Recent oil discoveries put focus back on the Americas
Share with others:
RIO DE JANEIRO -- Brazil has begun building a fleet of nuclear submarines to protect its vast, new offshore oil discoveries. Colombia's oil production is climbing so fast that it is closing in on Algeria's and could hit Libya's prewar levels in a few years. Exxon Mobil is striking new deals in Argentina, which recently heralded its biggest oil discovery since the 1980s.
Up and down the Americas, it is a similar story: A Chinese-built rig is preparing to drill in Cuban waters; a Canadian official has suggested that unemployed Americans could move north to help fill tens of thousands of new jobs in Canada's expanding oil sands; and one of the hemisphere's hottest new oil pursuits is actually in the United States -- at a shale formation in North Dakota's prairie that is producing 400,000 barrels of oil a day and is part of a broader shift that could ease U.S. dependence on Middle Eastern oil.
For the first time in decades, the emerging prize of global energy may be the Americas, where Western oil companies are refocusing their gaze in a rush to explore clusters of coveted oil fields.
"This is an historic shift that's occurring -- recalling the time before World War II, when the U.S. and its neighbors in the hemisphere were the world's main source of oil," said American oil historian Daniel Yergin. "To some degree, we're going to see a new rebalancing, with the Western Hemisphere moving back to self-sufficiency."
The hemisphere's oil boom is all the more remarkable given that two of its traditional energy powerhouses, Venezuela and Mexico, have largely been left out, held in check by entrenched resource nationalism. Venezuela is now considered to have bigger oil reserves than Saudi Arabia, putting it at the top of OPEC's rankings. If it opened up more to foreign investment, it could tip the scales further in the hemisphere's direction.
Exactly how the Americas' growing oil clout might rebalance energy geopolitics remains an open question. The Middle East can still influence oil prices greatly, its oil fields are generally cheaper to develop, and some countries in the region are endowed with great reserves.
Moreover, the Americas still vie for investment with other oil-rich regions, such as Russia's portion of the Arctic Ocean and West African waters. Security concerns such as oil worker abductions could, as they have in the past, prevent Colombia from continuing to raise output. And environmental and financing questions pose persistent challenges to the rapid growth of the hemisphere's oil production.
Still, the new oil exploits in the Americas suggest that technology may be trumping geology, especially in the region's two largest economies, the United States and Brazil. The rock formations in Texas and North Dakota were thought to be largely fruitless propositions before contentious exploration methods involving horizontal drilling and hydraulic fracturing -- the blasting of water, chemicals and sand through rock to free oil, known as fracking -- gained momentum.
First Published September 20, 2011 12:00 am
