Content provided by Scott Kubie, CLS Chief Strategist
We’re number one! We’re number one! The cry of hopeful college football fans around the country as their teams march to victory (I’m trying to remember what that felt like).
While the Huskers are struggling, America has vaulted past Russia to become the top producer of oil and natural gas combined. Five years ago I spoke about energy independence at seminars as a game-changing event for our country. I thought it might come through alternatives and energy efficiency. It did, but not in the way I envisioned it.
Instead the alternative was an alternative drilling technique allowing previously unreachable deposits of energy to be tapped. North Dakota became the new Saudi Arabia and plans for importing liquefied natural gas (LNG) quickly became plans for exporting it instead.
The number of rigs drilling peaked in late 2011 or early 2012 and has fallen about 8 percent since. Production continues to grow unabated. Production per rig is up 28 percent.
The benefits of improved energy production are starting to show up in the trade deficit. The 2012 deficit was $539 billion, down from $560 billion in 2011. Users of energy, especially users of natural gas, are big beneficiaries of abundant energy. As those firms expand more in the U.S. and less overseas the trade deficit drops even more.