Time Magazine’s “Person of the Year” this year was a collective award: The Ebola Fighters.
An excellent choice. The courage and gallantry of these health care workers — dozens of whom have died from the plague — richly deserves the honor.
The Person of the Year award — called the Man of the Year award when it was begun in 1927 (Charles Lindberg was the first recipient) — was originally intended to recognize the person who “for better or for worse … has done the most to influence the events of the year.”
Time rarely applies this standard in picking the recipients anymore. The award is more typically given as an honor, sometimes deserved, sometimes not, than it is for genuinely having done the most to influence the events of the year for better or worse.
If the original measure had been used, this year’s award would have gone far greater and more profound impact on to a different recipient — one who had a the course of human events globally: The American Oilman.
Through the combination of advanced seismology, horizontal drill- ing, fracking and other technological advances, the American petroleum industry has revolutionized the production of oil and natural gas. It has created millions of well-paying jobs and provided an enormous boost to both the U.S. and the global economies,
In 2014, the American oil industry unleashed a torrent of new oil and natural gas production that broke the international price of oil. U.S. crude oil production in 2014 rose by 1.1 million barrels per day to 9.1 million barrels a day from a low of 5 million bbls/d in 2008.
Last June crude oil was selling for $117 a barrel. The year will end with it selling for about half as much.
The United States burns through about 140 billion gallons of gasoline a year, so for every one-cent reduction in the price of gasoline American consumers and businesses save $1.4 billion annually. Last April gasoline was selling for an average of $3.70 a gallon nationally. Today it is selling for about $2.50 a gallon. Assuming prices stay down, the saving to American consumers and businesses is about $168 billion annually.
The stimulative impact on the economy is the same as a $168 billion tax cut or $168 billion of federal stimulus spending. Maybe more so, since the impact of gasoline price drops is immediate; no waiting for refund checks or supposedly shovel-ready projects to get underway.
And that’s not the half of it. Lower natural gas prices in the U.S. are prompting U.S. businesses that moved energy-intensive manufacturing operations off-shore to bring them home.
Globally, lower oil prices driven by the U.S. shale boom arrived in the nick of time. Both the Chinese and EU economies have been in danger of tumbling into recession for months. Lower energy prices are helping to keep them out of it.
The American oil industry didn’t set out to make the U.S. energy independent — or at least no longer dependent on imported oil to the point where it can be subjected to oil embargos or extortive price fixing — but things are rapidly working out that way.
American leftists aren’t chanting “no blood for oil” anymore. They would be laughed out of the room if they did.
And although the American oil industry didn’t set out to do it, it has ravished the finances of assorted state sponsors of terrorism and petro-tyrannies, including Iran, Russia, Qatar and Venezuela. Boo freaking hoo.
The American oil industry has made a mockery of a lot of conventional wisdom about how much oil and gas is left in the earth, starting with the “peak oil” theory — the once widely held belief that the world had used up more than half of the oil in the earth and maxed out the amount of oil that could be produced in a year, and that oil and gas output had nowhere to go than down while prices had nowhere to go but up.
The theory didn’t take into account oil in shale deposits, because it assumed it would never be possible to produce it. Bad guess. The industry isn’t likely to run out of places to drill in the U.S. shale deposits for a century or more.
The industry has also made a big contribution to reducing the nation’s carbon footprint. Before it broke the price of oil, it broke the price of natural gas, which made it economically possible for the nation’s utilities to generate more electricity from natural gas and less from coal. Natural gas burning produces only half as much CO2 as coal burning. As a result, there’s been a 20 percent reduction in the amount of CO2 produced by American electric utilities.
Can the industry survive the current collapse of oil prices? Probably, if for no other reason than lately it has been racking up productivity gains almost as fast as the computer industry.
The announcement of Time’s Person of the Year award usually generates a lot of second guessing, and this year’s was no exception. But surprisingly, the American Oilman seems to have escaped notice. Apparently the industry has been accorded the highest honor the American people bestow on industries essential to their survival. They take them for granted.
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This opinion column does not necessarily reflect the views of Boulder Weekly.
