A lot of media outlets ran with the story. But just how realistic is it?
As I outline in my upcoming book "Shale Boom, Shale Bust," this idea of "Saudi America" is a myth that will never come to fruition and is a worthless goal to pursue.
The idea of being completely energy self-reliant is seductive. Without a need for imports, we would not only be able to keep energy expenditures inside the U.S. economy, we could also be far less engaged in the politics of our energy suppliers in the Middle East.
We might even begin to re-attract the manufacturers who left the United States in the wake of soaring energy costs.
Oil from shale has been the biggest reason for inspiring the dream of "Saudi America" and American energy independence. Since 2009, oil production from shale has doubled and the Energy Information Agency (EIA) has recently predicted that US oil production will continue to increase until 2020 to peak at more than 10 million barrels a day.
All of that domestic oil will run into a real demand drop here in the US -- and promises that more and more of the energy we use will be home-grown.
So, what's the problem? Well, the problem comes down to price. Of the 3 largest oil producers in the world, the U.S., Russia and Saudi Arabia, U.S. production is still the most expensive by a very large margin.
Indeed, more than a third of all the oil produced in the world comes from OPEC members, with break-even prices in many cases still below $20 per barrel.
That is a far cry from the price that shale producers need to get to make their oil worth drilling for. In many cases, break-even prices for shale producers are over $70 a barrel.
So, oil prices will have to be fairly high indeed -- and moreover steady at those high prices -- to convince US oil producers to continue to provide the volumes of oil that the EIA is predicting and others are dreaming about on the road to energy independence.
In the past, the "job" of keeping energy prices high fell to a large degree on OPEC and particularly the swing production provided by Saudi Arabia.
But the latest collapse of oil prices has brought a real abdication of that responsibility from the Saudis and OPEC -- both by choice and through distressed market forces.
The "bust in shale" that we're witnessing now is a proof that the markets are no longer safe from large, production-based price moves in oil -- both to the upside as we saw in 2007 and 2010, and to the downside, as we saw in 2008 and are seeing today.
That makes U.S. shale producers constantly on guard and ultimately the most sensitive participants in the global oil chain. Because they must react to price and react quickly, it will be difficult for them to continue to ramp up production in the way that the EIA, and others, expect.
I don't believe the U.S. will ever have the kind of consistent production needed to completely cut our ties with foreign oil. I believe, in fact, that the idea of "Saudi America" is a hopeful myth never to come true.
The unreliable price of crude oil, proven most recently by this year's collapse, will make complete U.S. energy independence impossible.