Surging oil production

A recent report suggested that if present trends continue the U.S. could be energy self-sufficient by 2030. N.C. State University economist Mike Walden explains what’s behind this prediction?

“Well two things …: price and technology. With oil prices having gone up so much over the recent decades, it’s now profitable for many energy companies to go into, perhaps, oil fields that they never went into before because the costs were too high.  Now that the returns are sufficient to cover the costs, it makes sense to drill there and produce there. And we’re seeing a lot of that around the world.

“Second element is technology. The oil industry has developed new technology for accessing – safely, hopefully — oil fields in areas that previously they just couldn’t get to. As a result, in the last four years just in our country, domestic oil production has surged by 33 percent.

“Now, of course, there are issues here – environmental, of course, being one of the tallest issues. And so we have a continuing debate about the … potential trade-offs between environmental safety and oil production. And also … although temporarily it may mean, but doesn’t necessarily mean long-run, low energy prices because the world demand for energy is still growing very rapidly.”