Posted August 27, 2014
USAToday Editorial: There is much news these days from the world's major energy producing regions. Almost none of it is good.
Iraq, Libya and Syria are in turmoil. Russia, the world's largest exporter of natural gas and the second largest exporter of oil, is bullying Ukraine and by extension Western Europe. And Iran's nuclear program may yet provoke a market-roiling conflict.
Amazingly, as all this has transpired, U.S. gasoline prices have been stable, even falling. The domestic economy is picking up steam. And the stock market has hit all-time highs.
Go figure. Perhaps the markets are in denial and Americans are in for an ugly surprise. They were blindsided in 1973 when an Arab oil boycott led to higher prices and long gas lines, and again in 1979 when the Iranian revolution led to a second oil shock.
But there are legitimate reasons why things would look relatively good here while so much of the world burns. First among them is a U.S. energy renaissance that has left the nation far less dependent on Mideast oil.
Posted August 21, 2014
There’s much good to report from this week’s federal offshore drilling lease auction for the western Gulf of Mexico. But we can do better.
The good: nearly $110 million in apparent high bids over 81 blocks covering more than 430,000 acres, according to the U.S. Bureau of Ocean Energy Management (BOEM). The bid total represents a moderate increase over last year’s western Gulf sale that generated slightly more than $102 million in bids. BOEM estimates the sale eventually could yield 116 million to 200 million barrels of oil and 538 billion cubic feet (bcf) to 938 bcf of natural gas.
Broadly speaking, the fact that the federal government conducted an offshore lease sale is in itself encouraging. Development of vast offshore oil and natural gas reserves starts with leasing areas for exploration. That’s where we can do better. More sales are needed to begin the process of finding and developing offshore energy on the outer continental shelf, 87 percent of which is off limits by policy.
Posted August 20, 2014
North Carolina is about to join America’s energy revolution. This week the state’s Mining and Energy Commissions (MEC) conducted the first of four scheduled public hearings on proposed hydraulic fracturing regulations, the final adoption of which could allow fracking as early as next spring.
The MEC hearings mark the close of a two-year process to lift a 2012 moratorium on hydraulic fracturing in North Carolina. The presence of vast shale reserves and the marriage of safe, responsible hydraulic fracturing and horizontal drilling launched the U.S. energy revolution – with stunning results. The U.S. is now the world’s leading natural gas producer and could become No. 1 in oil output next year, according to the International Energy Agency – generating thousands of new jobs and boosting the national economy.
While North Carolina doesn’t have energy-bearing shale deposits as large as those in Texas, North Dakota, Pennsylvania and other states, it has enough to create jobs and help its economy.
Posted August 12, 2014
Wall Street Journal (subscription required): When House Republicans took up a measure to speed the government's reviews of applications to export natural gas, a move long sought by energy companies, the unexpected happened: The bill won "yes" votes from 47 Democrats.
The bill's sponsor, Rep. Cory Gardner (R., Colo.), anticipated some Democratic backing, but not that much. Rep. Steve Israel of New York, who leads the Democrats' House campaign arm, was a yes, as was House Minority Whip Steny Hoyer of Maryland. Both voted in 2012 to restrict oil and gas exports.
The energy boom is shaping a new kind of Democrat in national politics, lawmakers who are giving greater support to the oil and gas industry even at the risk of alienating environmental groups, a core of the party's base. The trend comes as oil-and-gas production moves beyond America's traditionally energy-rich states, a development that also is increasing U.S. geopolitical influence abroad.
Posted August 5, 2014
A couple of snapshots of America’s shale energy boom, with a h/t to the U.S. Energy Information Administration.
First, Marcellus Shale natural gas production topped 15 billion cubic feet per day (bcf/d) through July, a first. EIA reports that the Marcellus accounts for 40 percent of U.S. shale gas production. Output has grown to its current level from 2 bcf/d in 2010.
Posted July 30, 2014
The quest to encourage better behavior from Russia continues. President Obama and the European Union this week announced new sanctions to protest Russia’s involvement in Ukraine, measures that focus on Russia’s energy, arms and finance sectors. The president:
“Today … the United States is imposing new sanctions in key sectors of the Russian economy: energy, arms, and finance. We’re blocking the exports of specific goods and technologies to the Russian energy sector. We’re expanding our sanctions to more Russian banks and defense companies. And we’re formally suspending credit that encourages exports to Russia and financing for economic development projects in Russia. At the same time, the European Union is joining us in imposing major sanctions on Russia – its most significant and wide-ranging sanctions to date.”
Meanwhile, former Secretary of State Hillary Clinton says Europe needs to stand up to Russia, which will be easier to do if Europe diversifies its energy supplies:
“They need to understand they must stand up to [Russian President] Vladimir Putin. The reluctance has to do with European dependence on energy from Russia.”
Laudable sentiments and goals, but America can do more than impose targeted and inherently limited sanctions. The U.S. can do more than talk. America can do more to provide effective help for her friends and to diminish the influence of adversaries. Through energy, American energy.
Posted July 22, 2014
Interesting question: Might climate change laws and regulations negatively impact the value of oil reserves held by energy companies, to the point of “stranding” them, ultimately affecting shareholders? Two companies, ExxonMobil and Shell, essentially have told their shareholders, no – because projected increases in global energy demand will continue to require all viable energy sources, including oil and natural gas, into the foreseeable future. From ExxonMobil’s report to shareholders:
For several years, our Outlook for Energy has explicitly accounted for the prospect of policies regulating greenhouse gas emissions (GHG). This factor, among many others, has informed investments decisions that have led ExxonMobil to become the leading producer of cleaner-burning natural gas in the United States, for example. Based on this analysis, we are confident that none of our hydrocarbon reserves are now or will become “stranded.” We believe producing these assets is essential to meeting growing energy demand worldwide, and in preventing consumers – especially those in the least developed and most vulnerable economies – from themselves becoming stranded in the global pursuit of higher living standards and greater economic opportunity.
Posted July 21, 2014
The recent International Oil Spill Conference (IOSC) in Savannah, Ga., underscored the oil and natural gas industry’s continuing commitment to safe energy development – using new technologies and deployed expertise to quickly and appropriately respond in the event of an accidental spill.
Below, check out a new video featuring conference attendees, talking about IOSC’s valuable role in bringing together experts, service providers and government officials in the broad effort to keep improving the safety of offshore oil and natural gas development.
Posted July 17, 2014
We like to bring attention to good-news energy stories from states like North Dakota (also here and here) because the oil and natural gas development there is creating good-paying jobs for Americans, generating opportunity and lifting economies. The great news is that the benefits from the U.S. energy revolution are being felt in a number of places.
A new study shows the tremendous positive impacts of energy development in Louisiana, the nation’s No. 2 crude oil producer at nearly 1.45 million barrels per day when federal offshore production is included, and No. 2 in petroleum refining capacity.
The quick story: Louisiana has embraced oil and natural gas development, and oil and natural gas development has embraced Louisiana – with jobs, economic stimulus and revenues for state and local governments. This is clear from the study of the state impact of the oil and natural gas extraction, refining and pipeline industries by economist Loren C. Scott.
Posted July 16, 2014
The federal Bureau of Ocean Energy Management (BOEM) has newly revised resource estimates for the Atlantic outer continental shelf (OCS). Are you sitting down?
BOEM now believes areas within the 200 nautical mile U.S. Exclusive Economic Zone off the Atlantic Coast, from Maine to Florida, could hold 4.72 billion barrels of technically recoverable oil and 37.51 trillion cubic feet of technically recoverable natural gas. Those numbers are 43 percent and 20 percent higher, respectively, than the last government estimate of the Atlantic OCS done in 2011.