The shale oil expansion began in North Dakota, and the expansion of oil output in the U.S. has been nothing short of revolutionary.
However, I think it is time to recognize that the fanciful notion of “energy independence” is less and less likely to happen, if it ever really had a chance. We are surely less dependent on foreign oil as the graph shows, but it is not clear that it is going to go to zero anytime soon, if ever.
Now we do not have to go to zero imports for there to be enhanced energy security and improved economic growth and development prospects in the United States. However, we do have to get smart about this.
The demand for petroleum products is up globally. Why do I say that? With all the increased supply put onto the market we have not seen drops in the price per barrel of oil, of any significant or permanent amount.
This increased demand has the potential to put serious upward pressure on oil prices in the near future and clearly bears watching as a risk to the economy.
Clearly North Dakota’s energy sector could gain from such price movements, but the increased energy costs could threaten other industries with more marginal profits.