Report: Fracking could drain OPEC’s power to set gasoline prices

The success of American drillers in coaxing fossil fuels from shale rock via hydraulic fracturing—or fracking—has the potential to boost production so much that it may deny OPEC the power to set global oil and gasoline prices, an intelligence advisory panel concludes in a new report. Bloomberg reports that rising domestic production from hydraulic fracturing is expanding U.S. supplies, which in time would shift the balance of power in global energy markets, according to a new report by the National Intelligence Council. The council, an adviser to the director of national intelligence, publishes a report every four years to aid policymakers’ long-term planning. As the U.S. adds supply, OPEC’s influence over prices would wane. “In a tectonic shift, energy independence is not unrealistic for the U.S. in as short a period as 10-20 years,” the report states. The 12 nations of OPEC, including Saudi Arabia, Iraq and Venezuela, produce more than 40% of the world’s oil, a volume that gives its production decisions influence over the crude prices, the single largest contributor to gasoline costs. In the report’s projections, total global crude output would exceed demand by more than 8 million barrels a day, at which point OPEC would lose price control and crude oil prices would collapse. The intelligence analysis says concern about the environmental impacts of fracking is the technology’s “greatest obstacle.” The full story is here.