My Account
The turn-around has been as amazing as it has been rapid - today North Dakota produces more oil and gas than the bottom three members of OPEC, and Texas produces more oil than the entire output of Iran. "Shale oil gives the US a huge national advantage, and we are far ahead of everyone else in terms of competitiveness." Natural gas costs $3 per 1,000 cubic feet in the US, compared to $10.50 in Europe and $15 in Asia. "Siemens is now moving some of its manufacturing facilities to North America because they can't live with the high energy prices in Europe."
Clad said that China has huge shale oil deposits of its own, but most are in the north of the country, which is "inconvenient" because fracking as currently practiced needs large volumes of water, and the water table in northern China is very low. But he said there is an imperative in China to shift from coal-fired power stations to natural gas - the pollution. "China has a very large and vocal middle class, and they don't want to breathe this stuff any more." The WHO already calculates that pollution is taking 5 years off peoples' life spans in China.
But for the time being shale oil and gas is a North American game, with huge fields like the Colorado Spine that extends all the way up into northern Alberta in Canada, and La Casita field in Mexico. For La Casita to succeed, Clad noted, first "Pemex (Mexico's national oil company) needs to work out what it is going to be."
The US leads in technology - wells that took 61 days to drill in Wyoming just a couple of years ago are now being sunk in just 11 days. And even the concerns about environmental damage from fracking are being addressed, as some companies move to replace the water pumped into the ground with sand, that can be sucked back out again. And concerns that fracking might cause large-scale earthquakes, Clad said, were "a little alarmist".
He said the future for the Middle East oil producers was not good - the US overtook Saudi Arabia in oil and gas in July 2012, so "the idea of a Middle East dependency here is a fiction... In the longer term the Gulf is in serious trouble - Disneyland in the Desert."
When asked by a representative of the Chinese Consulate about whether the US would ultimately export its oil and natural gas to China, Clad said that he thought political considerations might impede such exports - "people could point to other areas where China is not helpful to the US."
But in the end of the day all hydrocarbon fuels are in finite supply, and Clad said that shale oil "essentially buys us time". It is better, he said, to burn natural gas than coal - and meanwhile we have to work as hard as we can on electric power and improving public transport.