Blame it on the Permian Basin. Or just blame it on ourselves, since both of the success and demise of oil are in our hands.
In the current state of the oil and gas industry, the Bakken in North Dakota is producing an awesome 1.1 million barrels a day. The Eagle Ford region is producing a whopping 1.5 million barrels a day. But the Permian upstages them all, and is producing an amazing 1.7 million barrels: which could double in the next two years.
That's right. Jim Cramer said it could double.
Magellan Midstream Partners CEO Mike Mears spoke with the "Mad Money" host on Thursday to give additional color about just how realistic this claim could be. Magellan Midstream runs the pipelines out of the Permian and is an authority on the matter. Mears confirmed that they are seeing the numbers jump every day, and that he can't rule this theory out.
Mears says that right now the country has enough storage for the oil that is being produced, but if the levels continue to jump we will not have the proper storage or refining capacity to handle the oil.
Concerned, Cramer thinks the decline in oil price is a very big issue for the economy.
Currently, the oil boom is self-fulfilling at this pace. Based on this new information, Cramer said that talks of being self-sufficient by 2020 are off the table. At this pace, it could be three years.
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But without the proper storage, we will have to cut back on drilling. And if oil prices continue to keep going down, budgets will be cut as well.
In other words, Cramer thinks that oil is sowing the seeds of its own demise, being pushed along by OPEC countries that don't want the U.S. to be self-sufficient.
"Think about it. We have no energy policy. We don't have a fossil fuel friendly president who sees what is about to happen: overproduction with no place to put the oil," Cramer added.
This might just be a nightmare scenario, but with no government to prevent it and given how stocks have been pricing lately, Cramer thinks this could indeed become a reality.
Call Cramer: 1-800-743-CNBC
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