Shale wells producing oil and gas in the United States are reshaping the global petroleum market with potentially long-lasting effects.
A year ago, the most optimistic energy watchers looked at the rapidly growing oil and gas production from hydraulically-fractured wells and hoped the United States might rely less on imports. Now comes news that U.S. oil and gas production is reshaping global markets.
Rhiannon Meyers reports for FuelFix that European petrochemical companies face extinction from U.S. competition. Low natural gas and energy prices give U.S. companies and insurmountable advantage, some analysts say, and $18 billion worth of expansion projects promise to only increase U.S. production.
Over the summer, the United States became the world’s largest oil and gas producer, and now domestic crude is squeezing out imports from Saudi Arabia. Saudi Arabia is cutting production to buoy prices hurt by the flood of U.S. oil.
Shale drilling is disrupting the global energy and petrochemical markets in ways unimagineable a year ago. As an example of how quickly things are changing, I did a Google search for “IEA United States Saudi Arabia” and was shown these links of the first page:
US Oil Output to Overtake Saudi Arabia’s by 2020 – Bloomberg Nov. 12, 2012
U.S. to surpass Saudi as top oil producer by 2016 – IEA Nov. 12, 2013
U.S. Overtakes Saudi Arabia and Russia as Largest Oil July 10, 2014.
Entrepreneurs should be looking for new ways to take advantage of these changes, and established companies should question the basic premises of their business plans. The market is changing quickly, and based on growing efficiency, the energy market may look completely different in the years to come.