VLADIMIR Putin's slap at American “exceptionalism” dominated the news from his recent op-ed in The New York Times. Turns out there are several areas in which America is exceptional in relation to Russia.
One is oil and gas production and the means by which the United States is increasing its output. Using data from the U.S. Energy Information Administration (EIA) and other sources, The Wall Street Journal reported that this country is overtaking Russia as the world's largest producer of oil and natural gas, “a startling shift that is reshaping markets and eroding the clout of traditional energy-rich nations.”
What's exceptional here? U.S. producers have pioneered and embraced technologies that free oil and gas from shale-rock formations. Russia has not. Hydraulic fracturing and horizontal drilling, a blessing for Oklahoma energy firms and the bane of fossil fuel troglodytes, is pushing the United States past Russia.
“This is a remarkable turn of events,” EIA chief Adam Sieminski told the Journal. “This is a new era of thinking about market conditions, and opportunities created by these conditions, that you wouldn't in a million years have dreamed about.”
The United States produced about 22 million barrels a day of oil, natural gas and related fuels in July, compared with an estimated 21.8 million barrels a day in Russia. Saudi Arabia is still the king when it comes to oil, but not natural gas. Last year, for the first time since 1982, the U.S. produced more natural gas than Russia. As for oil, the gap between U.S. production and Russian production is shrinking by the day.
It's not that Russia lacks the shale formations that underlie U.S. gains. Those formations are present but Russia hasn't been tapping them. Instead, Russian officials are dismissive of the shale revolution in America. The head of a major energy company in Russia said U.S. shale output is “a bubble that will soon burst.”
American environmentalists are doing their best to burst that bubble with their continued irrational opposition to fracking. Putin may be counting on this to restore his country's supremacy in petroleum. Rest assured, if trumped-up environmental concerns halt the U.S. energy boom, Russia will benefit. And it won't hesitate to use American-developed technology down the road.
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