Energy: The indispensable country
By Ed Crooks and Anjli Raval
The US shale revolution has averted the threat of a global oil crisis caused by growing levels of conflict and instability.
In the sleepy farmland of south Texas, near the ghost town of Helena, the 18 gleaming towers of ConocoPhillips’ oil stabilisation plant are an incongruous sight.
Three years ago, there were only fields here but facilities have sprung up to handle the flood of oil pouring out of the Eagle Ford shale region south and east of San Antonio. These are exciting times in the US oil industry; the new plants are proof of that.
Prospects are bright here and in a few other countries including Canada. As the gush of crude from North America strengthened, analysts predicted it would send prices tumbling and open a new era of cheap fuel. It has not happened.
That is because the great advances in US shale have coincided with political upheaval in big oil-producing countries. Political instability in Libya, Iraq and Venezuela has stoked concerns about disruption and threats to future supplies. International sanctions on Iran have also reduced the global supply of oil, and Nigeria’s industry is plagued by theft.
Were it not for the new production in the US, which has cut the country’s imports sharply, there would probably be talk of another world oil crisis. As a global energy supplier, it is, in the words of Madeleine Albright, the former secretary of state, the “indispensable nation”.
The rise of Eagle Ford has been spectacular. The advances in horizontal drilling and hydraulic fracturing, or “fracking”, which were first used to extract natural gas from shale, have in the past four years been applied here to produce oil, with remarkable results. Eagle Ford produced just 15,000 barrels of crude oil per day in 2010, but 838,000 b/d in the first four months of this year, according to the Railroad Commission of Texas, the state regulator.
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