This paragraph jumps out from an NPR’s All Things Considered report on an oil boom town in North Dakota:
Two years ago, America was importing about two thirds of its oil. Today, according to the Energy Information Administration, it imports less than half. And by 2017, investment bank Goldman Sachs predicts the US could be poised to pass Saudi Arabia and overtake Russia as the world’s largest oil producer.
All Things Considered implies that the sharp drop in imports is due to new oil finds and production here. That’s only partly true. Here’s what the Energy Information Administration says:
U.S. dependence on imported oil has dramatically declined since peaking in 2005. This trend is the result of a variety of factors including a decline in consumption and shifts in supply patterns. The economic downturn after the financial crisis of 2008, improvements in efficiency, changes in consumer behavior and patterns of economic growth, all contributed to the decline in petroleum consumption. At the same time, increased use of domestic biofuels (ethanol and biodiesel), and strong gains in domestic production of crude oil and natural gas plant liquids expanded domestic supplies and reduced the need for imports.
For what it’s worth, the EIA projects the import number to drop to 42 percent by 2035.
NPR should have given us a brief explanation of why the import numbers have dropped so sharply. But still, I’m glad it mentioned it. That story seems to have been underplayed by the press.
Also underplayed: that Goldman Sachs report. Except for the Houston Chronicle, I don’t see any other mainstream press outlets that have reported it. Why not? If it’s even halfway plausible, it would be worth noting. Goldman’s projection is that oil output will rise some 41 percent here in the next six years. That’s a whole lot for a country that not so long ago was seemingly tapped out.
Beyond that, NPR’s piece is about an American boom town with 2,000 or 3,000 job openings and unemployment below 2 percent, which particularly jarring against the backdrop of everyday news on the depressed U.S. economy. Here’s some good color from Williston, North Dakota:
“When we came up here, we were told housing was tough but not impossible,” Featheringill says. He and his wife got lucky and borrowed an RV from a family friend. “We got lucky again and got to park the RV in a place where we were rent-free. Most of the RV spots around here run $1,000 to $1,200.”
That’s $1,000 a month, just for a parking space. “Is that not amazing?” Featheringill says. “And that’s in a 70-mile radius. Just to park your RV”…
In Williston, many workers forgo prices as high as $2,000 a month to rent a small apartment and instead live in “man camps,” massive group-housing provided by their companies.
We’ve read a lot about how shale gas is booming here. But if Goldman’s report is right, and I’m skeptical, oil production is going to give the U.S. economy a major boost in the next few years. There will be lots more Willistons.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.