Energy analysts are now saying the US will cut its reliance on Middle East oil in half by the end of this decade, with complete freedom from the region by 2035.
The Wall Street Journal, citing the US Energy Information Administration’s annual energy outlook, sees the shift due to both a decline in demand, as well as the booming growth in new sources of oil in the Western Hemisphere.
Crude oil prices and oil-related stocks have been in a downturn – with crude falling below $80 a barrel – as global economic growth begins to slow.
In addition, as Resource Investor pointed out, crude also has been battling to the abundance and low price of natural gas, which has fallen more than 30 percent in the past year.
Part of the rise in domestic oil and gas development has involved hydraulic fracturing, the controversial “fracking” technique that involves injecting underground patches with high-intensity air and water, mixed with chemicals and sand.
In addition, the Journal reported that Canada and Latin American nations are beginning to emerge as top energy allies for the US, as American interests begin to move away from the often turmoil-ridden Middle East.
President Obama noted that the US has increased its domestic efforts by a sharp margin during his first term, a move that could lower the price of oil in the short term, but also lead to a future rise due to an uptick in demand.
“We’ve added enough new oil and gas pipeline to encircle the Earth and then some,” Obama said in a speech earlier in the year.
Will oil prices recover to pre-recession levels in the near future?