A big piece in Americas energy revolution puzzle

Once upon a time…

…smoking was healthy,

…the sun circumvented Earth

…cleanliness was unhealthy and

Renewed US energy independence just wasn’t.

But things change, and clearly so does policy. President Obama last week stated in his speech at Georgetown University, that climate change policy is far from something new, and makes some attempts to link it back 40 years in time, to good ‘ol Tricky Dick.

I don’t know about that, and I’m really not taking a stand for or against any views out there. I like to look at politics, and especially how politics can make policies change – almost by flicking a switch.

Five years ago wasn’t long ago, but in Energy America it was the Stone Age. Remember – this was before anything other than the Barnett had started taken off, and scenarios were still the “LNG import from middle east and crude imports from Canada and ROW”. All eyes were on the friendly neighbor to the north. A cozy giant in terms of energy, a friend that Mighty America could lean on and willingly depend on for decades to come. Eyes were on Alberta’s vast bitumen deposits which – through higher prices and improved technology – had upstream players jumping on them from around the world. Billions were pumped in, fortunes switched hands and Calgary was booming.

The strategy in the business was clear: 250+ bn barrels of oil should be developed and the energy hungry southern neighbor couldn’t wait to get off Middle Eastern, West African and Hugo Chavez-dependent barrels that daily hit its shore.

Midstream operators responded accordingly: old mainlines were beefed up to cope with the growing flows, old gas pipelines were converted to crude oil service and RIGHT in the middle of all this – shale hit the market. Big time.

What started in gas and killed LNG import terminals now switched to oil. Bakken, Eagle Ford, Anadarko basin, Permian basin. It actually started looking like a real possibility that the US in a decade or so could actually make it pretty much on its own – with just a little help from Canada. But not at all to the same extent as during the Stone Age.

A cocktail of environmental awareness due to effective lobbying from environmentalists – terrified by pictures of open-pit mining in northern Alberta and American politicians realizing that easy points can be won by halting a pipeline designed to provide the wettest of all wet American dreams – Energy independence (with a little help from Canada) – that is a very, very potent mix.

The result?

We all heard it last week. It’s probably game over, guys.

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