It's happening. The revolution in oil and gas is happening. You just need to know where to look for it. We see it in Valero Energy (VLO), the world's largest independent refinery, which reported phenomenal earnings Tuesday morning, in large part because of the incredible boom in U.S. drilling.

While there were many positives in the quarter, the best fourth quarter since 2005, when cars were using much more gasoline, Valero gave you this amazing morsel: "We replaced all imported light foreign crude oils with cheaper domestic crude oils at our Gulf Coast and Memphis refineries. Since we expect U.S. and Canadian crude oils to become increasingly available, we are pursuing options to process additional volumes of these cost-advantaged crudes throughout our refining system."

In other words, because of the Bakken and the Eagle Ford and so many other terrific domestic prospects, one of our major refinery powers doesn't need to import expensive oil from other countries to feed its refineries, and this trend is only going to get stronger.

This change is dramatic for shareholders of Valero, because prices at the U.S. pump are reflecting the formerly imported crude, which is now touching $100 a barrel. The difference is monumental and could cause Valero to go much higher as the marketplace takes into account how Valero has become the most aggressive company to take advantage of our newfound, technologically derived oil riches. Only HollyFrontier (HFC), which hit a 52-week high, remains undervalued.

This disparity between cheap, cleaner domestic oil and expensive imported crude is one of the reasons I was so aggressive in telling you that the value of Hess (HES) is well in excess of what it is selling for.

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The very tough-minded Elliott Management has taken a big stake in Hess and is pushing for Hess to spin off its Bakken, Eagle Ford and Utica Holdings, which are all fabulous properties. The other day, Hess committed to getting out of its expensive and nonproductive East Coast refinery and terminal network, which is dedicated to importing the expensive crude that Valero no longer has to contend with at its Memphis and Gulf Coast refineries. The lack of pipe inhibits Hess from taking advantage of all of that terrific U.S. crude.

Elliott contends that the spinoff could double the value of the company, and it is even proposing its own slate of what would be very smart directors, including some respected oil men, but to me this feels as if Elliott won't be happy until the whole company is put up for sale.

There are two important takeaways here. The first is that the marketplace is still well behind in recognizing the worth of our domestic oil, particularly with the $100 worldwide crude umbrella. The second is that if we had an energy policy in Washington that actually incorporated the domestic oil and bountiful natural gas into its thinking, we could smash OPEC, clean our skies, right our trade balances, become the cheapest place on earth to do business and put millions of people to work doing so.

Instead, we haven't figured out a way to leverage the oil, and we are barely scratching the surface of natural gas use. Ford (F) admitted to me that there simply isn't enough natural gas infrastructure to sell nat-gas cars and trucks against, and there won't be any anytime soon.

What a sad set of circumstances. I guess we should be grateful that at least Valero has figured out a way to profit from it.

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.

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