The United States is producing so much oil now that it's become an oil-exporting nation! That's a claim you hear with increasing frequency, but like a lot of energy "news" lately, it's just plain wrong. In fact, we're still importing nearly 10 million barrels of oil per day. And the idea that we are exporting "oil" is even a half-truth, as about 98.5 percent of our petroleum exports are refined oil products like heating oil, diesel, and gasoline, rather than crude oil. We're exporting those products because, with decreasing demand for petroleum products, we have excess refinery capacity when much of the rest of the world doesn't have enough.
The current US "revolution" in oil production is led by what's often called shale oil (the correct technical term is tight oil) obtained by horizontal drilling and hydraulic fracturing, or "fracking." There have indeed been large increases in crude oil production in the US in the past decade, with an oil (and gas) boom in Texas and North Dakota, among other states. That's not in dispute.
What's not so clear is the future of this boom, and what we can expect in years to come. Positive spin—see the claim above—is plentiful, with projections of oil abundance reassuring consumers that oil crises are things of the past. But you don't have to look hard to see potential problems just over the horizon. Between 2000 and 2012, world oil production has risen from about 77.7 to 89.3 million barrels per day. That's a significant 15-percent increase, helped by the tight oil boom in the US. But how much did it cost to increase production by 15 percent? Capital Expenditures (Capex)—the capital invested to maintain oil industry resources, to explore and develop new resources, and to provide new plants and equipment—were about $250 billion in 2000. In 2012, Capex was a staggering $700 billion.
In other words, that 15-percent production increase required a 270-percent increase in Capex, comparing year to year. The statistical details might present a hazy picture, but the overall trend is clear: It costs ever more to find and exploit oil resources. Various "new" or unconventional oil sources currently supplement the dwindling supply of conventional crude oil, but these aren't cheaper. The International Energy Agency claims the cost premium for enhanced oil recovery can run $80 per barrel; for extra-heavy (tar sand) oil it's $90; Kerogen (true shale oil), $100-plus; Arctic oil, $100-plus; and Coal-to-Liquid (CTL) and Gas-to-Liquid (GTL) oil, $110-plus. At a current sales price of about $100 a barrel, it's easy to see that not all unconventional sources are economically viable.
What does this all mean for motorcyclists, and how might these developments change the motorcycles we are riding in the near future? At the time of the most recent oil price spike in 2008 there was serious talk of the need to improve fuel economy—and a small boom in scooter sales, as some consumers picked up fuel-efficient commuters to supplement gas-guzzling four wheelers—but much of that was abandoned once prices fell. The subsequent economic crisis certainly has prompted the motorcycle industry to develop a number of smaller, less expensive motorcycle models, and some of these show good fuel economy, but there haven't been any real technical breakthroughs in terms of fuel usage. Electric motorcycles are in the news, but the OEMs have been very cautious in their electric efforts to date.
Will we have another oil-price or oil-supply crisis? And will such a crisis lead to dramatic efforts to improve fuel economy? The answer to the first question is almost certainly, though no analyst can give a date. The answer to the second question is that we should hope the motorcycle industry leads the effort to match vehicle design and development with the increasingly apparent limits of the energy resources available to us. But we first have to see those limits clearly through the exaggeration and spin in which they're often disguised. That can be a tough job.