"For the first time in my career, we actually have the ability to talk about real energy security or independence," said Foutch, 61, a burly Texas native with four decades experience in the oil business.
Technological innovation – primarily the growth of horizontal drilling and hydraulic fracturing, or "fracking" as it's commonly known – is driving the new production, enabling oil and gas to be extracted from geological formations once considered impregnable.
"The ability to drill these long reach horizontal wells into reservoirs we could never reach before was a big change for the industry," said Foutch, head of Oklahoma-based Laredo Petroleum.
Horizontal drilling is not new but the widespread application of it is. When combined with fracking, which uses highly pressurized water and sand to break through rock formations, usually shale, and "stimulate" the movement of hydrocarbons, it has made recoverable billions of more barrels of oil and vast stores of natural gas.
In 2003, there were 1,900 horizontal wells operating in the U.S. IHS estimates there were closer to 45,500 in 2012.
"One thing I can say with absolute certainty…is that our long-term forecasts are going to be wrong," Adam Sieminski, EIA administrator, said in a recent speech. "It looks like the direction we're going ... on oil is there's going to be more of it."
At the same time, the U.S. imported about 7.6 million barrels per day in February, a decline of 1.3 million barrels per day from the same time last year. And in 2012, U.S. oil demand – 18.56 million barrels per day -- was down 2 percent from the previous year and at its lowest level since 1996, the EIA said.
If those trends continue,
Yergin said, the U.S. will largely be able to wean itself off non-North American oil sources within a decade.
"The view I have is the U.S. will be a lot less dependent with
Canada," said Yergin, who also is CNBC's global energy analyst. "That will really reduce imports, combined with more fuel-efficient cars, reduce exports from outside North America.
We'll still be importing some but it's certainly a rebalancing of global oil. That oil that was coming to the United States will go somewhere else and that somewhere else would be Asia."
Canadian production is expected to increase to 6.5 million barrels per day, and even
Mexico is now expected to join the North America energy renaissance under a new government interested in exploiting its resources, according to
Citigroupresearch.
Since 2006, U.S. oil field production of crude, plus natural gas liquids and bio-fuels has grown by 3 million barrels a day, about the same as the total output of Iran, Iraq, or Venezuela. In the same period, Canadian production has grown by 510,000 barrels a day.
Citigroup analyst Edward Morse, said in an interview that the U.S. could in theory need to import only from Canada within five years.
Implications for U.S.
The already-low natural gas prices and anticipated decline in oil prices have many analysts projecting a ripple effect that will energize the long-moribund U.S. manufacturing sector. The Citigroup report, for examples, lists more than 30 companies expanding capacity in the U.S. because of cheaper energy.
Dow Chemical is on the list, and the company's CEO, Andrew Liveris, is outspoken about his belief that cheaper energy can bring manufacturing back to U.S. shores. Yergin, the energy analyst, said the industry supports 1.7 million jobs, a number that he says could grow to 3 million by 2020.
Such rosy estimates rely on the industry being able to surmount both logistical challenges and concerns among environmentalists, particularly fears of water contamination, seismic activity and methane gas release from fracking.
The biggest logistical hurdle is that the U.S. has insufficient pipelines to handle the growing supply. The industry has turned to rail shipping to help transport its oil to refineries, and more than half the oil in North Dakota travels out of the state by train.
"Our logistical system needs to catch up with these new supplies," said Yergin. "Five years ago, no one would have thought that North Dakota would be supplying oil to a refinery in Philadelphia."
But efforts to build new pipelines invariably run into opposition from environmentalists and residents whose homes and property they would bisect.
The most high-profile battle recently has been over the
Keystone XL pipeline, which would move crude from the Canadian sands to the Gulf Coast refineries. The plan to build the 1,700-plus-mile pipeline has drawn fierce opposition from environmentalists and some elected officials in the upper Midwest out of fears that a spill could contaminate the Ogallala Aquifer, which provides drinking water to 1.9 million people, according to the U.S. Geological Survey.
The fact that the dilute bitumen oil obtained from the so-called Canadian oil sands also requires additional energy to process has added to the outcry, said energy analyst John Kilduff of Again Capital.
"The extraction method utilizes natural gas so it's a crude oil that has a much higher carbon footprint than normal and it's the most corrosive type of crude oil, so the environmentalists do have some more arrows in their quiver to fight this, more than normal," he said.
Kilduff said he expects the pipeline to eventually gain approval from the White House after the State Department on March 1 said it found no major environmental reason to block it.
But such concerns have some in the oil and gas industry urging caution as domestic production ramps up.
Tinker, who leads the group studying the obtainable natural gas reserves in the various shale areas, says the growth of hydrocarbon energy supply should accompany growth in alternative energies and be used in conjunction with wind, solar and nuclear.
"It's part of a sensible energy portfolio," he said of drilling shale wells. "...You look at nuclear, renewables, you look at hydro. It makes sense to keep your portfolio diversified. I think it's important for policy makers and regulators and people investing in the industrial process to keep these things in mind."
Foutch, the CEO of
Laredo Petroleum, has the kind of brash optimism you'd expect from a Texan with a master's degree in petroleum engineering from the University of Houston and a background as an amateur rodeo cowboy.
He said the horizontal drilling era presents the country with an important opportunity, and is one reason he's still at the helm of Laredo after selling off two other drilling companies he founded, including one called Lariat.
"We thought we had two or three years of drilling opportunity captures in front of us, maybe four or five and that was a premium that other people would pay for and we sold the company," he said. "At Laredo, we've captured, depending on how you want to look at the numbers, 20 years or 25 years of drilling inventory of what appears to be high quality drilling potential."
That's not to say that America shouldn't develop other forms of energy, he said, but it can't afford to turn its back on one that is crucial to its future.
"The long term answer is the most critical one," he said. "We as a nation, we just won't recognize that hydrocarbons are here to stay as an energy source and it's a very high quality energy source, and we can do all we want with wind, solar and algae. I hope all that stuff works. … The fact of the matter is we are going to be using hydrocarbons for some time to come."
