Let’s look today at how over the past two decades the U.S. has evolved from a degree of foreign-energy dependency that threatened its economy and national security to the premier energy producer in the world. This is an especially useful fact for U.S.-based manufacturers, who consume 1/3 of the country’s available energy resources each year.
Since the start of this country’s industrial revolution in the mid-19th century, Americans took their vast energy resources for granted. That sense of security ended with the OPEC oil embargo of the 1970s. In subsequent decades, independence on overseas energy supplies rose. By 2006, U.S. energy consumption outpaced production by 29 quadrillion BTUs, and imports outpaced exports by 30 quadrillion BTUs.
That all changed with the “shale gale” of the early 2000s, writes Industry Week (Jan. 9, 2025). The shale gale was tied to the hydraulic fracking revolution, made possible by new horizontal drilling and mapping technologies. By 2016, more than half of all American oil output resulted from fracking; by 2018 the U.S. became the world’s top crude oil producer; and by 2019 it was a net total energy exporter.
Last year the U.S. produced 13.4 million barrels per day (b/d) of crude oil, twice as much as a decade ago. This easily tops Saudi Arabia’s 10.8 million b/d and Russia’s 10.7 million b/d. In other words, the U.S. (and its manufacturing base) is no longer beholden to OPEC or a geopolitical adversary for energy resources.
The U.S. is also the world’s largest producer of natural gas, surpassing Russia in 2011. In fact, the U.S. produces almost all the natural gas it consumes and is the globe’s largest exporter of LNG. About 40% of the nation’s electricity needs are met through natural gas power plants, twice as much as through coal-fired power plants. Cheap natural gas has been a tremendous boon to the American economy over the past two decades.
And despite the environmental backlash to nuclear energy over the past 40 years, the U.S. still generates the most nuclear power worldwide, producing 780,000 gigawatt hours (GWh) annually, compared to runner-up China with 400,000 GWh.
Finally, there’s the generation of renewable energy, comprising hydro, wind, biomass, solar, and geothermal sources. While China is the world leader in that energy category, generating 31% of global renewable electricity, the U.S. is runner-up with 11% of world production. Solar and wind energy are expected to lead the growth in U.S. power generation through 2026.
Classroom discussion questions:
- Why is this an OM issue?
- Which energy sources do you think will dominate in 5 years?
The new (when approved) secretary of Energy is testifying right now about energy before senate committee. Chris Wright. His company was big natural gas fracking leader and has investments in small nuclear reactor technology too.