So the United States is going to become a bigger oil producer than Saudi Arabia, according to the International Energy Agency.
At first glance, this is vindication, both for America's hyper-entrepreneurial energy sector, and, paradoxically, for its infamously incoherent energy policies.
The IEA's news was greeted by a predictable chorus of bullish headlines suggesting major benefits lie ahead.
The new forecast sees the United States lifting oil output (a term that includes natural gas liquids) to 11.1m barrels per day by 2020, some 500,000 bpd more than Saudi Arabia.
That is enough to cut net oil imports to less than 6 million bpd by that year, less than half the level of 2005.
Less spending on oil imports could supercharge the economy. Perhaps even the holy grail of a return to the time of cheap(ish) gasoline is at hand.
But a closer look at the IEA's forecast reveals awkward truths for all sides of the United States' energy policy debate.
First, conservation accounts for more of the reduction in the oil import requirement than new drilling. Although the IEA sees US oil production slowly declining from 2020, it expects conservation policies to have a dramatic impact from that point.
America's net oil import requirement falls below 4m bpd by 2035, according to the IEA forecast, even as oil output declines 1.9m bpd from the 2020 peak.
The conservation part of the scenario looks likely to come to pass. Last week's presidential election was a defeat for America's oil industry, which spent heavily and openly in its vain attempt to unseat President Barack Obama.
The majority of voters, particularly in key "swing states" ignored calls to "vote4energy" or to end the "war on coal."
Similarly, predictions that Obama's rejection of the Keystone XL pipeline would prove to be his Waterloo were equally unfounded. Nor did challenger Mitt Romney win votes by saying he would roll back Obama's tighter fuel efficiency standards for new cars.
Voters either wanted Obama's energy policies or did not care enough about them to get rid of him. Either way, his conservation measures will stay in place and may well be strengthened.
However the supply side of the IEA's equation may be harder to square. After loudly backing the president's opponent in the election, the oil industry now needs Obama's support to actually achieve the promised production growth.
The industry's problem is that much of the new "oil" is, for lack of a better word, the "wrong" kind of oil.
A third of the projected 3m bpd increase in production by 2020 will be in the form of natural gas liquids, such as propane and ethane.
That's a problem because the United States is already self-sufficient in NGLs. Already, domestic NGL prices have crashed as infrastructure bottlenecks and limited incremental demand put buyers in the driver's seat.
Although plans are afoot to expand petrochemical facilities to absorb some of this new supply, exports will be needed to balance the equation as large-scale conversion of NGLs to transport fuels would require enormous investments.
Fortunately for the energy industry, NGLs can be legally exported with few restrictions. At least in this case, the United States will be able to exchange volumes of "oil" with the global market to optimally meet its own needs.
But those rules do not apply to crude oil.
Burgeoning light crude supplies are unfortunately mismatched when it comes to the United States' most efficient refineries, which are set up to process heavy crude.
Under some circumstances, that is not such a big problem. Units can be modified or mothballed to run lighter barrels, particularly when prices are highly favorable.
But when the domestic market looks set to shrink dramatically, refiners will be very reluctant to invest in any capacity that does not offer a very quick payback.
Plunging oil demand due to conservation augurs another round of blood-letting in the US refining sector.
The IEA expects US oil demand in 2020 at only 16.6m bpd, down 2m bpd from today's levels.
And the shirking accelerates after 2020. Only five years later, the market slides to 15.4m bpd. By 2035, oil demand is a mere 12.6m bpd.
But already the United States is a net oil product exporter. Slumping domestic demand will further force its refineries into the export market or to shut down.
Closures are more likely as refining capacity worldwide is on the rise, with many countries pursuing aggressive efforts to limit their reliance on imported refined products.
These facts mean two things.
First, American consumers are unlikely to ever see a prolonged period of decoupling between US fuel prices and global fuel prices since surplus gasoline and diesel will be exported.
Second, bans on US crude exports risk bouts of oil price crashes as inland refineries shut down as casualties of the shrinking domestic market and their inherent lack of competitiveness in coastal export markets.
Repeated oil gluts are likely to undermine investors' willingness to fund the expansion of oil production to the degree envisaged by the IEA.
A simple solution beckons: unrestricted crude oil exports. This would protect the domestic upstream sector from disruptive price crashes while not affecting consumers, who would already be paying world prices for fuel anyway.
Ignorance pervades thinking on this issue, however. Many politicians and voters see export bans as the solution to high oil prices.
Here the energy industry could play a role, educating the public on the implications that America's energy conservation policy has for oil production.
But now the risk lies in the possibility that the industry's intransigence in the election has alienated enough politicians that they will block oil exports for years to come, even as the refinery shakeout ensues.
The United States, like many other countries, is about to learn that geology is only a necessary, but not sufficient, condition of being an oil superpower.
* By Robert Campbell for Reuters
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