Give thanks for America’s shale revolution: Opinion
Fasken Oil and Ranch’s Tommy Taylor on the drop in oil prices
Tommy Taylor, director of oil and gas development at Fasken Oil and Ranch, discusses the recent pull back in oil prices.
America has a lot to be thankful for, but sometimes we forget just how blessed we are. The old song says to count your blessings instead of sheep when you are worried and can’t sleep. Perhaps you can also start counting your barrels, oil barrels that is.
This Thanksgiving we should give thanks for the U.S. shale revolution. We are in a new world where, because of American ingenuity and with God’s shedding of his grace with natural resources from sea to shining sea, we are now the biggest energy producer in the world. Not only have we eclipsed Saudi Arabia in oil production, we are also the world’s largest producer of natural gas. Instead of being totally dependent on foreign sources of energy we are now a net exporter of energy.
The shale oil revolution is one of the reasons the America has more leverage over dangerous countries that do not like us that much. It is also why you are paying less money to drive over the river and through the woods to grandmother’s house this Thanksgiving than many thought we would be a decade ago.
Prices at the pump have fallen 25 cents a gallon from October, just in time for what is expected to be a record-breaking Thanksgiving holiday weekend for traveling. While oil prices may be near a floor, our colleagues at GasBuddy say that the national average gas price this Thanksgiving will be $2.57 per gallon. That is the most expensive since 2014 when the national average was $2.79 per gallon, but still better than they were before shale producers raised oil output to a record high.
The shale revolution is also a reason why our economy is doing better, and workers are commanding higher wages than they have in years. This as U.S. unemployment sits at 3.7 percent, the lowest level since 1969.
In fact, this economic joy is the main reason why more people will travel and give thanks across the U.S. AAA predicts a record 54 million Americans will take planes, trains and automobiles this holiday week.
They say that most commuters will travel by car, an estimated 48.5 million Americans. That number is up 5 percent from last year.
Thanksgiving is also a time to remember to not take our blessings for granted. Despite the strides that we have made in energy, there are many people who believe that we have become too complacent in investing for oil to meet demand in the future. A new report from Wood Mackenzie says that “The warning signs are there – the industry isn’t finding enough oil.”
They are warning that a “A supply gap opens up in the mid-2020s, reaching 3 million b/d by 2030, 9 million b/d by 2035 and a formidable 15 million b/d by 2040. Barring a technology breakthrough, we’ll need new oil discoveries. The problem is that the recent rate of commercial volumes found gives little confidence that there will be enough new discoveries to fill the gap.” In fact, they are warning that it may already be too late to make a move and solve the problem leading us to oil shortages in just a few years.
Yet I don’t want you to lose sleep over this even though this is a big problem. Try to be thankful for the oil supplies we have now. Yet, if it is making you worried and you can’t sleep, just count those barrels instead of sheep.
Phil Flynn is senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report.