The Real Story on America’s Energy Comeback

Did you hear the news?

In case you missed it, the beginning of this week was awash with stories of America’s energy comeback.

‘U.S. Redraws World Oil Map’ – Wall Street Journal
‘U.S. Oil Output to Overtake Saudi Arabia’s by 2020′ – Bloomberg
‘U.S. to become biggest Oil Producer – IEA’ – CNNMoney

What’s with the newfound energy discussion and the IEA’s new report? And are there any new ways to profit? Let’s take a look…

Here are a few snippets from this week’s release of the IEA’s World Energy Outlook 2012:

The global energy map ‘is being redrawn by the resurgence in oil and gas production in the United States’
‘The recent rebound in US oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity – with less expensive gas and electricity prices giving industry a competitive edge – and steadily changing the role of North America in global energy trade.’
‘By around 2020, the United States is projected to become the largest global oil producer’ [Overtaking Saudi Arabia]
‘North America becomes a net oil exporter around 2030.’ [Note: it says ‘North America’, not the United States]
‘United States, which currently imports around 20% of its total energy needs, becomes all but self-sufficient in net terms.’
‘Unconventional gas accounts for nearly half of the increase in global gas production to 2035, with most of the increase coming from China, the United States and Australia.’

The Key Things to Know About America’s Energy Comeback

There’re plenty of interesting tidbits that came from this week’s report. Let’s break it down…

For starters, it’s clear that America’s energy comeback is for real. Goldman Sachs came out with the first groundbreaking report on this idea back in September…of 2011.

Back then, they said that the U.S. would surpass Russia and Saudi as the No. #1 oil producer in the world. Also back then, the news was a great shock.

On that front, the IEA report didn’t bring much to the table, more than just reaffirming that this resource boom is for real. As the kids would say, the IEA was ‘tardy to the party’ – heck, even OPEC made recent note of America’s great shale story.

Today, I figure it’s only right if we say: Welcome to the conversation IEA!

But the IEA report did make a few points that I’d like to clear up now, too.

As you may have seen this week, there’s been a lot of ‘energy independence’ talk flying around. One of the key points the report made was that the U.S. is set to become energy independent. Great news, right?

To be clear, the IEA isn’t saying [America is] going to be ‘oil independent’. Instead, the report uses an amalgam of energy: nat gas, oil, coal, nuclear.

And sure, when you look at it that way the U.S. is darn close to being energy independent as it stands – a bountiful stock of coal, uranium, nat gas and even oil! Indeed, there’s no new news there.

Also, the report boldly stated that North America will become a next oil exporter. Remember, this is North America, not the United States. Again we’ve known for some time that the U.S. and Canada are the two up-and-comers in the unconventional oil game.

So, that’s what you need to know. The IEA report reaffirms our stance on America’s energy renaissance. More oil and gas are going to be flowing through the pipes in the coming years – all at the same time the rest of the world will be demanding even more oil and gas.

To say the least, it’s good to be an investor in America’s energy future – especially in the next 3-5 years.

Matt Insley
Contributing Editor, Money Morning

Publisher’s Note: This is an edited article that originally appeared in Daily Resource Hunter

From the Archives…

APRA Spins Another Yarn On Australian Banks
9-11-2012 – Kris Sayce

The Secret Return to the Gold Standard
8-11-2012 – William Patalon

Forget the US Election, This Stock Market Event is the One to Watch For
7-10-2012 – Murray Dawes

The Greeks Giving Economists Nightmares
6-10-2012 – Bill Bonner

Super Fund Results: Whoopdeedoo
5-10-2012 – Nick Hubble

The Real Story on America’s Energy Comeback