A pumpjack operates at the Inglewood Oil field in Los Angeles, California, U.S., on Thursday, Oct. 19, 2012. (Patrick Fallon/BLOOMBERG)

When we think of innovation in the energy sector, we typically think of companies exploring alternative energy solutions, such as wind , solar or even nuclear. But something very interesting is taking place with enormous implications for both U.S. economic policy and foreign policy. The latest report on the global energy industry from the International Energy Agency (IEA) shows that the U.S. will become a net oil exporter by the year 2020 and energy independent by the year 2035. We’ll actually be pumping more oil than Saudi Arabia by 2017 - and pumping more than is needed to keep our economy moving shortly thereafter - and it’s all due to our remarkable ability to extract oil from places that never used to be possible. In short, technological innovation is making it possible for America to become energy independent far sooner than we ever expected.

How did this happen?

For one, we haven’t been giving the big oil companies enough credit. Sure, we may see their print ads or watch as they tout their accomplishments on TV, but deep down, many of us believe that the brightest minds have moved on to something new in energy innovation. But that’s not true. last year, Morgan Stanley pointed out the U.S. oil industry was undergoing a "renaissance" as it moved quickly to explore new technologies for oil extraction. (In a follow-up report this year called "Shale Shock II," Morgan Stanley re-upped its thesis.) Forget all the talk we heard about boring ol’ coal during the election. The U.S. oil industry is aggressively exploring exciting areas like biofuels and liquid hydrocarbons.

Secondly, many of us have completely missed one of the greatest geopolitical shifts of our era. Amidst all the discussion of global peak oil and the often contentious debates over dipping into U.S. strategic oil reserves, there’s actually a lot of oil in North America that we simply couldn’t get to until now. The three best examples are the Rocky Mountain shale deposits, the tar sands of Alberta and the deepwater fields off the coast of Mexico. The Telegraph’s Ambrose Evans-Pritchard reports that, by some accounts, there's twice as much shale oil trapped in the Bakken Formation of North Dakota as in the entire Prudhoe Bay of Alaska. And, using new technologies, it’s now possible to extract that oil in ways that are increasingly efficient. As a result, the center of gravity of the global oil industry is shifting to North America and away from the Middle East or Russia.

However, does all this innovation come with a high price? For example, the reason that we’re able to get all that oil and gas out of places like the shale formations of the Rocky Mountains is because we’ve invented a nifty little process called “hydraulic fracturing,” better known by its street name: "fracking." And fracking has become one of those hot-button issues in communities where there are very real concerns about the quality of the local water supplies. In the process of fracking — or blasting apart rock formations that hold oil using high-pressure water stream — there’s evidence — albeit disputed — that it could lead to contaminated water supplies.

And that’s not all. There are two sides of the coin for energy independence: the production side and the consumption side. Even if we concede that the production side has been solved thanks to technological innovation, there’s still the consumption side. The IEA, in its report, predicted shrinking oil demand over time. But does that square with what we see in everyday life? As long as our economy is dependent upon oil and as long as we ignore important energy-saving measures in our everyday lives, energy independence could be further off than predicted. If we’re going to realize all the benefits from American energy independence, we’ve got to make sure that we go about this the right way — with breakthrough innovations that solve the supply problem and radical new behaviors that solve the demand problem.

Dominic Basulto is a digital thinker at Bond Strategy and Influence (formerly called Electric Artists) in New York. Prior to Bond Strategy and Influence, he was the editor of Fortune’s Business Innovation Insider and a founding member of Corante.com, one of the Web's first blog media companies. He also shares his thoughts on innovation on the Big Think Endless Innovation blog and is working on a new book on innovation called "Endless Innovation, Most Beautiful and Most Wonderful."

Read more news and ideas on Innovations:

Aaron Sorkin releases details on Steve Jobs biopic

Celebrities weigh in on innovation

Titan officially world’s fastest supercomputer