The United States has spent most of the past century trying to secure access to the world's oil supply. We've fought wars for oil. We've spent untold billions to ensure our economy had the access to the fuel it needed to keep on humming. Now, imagine the surprise as it turns out we have more than enough oil right here at home. It's an epic turn of events no one saw coming.
In fact, according to energy consulting firm Wood Mackenzie, North America will be energy independent by the end of this decade. Not only that, but the continent should be a net exporter of energy soon after. Talk about an amazing shift in the global energy picture.
It all started with natural gas. Not long ago it looked like we had only a handful of years left of natural gas production. Then the combination of hydraulic fracturing and horizontal drilling hit the mainstream, led by natural gas champions like Chesapeake Energy (NYSE:CHK) and Devon Energy (NYSE:DVN). It unlocked unimaginable natural gas resources right under our feet. Now conservative estimates put our natural gas reserves at more than enough to supply the nation for 100 years.
What's most incredible is that American energy companies had spent countless billions to build natural gas import facilities. Now those same facilities, including Cheniere Energy's (NYSEMKT:LNG) unfinished Sabine Pass site, are being turned around to export our excess natural gas. Cheniere's Sabine Pass plant is about 30% complete and should begin exporting liquefied natural gas by 2015. It's already planning to file applications to increase its export capacity further in the future.
Natural gas is just part of the story. It turned out that the same combination of hydraulic fracturing and horizontal drilling that unlocked shale gas could also be used to draw oil from shale. Companies like Continental Resources (NYSE:CLR) used it to begin to unlock the oil riches of the Bakken Shale of North Dakota. Because of that, the growth of the Bakken has simply been incredible. The oil shale play is still in the early stages of development and companies are finding more oil than ever dreamed. In fact, Continental is one of the companies leading the development of the Three Forks formation that sits beneath the Bakken. It's believed that it could hold as much recoverable oil as the Bakken itself, and combined the two could yield 20 billion barrels of recoverable crude. That's remarkable considering that the current proved oil reserves of the U.S. are just 29 billion barrels.
The Bakken is just one part of the shale oil story, as the Eagle Ford Shale of Texas has produced its own share of mind-blowing numbers. The Eagle Ford is probably the play that saved Chesapeake Energy. The Chesapeake-led explosion of shale gas drilling created a glut of natural gas, which crashed its price. However, the emergence of the oil-rich Eagle Ford enabled Chesapeake to shift gears and drill for more profitable oil. Overall, that has enabled the company to grow its oil production by 25% in the past year, which has helped to offset its oversized exposure to natural gas.
In thinking about oil, Canada will have a major role in North American energy independence. By 2020, the country should be producing about 4.9 million barrels of oil per day. That's up from 3.2 million barrels of oil per day last year, with virtually all of that growth coming from the oil sands region. Oil sand production is expected to grow from 1.8 million barrels per day to 3.2 million barrels per day by 2020.
There are a number of oil companies driving this growth. One example is ConocoPhillips (NYSE:COP)which is investing $5 billion through 2017 to grow its production by 100,000 barrels of oil per day. It's the largest driver among the company's major growth projects. Devon is also investing heavily to increase its oil draw in Canada, with the company projected to grow its oil sands production by 17%-20% annually through 2020. The oil sands production will not only drive the returns of both companies, but it will help secure North America's energy future.
It's truly remarkable to see North America on pace to become energy independent. What's amazing is how rapidly our energy picture has changed over the last few years. It's really great news for our nation. Let the countdown to independence begin.
How to Invest in the North American Energy Bonanza
Fool contributor Matt DiLallo owns shares of ConocoPhillips. The Motley Fool owns shares of Devon Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.