Tags: Daniel Yergin | OPEC | Oil | Crude

Daniel Yergin: 1973 Oil Embargo Ultimately Helped US

By    |   Tuesday, 15 October 2013 02:26 PM

The 1973 OPEC oil embargo helped the United States in the end by encouraging new sources of production, including domestic ones, says energy expert Daniel Yergin, vice chairman of IHS.

World oil production has surged 50 percent since 1973, he writes in The Wall Street Journal.

It began with exploration in the North Sea and Alaska. "Most recent is the development of 'tight oil,' the spinoff from shale gas, which has increased U.S. oil output by more than 50 percent since 2008," Yergin says.

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That explosion in U.S. production is being felt throughout the economy, in terms of jobs, investment and household income, Yergin says. And oil imports have dropped to 35 percent of consumption from 60 percent in 2005.

That gives the U.S. more energy security, he explains. For example, several million barrels of oil a day have been taken off world markets thanks to problems in Iran, Iraq, Libya, South Sudan, Nigeria and Yemen.

"The growth in U.S. oil output has been crucial in compensating for the missing barrels," Yergin writes. "Without it, the world would be looking at higher oil prices, there would be talk of a possible new oil crisis."

Meanwhile, energy entrepreneur T. Boone Pickens says the United States could further reduce its reliance on OPEC by building The Keystone XL oil pipeline from Alberta, Canada to the Gulf Coast.

"You could make them [OPEC] obsolete two or three different ways, and that [Keystone] is one of them," Pickens told CNBC.

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The 1973 OPEC oil embargo helped the United States in the end by encouraging new sources of production, including domestic ones, says energy expert Daniel Yergin, vice chairman of IHS.
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2013-26-15
Tuesday, 15 October 2013 02:26 PM
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