U.S. energy picture has changed. We should demand a U.S. energy policy that reflects that.
Until that happens, my fear is this: While I believe U.S. oil and natural gas producers should have the right to export to higher value markets, I’d rather keep this energy here at home. Why rebuild Europe and Asia’s economies on the backs of our cheap energy? Let’s use it to rebuild our own.
T. Boone Pickens
Film at 11....
