Yes, your spelling does leave a lot to be desired. And less profanity would be nice, too.

 

I really don't know where anyone gets the "US will be exporting oil soon" nonsense. US oil production is up due to advances in fracking technology developed by the Mitchell Energy people in Houston. This story makes it seem like it was a US Government program when it was exclusively privately developed. And it hasn't driven down the price of oil like it has the price of natural gas. For now, instead of importing two barrels of oil for every one we produce like in 2005, we import eight barrels of oil for every five we produce. We may produce as much as we import by 2020, but I would bet against it. There was a recent story concerning the US exporting gasoline, which was true. Oil comes out of the ground, refineries convert it to Gasoline, we send it to whoever pays the most for it. Places like Mexico, for instance. The Energy Information Agency of the US Dept of Energy is the source for real information on oil imports and exports. Try this website:

 

"The U.S. will become the world's top producer of oil by 2020, a net exporter of oil around 2030 and nearly self-sufficient in energy by 2035, according to a new report from the International Energy Agency."

 

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And its not just the LA Times spouting this nonsense from the IEA:

 

 

This is actually old news but with the new advances in fracking and the massive amounts of oil shale available in the continental US (not even considering Canada), it would seem that the IEA's analysis is spot on.  Also remember we will be consuming less domestic diesel/gasoline as commercial truck fleets move to natural gas and personal vehicles to electric/hybrid. 

 

We really can drill (and technologically advance) our way to energy independence.

 

 

Actually ‘fracking’ was invented in 1947 by Stanolind Oil and Gas Corporation, and has been standard practice in the oil and gas industry ever since.  Usually being done several times over the life of a well. Mitchell Energy just was the first to apply it to unlock gas production from tight shale formations.

 

And yes, it did drive down the price of oil, starting 50 years ago.

The writer is surely narrow in his analysis! He is openly and shamelessly anti Russia and still with a Cold War mentality. Surely the US will continue to import oil and the price of oil and gas will not fall simply because of fracking technology. The fracking technology and all its false promises have already been rubbished by various American and other neutral analysts! I do not think the Soviet Military was inefficient in any way (the USSR was stronger than the rest of the World combined - including the US). Its economy suffered due to misadventure in Afghanistan - the way the US and other Western Economies are struggling!!! All indications are that surely Russia has been on upward trend since 2000. It has reclaimed the number 2 position in arms export. It is producing new state of the art weaponry - like the newest Strategic Submarine Yury Dolgoruky. Its economy is doing well (compared to most Western Economies  like Italy which needed a Bail Out). It has the third highest amount of Foreign Exchange Reserves after China and Japan. It has one of the lowest Foreign Debt etc, etc etc!

 

The whole negative picture that is painted about Russia is totally incorrect!

The use of fracking in gas shales greatly increases the available supply of gas, which is a preferred fuel to oil in stationary applications, reducing the demand for oil. Current prices for oil are propped up by the increase in demand from the economic growth, particularly in China and India. Since the demand for oil is relatively inelastic large rapid price drops are the historic norm.

 

There is however a secondary limitation due to the economics of production. Oil and gas projects are huge. A small project is anything under $500M, a large project is over $3B. When the price has run up and stayed for a couple years investors start thinking it is a new floor and money pours in on the prospects of huge proffits. Then when the price suddenly drops all they all try to pull out before the next guy. The result is a cyclic boom-and-bust behavior with changes in supply lagging changes in demand by 8 to 12 years.

 

Russia’s real problem is that they have threatening to withhold oil and gas deliveries to former Warsaw Pact countries for political leverage. As a result Russia is now seen as an unreliable supplier by Europe which is diverting their investment in new capacity to other countries in order to reduce their vulnerability. This means that there is a decline in production growth in Russia, and possibly even total production has declined. Production from an oil well decline about 6% per year, you have to either to either keep drill new ones in a field or installed enhanced recovery to maintain the production level. Eventually you reach a point, in 12 to 15 years where you cannot maintain the production level and the field declines. But all these options cost money, and suddenly Europe isn’t supplying as much, and soon won't be buying as much.