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Rarely does the release of a data-driven report on energy trends trigger front-page headlines around the world. That, however, is exactly what happened on November 12 when the prestigious Paris-based International Energy Agency (IEA) released this year’s edition of its World Energy Outlook. In the process, just about everyone missed its real news, which should have set off alarm bells across the planet.
Claiming that advances in drilling technology were producing an upsurge in North American energy output, World Energy Outlook predicted that the United States would overtake Saudi Arabia and Russia to become the planet’s leading oil producer by 2020. “North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world,” declared IEA Executive Director Maria van der Hoeven in a widely quoted statement.
In the U.S., the prediction of imminent supremacy in the oil-output sweepstakes was generally greeted with unabashed jubilation. “This is a remarkable change,” said John Larson of IHS, a corporate research firm. “It’s truly transformative. It’s fundamentally changing the energy outlook for this country.” Not only will this result in a diminished reliance on imported oil, he indicated, but also generate vast numbers of new jobs. “This is about jobs. You know, it's about blue-collar jobs. These are good jobs.”
The editors of the Wall Street Journal were no less ecstatic. In an editorial with the eye-catching headline “Saudi America,” they lauded U.S. energy companies for bringing about a technological revolution, largely based on the utilization of hydraulic fracturing (“fracking”) to extract oil and gas from shale rock. That, they claimed, was what made a new mega-energy boom possible. “This is a real energy revolution,” the Journal noted, “even if it's far from the renewable energy dreamland of so many government subsidies and mandates.”
Other commentaries were similarly focused on the U.S. outpacing Saudi Arabia and Russia, even if some questioned whether the benefits would be as great as advertised or obtainable at an acceptable cost to the environment.
While agreeing that the expected spurt in U.S. production is mostly “good news,” Michael A. Levi of the Council on Foreign Relations warned that gas prices will not drop significantly because oil is a global commodity and those prices are largely set by international market forces. “[T]he U.S. may be slightly more protected, but it doesn’t give you the energy independence some people claim,” he told the New York Times.
Some observers focused on whether increased output and job creation could possibly outweigh the harm that the exploitation of extreme energy resources like fracked oil or Canadian tar sands was sure to do to the environment. Daniel J. Weiss of the Center for American Progress, for example, warned of a growing threat to America’s water supply from poorly regulated fracking operations. “In addition, oil companies want to open up areas off the northern coast of Alaska in the Arctic Ocean, where they are not prepared to address a major oil blowout or spill like we had in the Gulf of Mexico.”