For years I’ve been telling anyone that would listen that the idea that the United States of America is going to become “Saudi America” and throw off the chains of our enslavement to the energy (crude oil) barons of the middle east and achieve energy independence thanks to the boom in shale oil via fracking in recent years is a complete and total myth. A fantasy based in the deeply held desire that the “American way of life” can continue into the infinite future without disruption. Of course, this view of the future is not readily embraced by most and that is completely understandable given what such a seismic shift in paradigm would mean for the average US citizen. However, that possibility of a very unpleasant upheaval doesn’t make it any less probable.
Now that we are comfortably into 2016 we can take a long gaze back into 2015 and see a few facts to support my point. The following two links tell the tale:
(This article is from a few months back. Crude oil is currently trading around the low $30 range.)
Anyone willing to take an honest look at the recent fracking boom that has been responsible for the surge in American crude oil production will easily discover that these wells are expensive, short-lived and that the sweet spots in which they are drilled are few. It does not take a genius to foresee a massive decline in production from these wells and anyone hoping that this could continue indefinitely is simply participating in an exercise of delusion.
To a greater point, the tsunami of articles surrounding this recent fracking boom announcing the death of peak oil were worth almost as much as the paper they were printed on as the chart clearly shows. The United States reached it’s peak oil production in 1970 has never been back to that point. Keep in mind that our max production was 10 million barrels of oil a day back in 1970 and even though the recent boom approached that number once again, it really doesn’t mean much when you understand that the United States consumes around 19 million barrels of oil daily. With a clear decline in the overall flow of fracked crude oil having arrived, it is pretty easy to see and forecast that we will not be exceeding or even reaching that past peak any time soon thanks to both the natural decline cycle of the shale wells, as well as the end of the “free money” economic environment that allowed these often money-losing ventures of fracking to begin in the first place.
The reason any of this matters to you is simple. The United States and global economies are absolutely tied to and completely dependent upon uninterrupted access to cheap and readily accessible energy (crude oil). It is the lifeblood that allows economic growth to occur. As energy resources tighten and decline over the coming decades, economic growth will follow right along with it. In fact, one can make the case that global economic growth as a real metric has already come to an end. As this occurs and industrial civilization winds down, economies will fail and people will lose their jobs finding themselves left to watch longingly as the “American way of life” slips further and further into the black hole of history.
I see this as the reality of our future in the long term and it may mean the end of the world as we know it, but this does not have to mean the actual end of the world. It will mean a new world though. This new reality can be brilliant, beautiful and amazingly rewarding. The more you understand what is happening around you now, the easier it will be for you to adjust the coming changes. By embracing the realities now that the real world will eventually impose on us all, you will have the opportunity to navigate the emotional storms that are certain to come as a result of such a change and position yourself to thrive in a future that you can create. I hope you will make plans to do so.