The Big Oil crowd is pumping up a recent prediction that the United States will be the world’s largest petroleum producer before 2020.
That estimate from the International Energy Agency has received plenty of media attention, along with the organization’s further claim that America could be nearly self-sufficient in energy by 2035.
Gee, that’s only 23 years from now. What could possibly go wrong with that forecast?
Lots of things, of course. We are, after all, talking about extremely volatile national and world energy markets. Just how unpredictable can they be? Take a look.
In the 1980s Conoco’s stable of experts offered an annual booklet called “World energy outlook through 2000.” Here were two key points made by the oil giant in 1985 — plus an update on how things really turned out.
- Oil prices would rise from around $28 a barrel to between $40 to $70 a barrel by 2000.
In reality, petroleum prices fell below $15 a barrel in 1986, bounced around the low $20 range for many more years, then finally rose to $28 by 2000. One factor for the stability was the decision by the Organization of Petroleum Exporting Countries to flood the world with oil during part of the 1990s.
- Coal usage would grow to supply 58 percent of the nation’s electricity needs by 2000, while dependence on natural gas would fall to 7 percent.
In reality, coal’s portion of the electricity market dipped to 52 percent by 2000, while natural gas use boomed to 16 percent. The experts partly missed the fact that utilities would use more low-cost natural gas to avoid building more coal-burning power plants.
Conoco, of course, was hardly alone in not knowing how oil-producing and petroleum-consuming countries would act during years of peace and war from 1985 to 2000.
Against that backdrop, Americans should take the recent predictions by the International Energy Agency with a grain of salt.
Consider the calculation that U.S. oil production will escalate at its present pace and boost production into the No. 1 global position before 2020.
Will Saudi Arabia and Russia, now ahead of us, choose for some reasons to rapidly increase their output as well? Will environmental problems trump the expansion plans of U.S. oil companies? Will worldwide crude prices collapse for any number of reasons, making it less profitable to pump more out of the ground?
The prediction that the United States could become nearly energy independent — something every president since Richard Nixon has talked about — comes with questions, too.
Will renewable energy production continue to rise dramatically? Will efforts to more efficiently use electricity and gasoline be as successful as planned?
Decisions in the coming months will affect these and other energy issues.
Topping the list is the fate of the valuable wind energy tax credit. If the plug is pulled on Dec. 31, thousands of jobs soon will be lost in this key industry. Kansas Gov. Sam Brownback has been outspoken in his strong support for extending the credit.
Another chronic problem is that the United States does not have a national strategy that can “push the country toward more rational ways of providing energy to Americans.” Actually, those words are from a 1991 Kansas City Star editorial, though they still apply today.
It seems a few things never change, even in the unstable world of energy.
Copyright The Kansas City Star. Reprinted with permission.