Approval by the U.S. Energy Department of the use of a natural gas terminal in the Texas coast for natural gas exports to Japan demonstrates the stunning reversal of fortune of the U.S. energy industry, 1200 WOAI news reports.
Think about this---the Freeport Terminal on Quintana Island, near Galveston, was built just five years ago, for natural gas imports!
“We have really created a very large glut in supply of natural gas in the United States,” said David Blackmon, a respected oil and gas industry analyst in Houston.
And he says, we owe it all to the fracking boom.
Blackmon says just four years ago, people were freely expressing the now-discredited theory of ‘peak oil,’ the idea that the total amount of recoverable reserves of oil and natural gas had peaked, and was declining at a time when global economic growth was boosting worldwide demand.
But since then, fracking has opened up trillions of cubic feet of natural gas. The U.S. is already exporting large quantities of natural gas via pipeline to Canada and Mexico, but Blackmon says the use of the LNG terminal in Texas for major overseas exports of natural gas is truly a game changer.
“Any new markets that are created for it are a positive thing for the industry and the industries which rely on natural gas, like manufacturing.”
In fact, the natural gas boom is fueling a manufacturing boom in the United States, as cheap and reliable natural gas is prompting industries which moved manufacturing operations overseas in the 1970s and 1980s admit concerns about U.S. energy supplies to return those operations, so called ‘onshoring.’
“It is going to result in $71 billion in new plants and equipment being installed in this country in the next five years,” Blackmon said.
19 more applications to use terminals for natural gas exports are pending with the Energy Department. Many have been opposed by environmental groups which see the U.S. natural gas glut damaging their attempts to move away from fossil fuels toward wider use of renewable resources like solar and wind.
Blackmon says the next step is for the U.S. to become an exporter of crude oil, something which would have been unthinkable just a few years ago.
The U.S. already exports refined products, like gasoline and jet fuels, largely due to growing demand in Asia and shrinking demand for gasoline in the United States.
“We are well on the way to becoming the largest producing country in the world,” Blackmon said. “Within the next five years, we will surpass Saudi Arabia.”
Blackmon says OPEC, which has bedeviled six U.S. Presidents has held the U.S. economy in the palm of its hand since the Arab oil embargo of the 1970’s may find its power slashed.
OPEC can still produce oil ‘on the margins,’ meaning it can raise or lower supply to affect worldwide prices and supplies, so OPEC remains in control. But Blackmon says with the continued growth of fracking, with the huge numbers of oil supplies now available in the U.S., that ‘marginal production’ power may switch to the U.S. by the end of this decade, putting America finally in control of its energy destiny.