2014 Archives

Economist to truckers: ‘OPEC has become irrelevant’

Excerpt

The following is from the Sept. 26, 2014, edition of The Omaha World-Herald and concerns a speech by Bernard Weinstein, economist and associate director of SMU's Maguire Energy Institute.

October 2, 2014

By Russell Hubbard
World-Herald Staff Writer

There was a message Thursday at the Nebraska Trucking Association Management Conference for everyone who drives a motor vehicle: The United States is now what OPEC used to be when it comes to oil production.

U.S. oil production has risen 60 percent in recent years, said Bernard Weinstein, an energy economist at Southern Methodist University, in a speech and multimedia presentation during the conference held at the Omaha Marriott. Most of the increase, he said, has come from oil held in shale rock formations such as those in North Dakota that have been exploited using fracking and horizontal drilling techniques.

“It no longer really matters what happens in the Middle East,” Weinstein said. “OPEC has become irrelevant.”

Weinstein’s audience was made up of Nebraska truckers, whose major expenses include the diesel fuel that makes their vehicles go. The price of diesel, a distillate of crude oil, has risen 45 percent in the past five years, to about $3.80 a gallon this week, according to the U.S. Energy Information Administration.

The price increase hasn’t been because of a shortfall in domestic oil production, Weinstein said. U.S. crude production hit 256 million barrels per month in June, from fewer than 155 million barrels a month in June 2006, according to EIA. At current rates of about 11 million barrels per day, the U.S. leads Saudi Arabia as the world’s top crude producer.

Weinstein said he cringes when people say the United States needs to work toward energy independence.

“We have already done that,” he said. “Imports from OPEC account for 8 percent of U.S. consumption.”

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