Several recent stories dramatically underscore the fact that the revolution in oil and natural gas production is continuing to cause profound long-term economic and geopolitical effects.

The first piece reminds us anew of the Schumpeterian point that when technological innovation creates economic progress, there are winners -- typically, the entrepreneurs who advance or at least embrace that innovation -- and losers, including businesses that do things the old way.  It is a WSJ report to the effect that while the oil and gas boom brought great rewards to smaller, more nimble companies such as Chesapeake Energy and EOG Resources, the really big oil companies such as Chevron, Exxon Mobil, and Royal Dutch Shell are struggling to catch up -- despite their much bigger revenues.

It turns out that the new technologies, which utilizes horizontal drilling and hydraulic fracturing to exploit America's vast resources of oil and natural gas contained in our immense shale formations, is something the three major oil companies (Chevron, Exxon, and Shell) embraced rather slowly.  As one oil specialist puts it, "...they bought in late in the game, and it's hit or miss.... Whether it pays off is going to be highly dependent on what happens to energy prices."

For example, Shell hasn't been very effective at extracting oil from its U.S. shale holdings, and the company just announced that the holdings are worth $2.2 billion less than prior estimates.  That write-down lowered its earnings by 60% over the last year.  Shell class A shares have dropped 5%.

And Exxon is still hurting from the push into shale gas three years ago, because since then the price of natural gas has dropped greatly.  That year, it spent $25 billion to acquire a shale-gas company.  It, too, has seen a nearly 60% drop in its earnings.

These three Big Oil icons are spending $111 billion collectively to find new oil -- 8% more than last year -- as the traditional "easing pickings" reserves in Mexico and the Middle East are playing out.

But despite the fact that Big Oil is behind the curve compared to small oil, the good news is that the federal government's own Energy Information Administration (EIA) reports that oil companies have now raised their estimates of oil reserves by 3.8 billion barrels (BBO) in 2011, a record yearly increase since record-keeping began 35 years ago.  The EIA now puts estimates of American profitably recoverable oil reserves at 29 BBO, the largest since 1985.  And the EIA says natural gas reserves have grown by nearly 10% since last year, to 348.8 trillion cubic feet.

So much for Green neo-pagan Malthusian projections that America would run out of fossil fuel energy soon.  What a ridiculous joke -- or a Big Lie, whichever you prefer.

Switching to an interesting geopolitical take on America's historic resurrection as an fossil fuel giant, we have the story out of Saudi Arabia of growing worries there that the U.S. -- long dependent upon (hence ripped off by) the Middle East -- is rapidly becoming energy-independent, and will soon become an exporting rival to the greedy gang of kleptocrats called OPEC.

One billionaire Saudi "investor," Prince Awaleed bin Talal, has just lamented that Saudi Arabia's economy is now threatened by competition from the U.S. because of the fracking revolution.  He bawled that "[o]ur country is facing continuous threat because of its almost total dependency on oil."  He added, "... we see that rising North American shale gas production is an inevitable threat."

Talal is, of course, correct: Saudi Arabia is the world's biggest petroleum exporter, raking in $336 billion a year, which is 92% of the country's revenue.  And as a key member of the oil cartel OPEC, it helped drive America to the brink of economic collapse back in the 1970s.

But as the saying goes, if you live by the scimitar, you die by the scimitar.  OPEC admits that its exports to the U.S. are now at a 15-year low.  And while OPEC is raking in a record $1.26 trillion from exports -- demand continues to rise in Asia -- the International Energy Agency is predicting that the prices for OPEC oil will drop sharply over the next five years.

Imagine if we had an administration that actually encouraged domestic production of oil and natural gas, instead of dramatically discouraging it -- by cutting back on leases for development of resources under public lands and piling on ridiculous regulations on the production on private lands, as the grotesquely Green regime is doing.  We would achieve true energy-independence at last.

Not only is the increasing production in the U.S. worrying the OPEC leeches, but rising production in Canada is worrisome to them as well.  And U.K. Chancellor George Osborne is calling for his country to start fracking operations in Britain and its offshore territory.

The Saudis are now taking some baby steps to move their economy past oil, such as planning nuclear and solar power plants, financing small entrepreneurs, and liberalizing some of its key industry sectors.  But it is clearly vulnerable.

Mexico is also being forced to make changes.  A recent WSJ piece reports that the Mexican government is introducing a bill to change the constitution that will allow private companies -- including foreign-owned ones -- to partner with the state-owned oil monopoly Petroleos Mexicanos (Pemex).  This would be the biggest change in Pemex since the country nationalized the oil industry in 1938.  (Mexico was the first country to do so, and the move was rapidly emulated by most other developing nations with large oil resources.)

The bill would also liberalize the country's socialized electricity industry, the Federal Electricity Commission (FEC).  The bill would end the FEC monopoly, allowing private companies -- which already produce about a third of the nation's power in "partnership" with the FEC -- to expand and flourish.

Mexico is being forced to take these steps because its energy sectors are notoriously inefficient, and this is beginning to badly hurt the country's economy.  Pemex's total petroleum production has fallen steadily for ten years now, hitting a low of 2.5 million barrels a day -- even though Pemex has dramatically increased its R&D budget for finding and exploiting new sources of petroleum by 500% over the same time period (hitting $20 billion a year).  In fact, Mexico has been importing ever greater amounts of gasoline and natural gas, with imports of natural gas growing exponentially over the last four years (hitting the current rate of over 1 billion cubic feet of natural gas per day).  Half of what the country earns on oil exports now goes to cover these imports of refined fuel and natural gas.  This is scandalous, given Mexico's huge petroleum and gas reserves.

The reality is that the most knowledgeable companies when it comes to exploiting shale and other hard-to-develop sources of oil and gas are private ones, naturally -- where has socialism ever worked? -- and they are mostly American.  By way of illustration, Pemex has produced only three shale gas wells, compared to the 9,100 undertaken just last year in the U.S. (by 170 different companies).  And Pemex lacks the expertise to exploit the estimated 87 BBO in the deep waters of the Gulf, which only American and European companies now have.

The prospects for this reform passing seem good, because not only does the liberal party in power (the Institutional Revolutionary Party) support it, but so does the conservative opposition party (the National Action Party).  However, it does face fierce opposition by the extreme left.  The socialist party past presidential candidate Andres Manuel Lopez Obrador has characterized the bill as "treason."

If America elects a pro-market, economically literate president in 2016, we could very easily break the back of our vicious enemy OPEC once and for all.  This is one compelling reason to support such a candidate.

Gary Jason is a philosopher and a senior editor of Liberty. He is the author of Philosophic Thoughts: Essays on Logic and Philosophy, forthcoming through Peter Lang Publishing.