Global oil prices recently edged upward but still hover around $45 a barrel. Some observers blame the two-year slump on a conspiracy by Saudi Arabia, its allies in the Middle East and OPEC to sabotage the American energy industry. And they may soon find more ammunition for their argument. According to Norway-based Rystad Energy, an oil and gas consulting firm, the U.S. has the world’s largest reserves of oil when accounting for shale oil.
When accounting for proven reserves, U.S. oil deposits are dwarfed by Russia and Saudi Arabia, and barely edge out Canada. But even with the numbers behind what Rystad’s analysts call a conservative estimate, when the total amount of proven, probable and “most likely estimate” of oil fields yet to be discovered are tabulated, the U.S. edges out Russia by just over 3 percent. Over half of the estimated U.S. oil reserves are in what the energy industry describes as unconventional shale oil — Texas is home to 60 billion barrels of shale oil alone.
Such news will cheer the Obama administration, which has been criticized by the left and right over its “all-of-the-above” energy policy. And while Americans’ affection for cheap goods has long caused a trade imbalance with China, which in part explained the rise of Donald Trump and Bernie Sanders during this year’s presidential campaign, U.S. oil exports to China have surged. The U.S. Energy Information Administration (EIA) estimated that such sales set a record in April with over 7.8 million barrels of oil shipped to China.
For advocates who insist that the U.S. transition to a low-carbon economy, such news is discouraging, and will cause the “keep it in the ground” movement to scream even louder. Nevertheless, market trends suggest electric cars still have a future, cheap oil aside. Yes, low gas prices have resulted in an uptick in sales of larger cars and SUVs. But in fairness, gas and diesel cars overall have become far more fuel efficient than in years past. Meanwhile, despite their fits and starts and the occasional bad press, sales of electric vehicles are growing — and are projected to continue doing so in the long term.
Think of electric car sales as analogous to the emergence of organic foods. They are now a small part of the industry’s overall portfolio, but consumers are catching on. As their overall range increases, consumers will continue to gravitate toward electric cars not necessarily out of concern over gas prices (which could spike at any time, as history shows), but over their torque, reduced maintenance needs and improved road handling.
Transportation still accounts for the bulk of U.S. greenhouse gas emissions, but an interesting trend is going on. Just as how it sounds insane to be able to tax less and spend more — the holy grail of American politics -- so, too, is the prospect of harvesting more fossil fuels while reducing the country’s carbon footprint. Amazingly, however, the U.S. is pretty close to accomplishing that, based on U.S. Environmental Protection Agency (EPA) data. With the cost of renewables falling and more U.S. corporations investing in clean energy, the U.S., to its credit, is pulling quite an astonishing feat thought to be impossible earlier this decade.
Image credit of Kern River Oil Field: Hamish Reid/Flickr