Glenn Reynolds, aka Instapundit, links to NPR story, with additional commentary from Amy Myers Jaffe.

“Wow, I knew it was big, but I had no idea it was that big,” Reynolds notes.

It is immensely big, and I have been hammering on this point for years.  Here is my post from last year, The World is Awash in Oil, that details the vast amount of “unconventional” oil at our potential disposal.  And, that is just oil.  There is also an estimated 750 trillion cubic feet of untapped natural gas in the US.  In the oil and gas industries, there is something called the McKelvey Box, which breaks the carbon resources into different sections – discovered, assumed but undiscovered; economically recoverable, sub-economic, and non-economic.  Vast amounts of carbon resources that were once in the “sub-economic” or “non-economic” boxes have been unlocked by the technological revolution of the last few years.  There are now several centuries worth of fossil fuel resources available to us – I have taken to calling this the Shale Age or, when you consider the near-to-fruition of economically viable coal- and gas-to-liquid fuel, the Second Age of Oil.  And, with the proper set of policies, the US is in position to be – at once – the worlds greatest producer and consumer of fossil fuels - as well as the top and exporter of value-added, finished petroleum based products.   Simply being energy independent would wipe out much of our trade deficit; the exports of fuel and other petroleum products would put us decisively in the black.  And the money flowing into local, state and federal treasuries from taxes, leases and royalty payments would go a long way to solving the debt crisis.

The moment is upon us to save ourselves.  To borrow a phrase – We are the Ones We have been waiting for.

As a word of caution, Reynolds also notes “The implications here are huge. If I were Russia and Saudi Arabia, I’d be subsidizing U.S. environmental groups in an effort to stop, or at least slow, the process.”

The reply to that, of course, is to take those environmental groups seriously ourselves, and forestall that line of attack.   Ours is an open, democratic system, and environmental groups are powerful, well organized and motivated.  We have to be environmentally conscious in crafting our energy policies – even if you disagree with the environmentalists, then work them if for no other reason than to mollify a powerful constituency that could otherwise derail or slow your efforts.  Our system works well when organized groups bargain with each other and work out a synthesis approach.  Any politics that is based on an assumption that you can simply steamroll the opposition is both sophomoric and doomed to failure.   America, and the world, needs access to the bountiful energy resources within our grasp – but we cannot be so environmentally obtuse that we allow the fortune beneath our feet to go unclaimed.

The European Petroleum Industry Association (EUROPIA)  has issued a new report examining Europe’s energy outlook through the year 2050.  Specifically, the report analyses the various impacts of the EU policy of “decarbonization.”   Although EUROPIA projects a steadily decreasing demand for fossil fuels, they fear that regulatory burdens on the refining and petrochemical industries will cause domestic capacity to decline even faster than demand.  Thus, even though over all demand for imported fuels decreases, the cut in capacity could mean an increased reliance on imports of refined products.

The European Energy Review has published an overview of the study here.   EER summarizes the key concern of EUROPIA:

This means that policies that make it harder for the refinery sector to compete internationally and to survive - in other words, that hasten the natural decline of the sector - will have highly adverse consequences. According to Europai, such policies will make Europe more dependent on highly volatile international oil markets. They will harm the existing oil and distribution marketing system, putting at risk the EU internal market for transport fuels. And they will hurt the petrochemical value chain and other directly linked industries, leading to economic damage and job losses.

This, of course, opens a competitive door for the US.  As the vast supplies of unconventional fossil fuels make North America a leading producer of raw carbons, we should build up our refining capacity in order to supply foreign markets with more value added finished products.   Yet another opportunity for economic growth that the Shale Age opens up for policy makers.

We wrote yesterday about the National Petroleum Council report that estimates North American oil production could reach 22.5 million barrels per day within 25 years.  Combined with the potential for an 85% increase in natural gas production and possible advancements in coal, it is conceivable that the US – or at least North America combined – could achieve energy independence (or something very close to it) in that time frame, even without a “clean energy” revolution.

These estimates, however, are based primarily on the size of the resource base and the technological ability to expand the commercially viable sub-section of the McKelvey Box:

However, there is another important limiting factor beyond the resource base and the technology to exploit it:  the petrotechnical professionals (PTP) needed to maximize production.  Schlumberger Business Consulting has been tracking the size of this talent base since 2004 and has come to two major conclusions:  (1) PTP talent is an important strategic resource and (2) demographic shifts mean that this talent base is both aging and shrinking.  Thus, in addition to the regulatory reforms outlined by the NPC in their report, we need to seriously engage in Science, Technology, Engineering and Mathematics (STEM) programs at the local, state and federal levels.