Blowout
NPR argues that the new oil capital of the world may soon be in North America. “By 2017, investment bank Goldman Sachs predicts the US could be poised to pass Saudi Arabia and overtake Russia as the world’s largest oil producer.”
Amy Myers Jaffe of Rice University says in the next decade, new oil in the US, Canada and South America could change the center of gravity of the entire global energy supply.
“Some are now saying, in five or 10 years’ time, we’re a major oil-producing region, where our production is going up,” she says.
The US, Jaffe says, could have 2 trillion barrels of oil waiting to be drilled. South America could hold another 2 trillion. And Canada? 2.4 trillion. That’s compared to just 1.2 trillion in the Middle East and north Africa.
Jaffe says those new oil reserves, combined with growing turmoil in the Middle East, will “absolutely propel more and more investment into the energy resources in the Americas.”
The potential changes have crept up unseen in the news narrative. Who would have named the Utica Shale formation, for example, as anything to do with anything? But the National Review says one author believes that huge shale deposits are poised to make Ohio an economic powerhouse. But there’s a fly in the ointment: the technology which has made these vast new recoveries possible are “environmentally controversial”.
It would be, wouldn’t it? The EPA is holding hearings “on the Environmental Protection Agency’s proposed rules aimed at limiting pollution at oil and gas wells.”
The agency is proposing standards to curb hydraulic fracturing, or “fracking,” by requiring operators to capture and sell natural gas that now escapes into the air. Thursday’s EPA hearing was held in a region with a vast area of urban drilling atop the natural gas-rich Barnett Shale. The EPA’s proposal would apply new pollution control standards to about 25,000 gas wells that are hydraulically fractured each year.
While industry representatives touted the jobs and prosperity that drilling brings, critics argued it’s not worth the environmental risk of toxic spills, scattered drill site explosions, tainted drinking water and polluted air.
“No Fracking Way” is the slogan of Canadian environmentalists who argue that the technology will contaminate the groundwater, poison the Great Lakes and turn municipal faucets into Zippo lighters.
The Wall Street Journal reports that in anticipation of the potential boom, the argument over appropriate standards is now raging all across the regulatory spectrum. “The new rules also target methane, the primary ingredient in natural gas and, says the EPA, especially potent at trapping heat in the atmosphere.”
A cynic might argue that the hearings are as much about money as they are about clean air and water. Green has more than one meaning. “Shale gas is a game-changer,” said Kerry Guy of the Canadian Association of Petroleum Producers. “We now find ourselves with accessible resources that we think can be economically recovered that are more than 100 years of supply [at current demand].”
Everyone is going to want a piece of the action. This sudden access to energy may also be a political game changer. Small towns are going to suddenly be important places. Many of the legacy institutional problems which were thought to be on the verge of extinction during the recession will gain a new lease on life. Unions, government regulations, guaranteed pensions, local building booms — every unsustainable thing that is Too Big To Fail — will suddenly become sustainable again for a while. Although the public policy focus of the new oil boom has been environmental quality, it is perhaps the shadow boom in the sutlers of the army of petroleum that may prove to be its lasting legacy.
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It’s really sad — seeing the Al Jazeera logo in the frame tells me that even though they’ll have a pro-Islamic point of view, I’m likely to get more factually verifiable information from them than from most U.S. Mainstream “News” services.
Researchers could announce a new source of unlimited electric power using the earth’s magnetic field, replenished by the solar wind and allowing you to plug appliances directly into the ground, and environmentalists will stop it because it affects the pollen-gathering navigation system of the Leopard Lacewing butterfly.
We have met the enemy, and it is the EPA.
History seems full of dramatic twists and turns. Recently we saw the spectacle of the Middle East converted in two generations from an economy of pearl-gathering, small trading and herding to petroleum. In the next two years we may see the region return to a subsistence economy, as it collapses under the market pressure of new oil kings of the world.
Maybe the caravans will graze in the moldering shadow of what were once the tallest buildings in the world and the merchants will wonder who built them?
So maybe Beijing isn’t going to be the new capital of the universe. Who would have thought it would be Cuhayoga Falls. Or maybe not. For just soon as an act begins, yet another scene is waiting in the wings. History is apparently full of nearly sure things that never quite quite happened.
#2 Teresita – Heh, that was good. And actually, there is more than an element of truth in your post. There are many “environmentalists” who are simply against modernity. Who think that humans are a plague upon the world. I’ve met some of them.
1) The good news: we have plenty of oil and gas in the ground
2) The bad news: we have plenty of oil and gas in the ground
It’s obscene to watch the EPA and its allies sabotage the American economy at a time like this. I’m certain we can’t discount all environmental concerns with frakking, but you can bet serious money that it is being grossly exaggerated.
What Wretchard alludes to regarding the ironic consequences of prosperity is worth noting: free-market forces, or something very similar, will bring wealth that their ideological enemies will want to syphon off, and with the full acquiesence of a majority of the population. Fiscal discipline ought to involve holding the line even in prosperous times, but, hey, good luck with that.
If this oil rig is rockin’ don’t bother knockin’.
The potential for small business people to make money in ND seems quite high. In the 1849 Gold Rush, the merchants often made more than the gold miners. Infrastructure has to be built and towns in the middle of nowhere need every service there is when their population skyrockets.
I wonder if lots of people will move to ND? Seems like I remember Rush Limbaugh a long time ago commenting on the fact that you have to move to where the jobs are when you are unemployed.
That is hard to pull off when your family is living in an “underwater” house. I wonder how many breadwinners will be willing to go where the work is. I have friends that are unemployed, but I’m not sure if it is a good idea to move to ND.
It also looks like anyone with construction skills can probably go start their own construction business up there, for what, 8 months out of the year?
The WSJ reports what it calls “fowl” play.
But if the money is good enough, then the oil and gas firms will just settle for the sake of being able to continue business. And in the end a whole system of transfer payments will spring up that will rock along just fine until the oil runs out. Then you’ll have whole industries based on bird-grievance that will suddenly become unsustainable.
Word on the Interwebs is that the Saudis are bankrolling the opposition to the Middle America oil boom. If I were in their shoes, I would too. Not to mention passing out bribes to politicians by the shovel-full.
Now, what happens when the governors of the new oil producing states call out the National Guard to detain Federal EPA agents who are trying to shut down the oil fields? Fort Sumter II?
“I wonder if lots of people will move to ND?”
If you don’t mind brutal weather. My mom grew up on a farm there (unfortunately on the non-oil end of the state!) and had some very interesting stories about the winters.
Well the House has cut the appropriations for the NLRB so I won’t be surprised if the EPA doesn’t get its budget cut in the near future. Same for the Interior Department.
Leopard Lacewing butterfly.
I had one once. Put enough ketchup on it and it was ok.
A certain amount of environmental awareness is a good thing. The Watermelon agenda has very little to do with environmentalism and everything to do with politics and the expansion of statism (socialism).
Western civilization is an energy based society with a foundation of hydrocarbons. Control the hydrocarbons and you control Western civilization. Or at least that is the theory.
Any attempt to change that theory will be viewed by the establishment as a wild eyed maniac with a sledge hammer approaching their rice bowel. No POTUS has opened ANWAR, which would require nothing more then a presidential finding, because the Watermelons would go berserk. Right now we are posed on the brink of the second part of that double dip recession. So we will find out which the politicians fear more. A few thousand die hard Watermelons or 20 million unemployed?
Right now the choices for ending this depression ( I know, technically it’s a recession) are the traditional ‘hold a war and draft everybody’ or find something else.
Opening up America’s energy frontier is a possible alternative. If the Watermelons don’t like it, draft them. That will give them something real to worry about.
This was all predicted in this book by a American-Canadian energy consultant a few years ago:
http://www.amazon.com/Rise-New-Oil-Order-Technologies/dp/2970060248
I wonder if the Vampire Squid boys pla…er, quote heavily from it.
DRILL BABY, DRILL
Yes, we have more energy resources under our own control than any nation on Earth, but will the Democrats let us get it out of the ground?
In our backyard we want no nukes
We’ll give it though to Mamelukes
The oil we have we will not drill
But pay for drilling in Brazil
Refineries we’ll build no more
Unless it’s in a foreign shore
Our shale deposits hold more gas
Than all the world yet still we pass
Why do we do these things at all
Why do we keep ourselves in thrall
To sheikhs and self styled Arab kings
Why do we bow and kiss their rings
For surely those in power know
That we could let the Mideast go
And use our coal and oil and gas
To kick those bastards in the ass
We’re told the reason we don’t drill
‘Twould harm the lizards, ocean krill
The caribou would be upset
And that is why we have to get
Our oil from folks who want us dead
We’ve put the gun to our own head
There’s something up somebody’s sleeve
That is the answer I believe
We should have concern for the environment, especially the governmental environment. The main problem is that the regulatory beasts are growing exponentially because there are no predators in their ecosystem, just tax paying prey. All such systems eventually collapse. Math is a harsh mistress with not an ounce of mercy in her soul.
The only silver lining in the current economic cloud is that the camouflage has fallen and many people are seeing the lumpen-political class (the bureaucrats) for what they really are. In prosperous times it is easy to ignore them, and like the proverbial frog in the heating pot of water, we for the most part tune out their existence. But hard times tend to focus our attention.
And the twisted existence of the bureaucratic welfare state is dependent upon failure. Without clients it has no reason to exist. Widespread prosperity would mean its end. That is its mortal enemy. If evil cannot be found for the bureaucratic state to fight simply redefine evil. Make carbon dioxide the equivalent of arsenic. Rinse and repeat as needed for your growth and existence.
The slogans which justify its existence usually stay the same, but the definitions of the words which compose them are subject to constant mutation. “Poverty” used to mean not having sufficient food, shelter, or clothing for basic biological requirements. Somehow over time people who worked long hours for low wages that could barely keep their families fed morphed into people who have never worked a day in their lives and who complain about the fact that they can’t afford a high end pair of designer tennis shoes. These are the “poverty stricken” of our day.
But as the saying goes, the poor shall always be with us, especially if they’re defined as the bottom ten per cent in national income levels. And the bureaucrats, like STD’s, shall likewise be with us as well.
“It’s obscene to watch the EPA and its allies sabotage the American economy at a time like this.”
It would be nice to see them charged with Sabotage. Probably a stretch but it would be entertaining to see the head of the EPA on trial. Keep him out of trouble for a while. 72 hours in holding would help his attitude a lot.
“Although the public policy focus of the new oil boom has been environmental quality, it is perhaps the shadow boom in the sutlers of the army of petroleum that may prove to be its lasting legacy.”
My company is now one of those “sutlers” (love that line Wretchard). We are located where the Marcellus Shale overlaps the Utica Shale and there is a real sense of unreality to the whole thing…as in “Can this really be happening to us when the rest of the world looks to be going down for the economic count?” Interesting times to be a manufacturer in the Rust Belt for a change. The job growth is there, and anywhere the drilling occurs…not just North Dakota.
Global jihad, the terror return of Allah (the moon god? And if not, why the crescents on mosques?) like we haven’t seen since the aftermath of 622AD, nuclear weapons that might be used helter-skelter–all this has been funded by oil being in the Mideast and not under the Midwest.
So now there IS oil and gas back in the Midwest again, and so of course the Left will give itself a hernia trying to stop us utilizing our own resources–that’s why shady Mideastern honchos apparently funded Obama back in his college days–and who knows who else has been getting money to tote the moon god’s line?
Whew, what a knife’s edge world we live in…or should I say, scimitar edge? (Curious how that is another crescent image, isn’t it?)
An Préachán
IRT W@9:
STRATFOR had a dandy article the other day about how the US Presidential cycle is affected by world events and vice versa. Very timely with Obamacare and DOJ lawsuits against states in the news. Link: http://www.stratfor.com/weekly/20110919-obamas-dilemma-us-foreign-policy-and-electoral-realities?utm_source=freelist-f&utm_medium=email&utm_campaign=20110920&utm_term=gweekly&utm_content=readmore&elq=0cf85fac350543939a94bfbb68347c30
How could the Won deal with an embarrasment of riches here at home? Deny, Delay, and squander.
Back in 2008 I said that if we looked for oil and gas in the US we’d find it. Which is why it was important to some that we not look.
I live in a former steel center that still has “brown fields” where the old mills were that closed 35 years ago. These vacant lots have so may “clean-up” rules attached that no one could do anything with them. (Cuhayoga Falls it ain’t — but close!) The brown fields are now at the center of a 25 billion barrel oil and gas find. This land would be ideal for locating refineries and petrol-chemical plants that would make feedstock for other industries (car parts use plastic from petroleum and fertilizer is made from natural gas). The oil and gas development (which will require about 200 billion dollars in investment over 20 years) may create 10,000 jobs in this area but the downstream industries could employ many times that.
But these actions are likely to anger a Marxist English professor somewhere. Two years ago I would say that would be enough to stop it. But I think even many university professors would like to see their house double in value and maybe not have to pay more for health insurance because of budget cuts.
Also from NPR:
The American energy boom, Jaffe says, could endanger many green-energy initiatives that have gained popularity in recent years. But royalties and revenue from U.S. production of oil and natural gas, she adds, could be used to invest in improving green technology.
“We don’t have the commercial technology now,” she says, noting the recent bankruptcy of American solar companies like Solyndra.
“The point is you can’t force a technology that’s not commercial. Rather than subsidize things that are not going to be competitive, we need to actually use that money to do R&D to create technologies — the same way that the industries created these technologies to produce natural gas and it turned out so commercially successful.”
This is what I was saying back in 2008 when oil prices spiked. I’m pleased to see it repeated on NPR. If they are becoming reasonable their fund raising must be off.
The left was so focused for so long on destroying the economy that they forgot to make it work when they got a hold of it and just went on destroying it. The leftists in government have so much crap in the pipeline — with the pressure building — that I’m sure it will come exploding out after November 2012 no matter who wins.
s @ 13: Right now the choices for ending this depression ( I know, technically it’s a recession) are the traditional ‘hold a war and draft everybody’ or find something else. Opening up America’s energy frontier is a possible alternative. If the Watermelons don’t like it, draft them.
Put them on pedal-powered generators, or maybe rickshaws, the Obama Greenshirt Rickshaw Corps, employing surplus Americans for the next 49 years. Rest stations powerered by Solyndra, a joint venture by the California Department of Corrections and the Federal Bankruptcy Court.
But officially, this is not even a recession. A recession is two quarters of negative growth. So, say you have an economy bubbling along at 100, increasing 1% per quarter. Then suddenly it falls to 40 in one day, but after that it starts increasing slightly, say 1% per year. No recession! Just because you’re in a hole it will take 60 years to climb out of, doesn’t even count.
Fun with math! And this is what Obama is always going on about, how on his watch at least we haven’t fallen another 60%. Well, we could flatline to zero and he would still be bragging, “hey we lost less under me than under that Bush”. I don’t believe economics has yet found a way to have an economy drop below zero, but they’d better have teams of experts working on it.
Well it looks I have seen the future and it is Canadian. Last year I spent a long weekend in Palm Springs and noticed a lot of expensive cars with Alberta and British Columbia plates. The Real Estate firms all had large billboards saying, “Canadian spoken here.” I assume they speak it in French too. Instead of visiting Emirs and Saudi princes in Las Vegas, we will have party animal oil tycoons from Canada with names like Malcomb and Treavor, Angus and Jean Claude. The Loonie will be far more valuable than the Yankee dollar. At least the Canadians are a general polite and easy going bunch, as long as the don’t have a hockey stick in their hands. “You know I’m Canadian, ‘ay, and I’m really really rich.”
I’m still trying to get used to the idea of Lorain as the fashion capital of the world and trying to envision the Euclid Avenue International Film Festival.
Two thoughts:
1. ‘Green Energy’ is a blank canvas. Everybody imagines they see something where there is nothing. It may be viable/it may not. In an environment where the Grant Junkies and Subsidy Junkies dominate, we’ll never find out. Much as I hate the idea of using the tax code to influence the market, I could find room for a simple “If you develop it here, produce it here, and sell it here – your tax rate is zero, forever.” Energy independence is the lever that can move the world.
2. The Green Movement has a problem with progess metrics. Static analysts and central planners that they are, they can only define ‘progress’ as something that looks an awful lot like ‘regression.’ Progress, as normal people experience it, usually involves selecting the best alternative, which usually involves some pros and cons. ‘Perfect’ rarely comes into the picture.
“Perfect” in my mind is domestically produced, renewable hydrocarbons (it’s all about storage density). While we wait for that Nirvana, domestically produced hydrocarbons checks more than enough boxes to be considered “Best Alternative.”
Bonus points to any Belmont Club commenter who can discuss the following:
1. What is your favorite stop on the ‘Madison Walk’?
2. Would it be as much fun if Lakewood, OH became fashionable?
I once took United flight 1492 from LAX to Columbus, and survived to tell the tale.
THE CALAMITOUS CLOWN
Our president is an astonishing fool. Lula da Silva in Brazil is even more socialist than our president, but he had the good sense to allow drilling on a grand scale, as well as allowing for fairly sound business practices. Lula, being no fool, understood that the money for social programs had to come from somewhere. Another place that could teach Obama a lesson is Norway, which has no qualms about drilling deep and often. Norway can afford to be a social democracy as long as it has oil.
That region as the center of the universe? Well, let’s a give it a try. Maybe it could work.
In an interesting twist,the bad thing about these new oil fields is also the GREAT thing about these new fields, considering our current situation!
In some of the great old fields of the past, the Saudi fields, the late great East Texas Oil Field (around Kilgore), the wells at first came in at rates approaching 20,000 barrels per day – incredible! That meant you could get millions of barrels a day out of only a few hundred wells, they were fantastically productive.
Now the Bakken, and the Utica, and the Eagleford aren’t like that. Much, much lower production rates than that, and it will take many years to drill. The Bakken alone probably requires at least 30,000 new wells to tap it completely. So it’s tough work to get it.
But you know what that means? JOBS, JOBS, JOBS!!!! All we’ve got to do is allow the drillers to go in there and here the jobs come! We’ve still only got about 1900 total rigs working in the US this week. We should have 5 times that many going!
And of course some will say “well, we just don’t have anywhere near that many here.” BUILD THEM! That would mean even more…. JOBS!!!
Good grief, this isn’t the complete solution, but it’s a big part of it – and the opportunity is just sitting there, waiting for someone to let it happen!!!
“I’m still trying to get used to the idea of Lorain as the fashion capital of the world and trying to envision the Euclid Avenue International Film Festival.”
Actually, wretchard, this part of the country has lots of stuff left over from the last boom (which oil was a part of — Standard Oil started in Cleveland). Mostly, this stuff was built of granite — museums, auditoriums and stuff. Bit of paint and we can pick up where we left off in 1958 (the 1957 Chevy representing “peak culture”).
an interesting thought problem in search of funding.
………………………..
http://www.physorg.com/news/2011-09-theory-key.html
Prediction or cause? Information theory may hold the key
September 30, 2011 by Miranda Marquit feature
(PhysOrg.com) — “A perplexing philosophical issue in science is the question of anticipation, or prediction, versus causality,” Shawn Pethel tells PhysOrg.com. “Can you tell the difference between something predicting an event and something actually causing an event?”
Good grief, this isn’t the complete solution, but it’s a big part of it – and the opportunity is just sitting there, waiting for someone to let it happen!!!
Unlike the magical thinking cargo cult notions of the Democrats with their giant stimulus bribery schemes, what is required to get the economy not just started, but booming again, is so very simple. Between drilling, rollback of regulations, clamping down on the rogue agencies like EPA and Energy, and scrapping Obamacare, we are likely to see a surge of business growth and hiring.
There will always be a limiting resource to war over. Solve the energy “problem”, and the new excuse for murder will be metals, or anything else that makes men feel they’d be God if they had it.
Snafu as China space launch set to US patriotic song
September 30, 2011
http://www.physorg.com/news/2011-09-snafu-china-space-patriotic-song.html
It was supposed to be a patriotic tribute to China’s technological prowess. Instead, a video showing the launch of China’s first space station module inadvertently glorified the country’s biggest rival.
A video animation put together by state television to mark the highly publicised launch of Tiangong-1 — or “Heavenly Palace” — is set to the music of “America the Beautiful”, a patriotic song about the United States.
China sees its ambitious space programme as a symbol of its global stature and Internet users who recognised the tune were surprised at the choice of music for the space launch — a proud moment for the Asian nation.
“At the time, I was eating in a hotel with foreigners from an American company and Chinese clients and we were watching the live broadcast,” posted one user on Sina’s Weibo, China’s answer to Twitter.
“All the Chinese there wanted to disappear,” he said of the embarrassed response.
It was unclear whether the choice of song — which includes the line “America! America! God shed His grace on thee” — was a mistake.
The video, which is more than a minute long and can be accessed on broadcaster CCTV’s English-language website, features only the music from the song and not the lyrics (http://newscontent … ileId=117772).
CCTV employees reached by telephone passed AFP from department to department, without providing any comment.
It is not the first time CCTV has embarrassed its paymasters.
In January this year, Internet users spotted that footage in a report on an air force training exercise in a national newscast was taken from the Hollywood blockbuster “Top Gun”, about an elite American training academy.
The successful launch of Tiangong-1, which took off late Thursday from the Gobi desert in China’s northwest, marks the country’s first step towards building its own space station.
“It would be nice to see them charged with Sabotage.”
No Stoicheion. ‘Wreaking’…that’s the proper charge.
Robert@3: We have met the enemy, and it is the EPA.
For the record, ESA (Endangered Species Act) is administered through USF&W, usually at the state level, (and NOAA), while clean air, water and land regulations (CERCLA, RCRA, and Clean Water/Air Acts) are administered through EPA, usually at the state level. The latter seem intuitively more defensible than the ecosystem/ habitat preservation objectives written into the ESA as amended.
The next generation of oil extraction technologies will – I expect – have more resource impact than ecosystem impact – open ponds, heavy metals, particulates, spills and leaks, and waste disposal (not to mention blowouts.)
Anybody know how much it costs to extract North Dakota oil?
I am wondering how long production will last if the price of oil keeps crashing. It was down to $80/barrel the other day.
#2 Teresita – Your comment sounds like snark but it’s not. We’ve barely got started on concept design work for SPS power transmission, and the watermelons are objecting to the microwave flux and saying it might damage aircraft and burn animals flying through the beam. Greens very rarely know any maths or science. (The power density for an SPS power beam will be TINY.)
First, major props to Walt/15. You’ve never been better. Thanks.
Now, to the point. W says “everybody is going to want a piece of the action.” Bingo. Even if we weren’t in the middle of a depression, the allure of jobs and revenue into local markets and the taxes therefrom would produce a remarkable recalibration of opinions among the “concerned.” It’s like an alteration in the invisible field, magnetism or gravity, in which everything moves. There will still be the whackos insisting on the Leopard Lacewing’s priority, foregone income be damned. But most of the pols know where their real interests lie. And this is not like Old Big Oil where the US job presence was geographically constrained (California once, NJ and PA likewise; but in recent history TX and the Gulf and AK mostly) and declining. This is rigs popping up everywhere. The scale is different –not just the apparent magnitude of proven or possible reserves but the number of wells that will be drilled, each a modest producer. As noted by wws/30, this means jobs, jobs and jobs.
And in today’s economy, that is the only thing that matters. The ecoloons may rant as they please, but they are going to lose. By the way, either the EPA wants to commit seppuku or it hopes to be checked by Congress, because in its respondent’s brief in a recent challenge to its CO2 permit rules, it said that it will have to hire 230,000 workers at a cost of $21BN to process the 400x increase in permits (from 16K to 6 Million) required by 2014. That is like wearing a big sign saying “Somebody stop me.”
Pass the popcorn; and let’s go drill.
feeb@38
A few years back I read they still make money at $40 a barrel. I suspect that if prices fell that far and stayed there development would trail off. Of course that price would knock out “alternative energy” but probably jump start the world economy. I suggested in 2010 the Republicans run on $60 a barrel oil because that seemed quite doable to me with sensible policies. They must have missed my comment (it was in June of that year, I believe) because they didn’t do it.
Well, the Texas Aggies have come up with a new method of converting low grade Texas coal to liquid hydrocarbon fuels. They say they are already at around the $30/barrell level and they are not done developing the process yet.
And one company says they can already turn plant feedstocks into aviation fuel that will run into today’s aircraft at a price cheaper than what we pay today.
But no – the Fed Govt is not trying to pump more hydrocarbons but is pumping another $600M of taxpayer funds into a solar plant in Californica.
Would like to make two points:
1) As WWS says, this type of exploration is highly labor intensive. In spite of all of this, I can’t remember even once where President Obama has mentioned this industry in a positive way for what it has done to lower energy costs and to employ so many people. It’s not like he has a long list of industries that are doing a great job of generating new jobs these days; you would think that he might mention it by accident.
2) There are a lot of previously poor farmers and ranchers in S. Texas and N. Louisiana who are collecting some really nice royalty checks. I suspect that the mineral rights owners in Ohio and Pennsylvania won’t be very happy if the EPA gets in the way of them and their royalty checks.
38. feeblemind
The talk is that Bakken wells pay back cash on cash within 9 to 11 months.
Similar talk for Ohio and Pennsylvania is 10 to 12 months.
Anything after that is profit.
Big Oil is pretty much sidelined because the minute they buy out any of these smaller firms — the oil depletion allowance is zeroed out! So it’s like swallowing a porcupine.
More important that the raw stats — it’s the QUALITY of the oil: it’s tip top!
I had to chuckle at the video. The minute the weather broke construction of gas & oil pipelines began. So the number of crude-hauling big rigs is most unlikely to savagely increase. They’ll simply go to where the newest strikes are coming in… and the roads become quiet over night.
42. RWE – “Well, the Texas Aggies have come up with a new method of converting low grade Texas coal to liquid hydrocarbon fuels. They say they are already at around the $30/barrell level and they are not done developing the process yet.
Current methods of Coal to Liquids used by Sasol and Shell Oil can crack anything down to very lowest grade bituminous coal. Don’t think they do peat yet, but it is not impossible to do. Locals up here say the break even is around $40/bbl. Sounds like the AGs have knocked a notch off of that number – which is a Good Thing.
As I understand the process, each reactor is designed for a discrete class of input / feedstock. Those classes can range all the way from hard anthracite to biomass. You can not mix classes of stuff input – ie) can’t do both biomass and lignite at the same time. Once you get it cracked and the long hydrocarbon built, you can output any shorter hydrocarbon as product.
The thing of it is that once all the new production hits the market, there will be a crash in the price per barrel / MCF that will change literally everything. We probably won’t see the 19 cent / gallon of gasoline I saw in central MO in the late 1960s during the occasional gas war. But I wouldn’t be a bit surprised to see it well below Bachmann’s $2/gal for gasoline. Cheers -
Great news–the sooner we disentangle from the ME the better–apart from the $3 billion in F16s we are selling to Iraq and the $60 billion of American defense products we are selling to KSA.
Those deals create jobs and wealth for American families–end all handouts to the ME–the main focus now is the American economy.
wws: Actually the East Texas wells came in at over 100,000 barrels per day(b/d), the SA wells in some cases 200-300,000+ b/d, the largest well I saw tested was an Oxy well in Libya greater than 100,000 b/d, biggest well I personally tested was 50,000+ b/d. Re the Utica Shale, tested and produced in parts of New York State, Quebec and in Nova Scotia. Likely more prevalent on the Canadian side. Note: in the US the shale plays are nearly all on private lands, doe the government refusing to allow exploitation of thes private resources constitute a taking? Just curious.
Cuyahoga Falls is a bedroom community in Akron. Cuyahoga Heights is the home of the steel mills. It’s been a tough 40 years, but the area can come screaming back. We still know how to make things here. Youngstown is starting a new tube mill, think pipeline, financed by the Russians. All of the reasons this area was the manufacturing center for the majority of the 20th century are still valid. Plus the cultural institutions are world class. Life is full of circles.
A frog is a red green creature that croaks to mate so you cannot sleep. A toad is a type of frog that clogs the great economic blender of Capitalism. Merkel danced to the toads mating jig when she panicked and ordered the closing of Germany’s nuclear power plants. That victory for the toads and their paymasters in Russia China and OPECia (RCO) may have been modern Europe’s Manzikert. It empowered the enemies of the West to press on. They will try kill nuclear power everywhere but RCO, including France MC, and will try to throttle the shale baby in its crib.
I live right in the middle of a Marcellus Shale gas producing region. It is amazing, and depressing, to see how rapidly the environmental whackos find useful idiots to promote their ideas. Apparently, is is incredibly easy to convince plenty of regular Americans of whatever exaggerated claims and pseudo-science the watermelons are promoting.
The local media is in on the act. Stories abound that implicate Marcellus Shale drilling in any environmental or community problem whatever.
A train leaks chemicals and it is reported as “they could be used in Marcellus Shale drilling.” No evidence of that, but it doesn’t matter.
A oversized truck neglects to exit the interstate and hits a bridge: It was carrying equipment for Marcellus Shale!!
A creek has a big fish kill. Marcellus Shale! No evidence at all that any gas driller was ever near the place. And the EPA, of all things, later implicated coal mine runoff in the kill. Doesn’t matter.
A man from Texas murders a local man. He was here for Marcellus Shale!!
Marcellus Shale will cause cancer and poison our children! I see the signs everywhere: Fracking Poisons Our Water and Children.
Everytime I see one of these things I want to post my own sign: Let’s All Freeze in the Dark!
Who are the people who fall for this tripe? Do they have any idea how our prosperity came into being? I suspect that many of them get a check in the mail, written on Other People’s Money. Life is comfortable for them. This way of life magically sprang into existence and can continue indefinately with no more actual productivity. Seeing this sort of manufactured controversy erupt in an area already economically depressed by the decline of the steel industry, and in the face of an economic depression does not give me optimism about the ability of our country to pull ourselves out of our economic hole.
elby/50: partience, patience. it will take a while to overcome the embedded and instinctive Marxist response. But sooner or later your neighborhood wlll give up the eyewash about Planet Rescue and start to focus on who is putting bread on the table for the kids. It will be under the radar but all the more effective for that.
As htey say, trust in God. And keep your ammunition dry. The next 24 months are extraordinarily important…
I think they say: Trust in god and keep your powder dry.
Of course, wet ammo is not good for barrels, but chrome-plated barrels might be OK.
oMan,
Most people locally that could, already have sold their rights. Most people support drilling. But the agitation against it has simply grown and grown. This is par for the course for marxist agit-prop. They usually win, in some form or another. They never stop, and they are relentless. If they can’t ban it outright, they will do their best to hobble it. They most emphatically do not need a majority to do this. They never have and never will.
Many townships are voting to ban drilling, and many others are restricting it. The other side will never give up. They don’t know the meaning of defeat. A good analogy is gay marriage, which despite being rejected everywhere voters have been asked, is still being pushed and promoted by the agitators. With success. They will change our culture, over our objections, whether it is good for us or not.
The same goes for everything else: our manufacturing economy, our energy industry, you name it. And there are legions of people too stupid to realize that the end result of this is to freeze in the dark.
50 – 53 remind me of the comment from some Euro journal, previously repeated here: It’s not Obama that really worries me. Obama will pass. It’s the people who were so foolish as to elect him. They will still be with us.
@8 “That is hard to pull off when your family is living in an “underwater” house. I wonder how many breadwinners will be willing to go where the work is. I have friends that are unemployed, but I’m not sure if it is a good idea to move to ND.”
Ask the Okies. It worked, sorta, for them. North Dakota or bust.
Wall St. Journal
THE WEEKEND INTERVIEW
OCTOBER 1, 2011
http://online.wsj.com/article/SB10001424052970204226204576602524023932438.html?mod=WSJ_Opinion_LEADTop
How North Dakota Became Saudi Arabia
Harold Hamm, discoverer of the Bakken fields of the northern Great Plains, on America’s oil future and why OPEC’s days are numbered.
By STEPHEN MOORE
Harold Hamm, the Oklahoma-based founder and CEO of Continental Resources, the 14th-largest oil company in America, is a man who thinks big. He came to Washington last month to spread a needed message of economic optimism: With the right set of national energy policies, the United States could be “completely energy independent by the end of the decade. We can be the Saudi Arabia of oil and natural gas in the 21st century.”
You’d expect an oilman to make the “drill, baby, drill” pitch. But since 2005 America truly has been in the midst of a revolution in oil and natural gas, which is the nation’s fastest-growing manufacturing sector. No one is more responsible for that resurgence than Mr. Hamm. He was the original discoverer of the gigantic and prolific Bakken oil fields of Montana and North Dakota that have already helped move the U.S. into third place among world oil producers.
How much oil does Bakken have? The official estimate of the U.S. Geological Survey a few years ago was between four and five billion barrels. Mr. Hamm disagrees: “No way. We estimate that the entire field, fully developed, in Bakken is 24 billion barrels.”
If he’s right, that’ll double America’s proven oil reserves. “Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska,” he continues.According to Department of Energy data, North Dakota is on pace to surpass California in oil production in the next few years. Mr. Hamm explains over lunch in Washington, D.C., that the more his company drills, the more oil it finds. Continental Resources has seen its “proved reserves” of oil and natural gas (mostly in North Dakota) skyrocket to 421 million barrels this summer from 118 million barrels in 2006.
“We expect our reserves and production to triple over the next five years.” And for those who think this oil find is only making Mr. Hamm rich, he notes that today in America “there are 10 million royalty owners across the country” who receive payments for the oil drilled on their land. “The wealth is being widely shared.”
One reason for the renaissance has been OPEC’s erosion of market power. “For nearly 50 years in this country nobody looked for oil here and drilling was in steady decline. Every time the domestic industry picked itself up, the Saudis would open the taps and drown us with cheap oil,” he recalls. “They had unlimited production capacity, and company after company would go bust.”
Today OPEC’s market share is falling and no longer dictates the world price. This is huge, Mr. Hamm says. “Finally we have an opportunity to go out and explore for oil and drill without fear of price collapse.” When OPEC was at its peak in the 1990s, the U.S. imported about two-thirds of its oil. Now we import less than half of it, and about 40% of what we do import comes from Mexico and Canada. That’s why Mr. Hamm thinks North America can achieve oil independence.
The other reason for America’s abundant supply of oil and natural gas has been the development of new drilling techniques. “Horizontal drilling” allows rigs to reach two miles into the ground and then spread horizontally by thousands of feet. Mr. Hamm was one of the pioneers of this method in the 1990s, and it has done for the oil industry what hydraulic fracturing has done for natural gas drilling in places like the Marcellus Shale in the Northeast. Both innovations have unlocked decades worth of new sources of domestic fossil fuels that previously couldn’t be extracted at affordable cost.
His only beef these days is with Washington. Mr. Hamm was invited to the White House for a “giving summit” with wealthy Americans who have pledged to donate at least half their wealth to charity. (He’s given tens of millions of dollars already to schools like Oklahoma State and for diabetes research.) “Bill Gates, Warren Buffett, they were all there,” he recalls.
When it was Mr. Hamm’s turn to talk briefly with President Obama, “I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this.”
The president’s reaction? “He turned to me and said, ‘Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’” Mr. Hamm holds his head in his hands and says, “Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing.”
I have one son in ND and one who just left to the west coast. Both in oil. I have a coworker who’s brother just left for ND/Montana. People are moving. It is much easier to move today than back in the early twentieth century. With internet connectivity my children are less than a click or two away at anytime. I can shoot off an email or text almost instantly and don’t have to lick a stamp to boot!
The need for construction workers is enormous up there and the wages are pretty good for the skill levels needed to work. You do have to be a worker though. No union slackjaw is going to make the grade. Strong back and a good work ethic and you can raise a family in the black hills. Go Northwest young man.
Jim
Teh One will play it thusly: He will publicly oppose any development through his unelected apparatchiks in the EPA and Interior, not to mention the courts and 90% of the media academic complex, along with as much Marxist agitprop as he can afford with both our money and the stuff he has printed. He will say something to the effect of “after awhile, you’ve frakked enough oil” and “Exxon acted stupidly”. Michelle will be proud for the second time. On the back side, he will also have a campaign ad claiming credit for the discovery on his watch. Joe Biden will say that oil and gas development might be one of the administration’s greatest accomplishments, right up there with the Iraq War.
The sad part is, rubes will believe it.
Wretchard,
Oil produced in the US won’t be bankrupting the Saudis any time soon. Oil pumped out of Saudi Arabia costs around $10/barrel to deliver. Oil in North Dakota more like $60.
If the oil price falls, US production ends, not Saudi.
Of course, the way Muslim tribal societies work, ever higher prices and revenue are required to keep the societies functioning. By capping the price of oil around $80, US/Canadian production will eventually kill off the power of the mid-east, but it will take a while. Russia as well.
James…
The Saudit royals are riding a tiger… as the Duck of Death could tell ya…
Their population rides compound exponentials: a ramping population x a ramping per capita expectation.
This happened before: and the Saudis actually had to draw down their cash holdings for a time.
Beyond that, KSA has entirely lost swing producer status within the light, sweet crude oil market.
Ramping her sour, heavy grades is what’s in store — but in them she faces monopsony power great enough to frustrate the King. Hence, he backed off production ( of said grades ) by 1,000,000 bbl per day.
It was America to the rescue: the Wan used our SPR to bail out Ireland, Spain, France and Italy when the Duck of Death lost his cool.
And even beyond that: Iraq is destined to eclipse Saudi Arabia — in a generation. And with water flood — Iraq is destined to extract higher fractions from her gross deposits.
Ultimately it is better to be a food export powerhouse than on oil and islam exporting powerhouse.
A Cain presidency would soon see the end of the islamist threat; most of which would decay under executive orders.
It’s our wallet that enables islamism. They are not making a go of it on their own.
I think that the Obamites’ antipathy to fossil fuels arises not so much from the supposedly harmful environmental effects of their extraction and use, but from the identities of those who stand to benefit the most from their utilization.
The “alternative energy” field has been developed only recently, and has received a substantial part of its seed money from government. Its “owners” consist in large part of those who are skilled at extracting money from government using ideological persuasion. One part of that ideological persuasion has been the willingness to cede to government a role as a stakeholding partner, giving government leaders a power and control over the field (and its fruits) not normally found in the business world.
In contrast, the infrastructure (and the capital) of the fossil-fuel industry were established long ago. The industry depends more on market forces than on government largesse and enthusiasm, and is thus less amenable to becoming a People’s Industry, with all of the ideological control and opportunity for rentseeking that that entails.
To those such as Obama, the vast wealth that will necessarily flow through the dominant energy-providing industry must flow at some point through a governmental spigot. Government must have ultimate control over the industry, because government’s proper role lies not in refereeing society, but in controlling society.
Our national productive capacity is going to be determined in large part through the availability of energy. When that energy is provided by the existing non-governmental oil industry, there is a vast flow of wealth which never passes through The People’s Government’s hands; it can regulate, but it cannot control and keep and distribute the wealth or the power resulting from that wealth. This allows the future path of society to be determined without consultation with and approval by the government. This is anathema to those who yearn for government to rule rather than serve.
The alternative energy field, in contrast, has willingly sought government as co-owner and protector and partner. Should alternative forms of energy become the dominant sources powering our nation’s production, those resulting vast flows of wealth will be the property of those in charge of government. Only then, with its hand on the spigot of the wealth of the nation, can government assume its proper role over us.
I don’t think it’s about dead birds at all.
Europe’s Shale-Gas Boom
There is a multiplier effect as access to cheap fuel ripples across the economy.
http://online.wsj.com/article/SB10001424052970204226204576600391808333026.html
SEPTEMBER 30, 2011
By ALAN RILEY
Cuadrilla Resources announced last week that it has over five trillion cubic meters of gas in place in its British exploratory license area in Lancashire. So far the story of shale gas in the European Union has been focused on the French shale-gas ban, German moratoriums and dozens of largely dubious environmental claims. With Cuadrilla’s announcement, shale gas goes from something ignored by policy elites on the grounds that it can only be developed in America, to something that is happening in real time in Europe.
Cuadrilla’s rather conservative estimates of the recoverable resources in its Lancashire license area should not mislead observers into thinking that the discovery will not have a major impact on the British economy. One trillion cubic meters is approximately 15 years of total U.K. gas supply, or 40 years of liquefied natural gas imports. In addition, the ability of shale-gas producers to lower the costs of production as operations get underway means that Britain will have access to significant sources of cheap gas just next door to its industrial base.
One of the overlooked consequences of the U.S. shale-gas revolution has been the multiplier impact that access to large quantities of cheap gas can have on the broader U.S. economy. Shale gas could lead to a revival of the American steel and chemicals industry, and of energy-intensive manufacturing. It may also push food prices lower, since natural gas provides 80% of the constituent of most modern fertilizer.
The British government has been desperately searching for sources of economic growth. Cheaper, domestically produced gas from Cuadrilla will create genuine competition among energy producers, pushing U.K. gas prices lower.
There is a multiplier effect as access to cheap gas ripples across the economy.
But the true tipping point kicks in when other European governments begin to realize that the U.K. is building a major competitive advantage for itself. Access to cheap gas close to its industrial base could pull international investment into Britain. Cheap energy prices, plus the size of the British market combined with easy access to the Continental market, may even tempt British manufacturers to bring offshored production back home.
In an age of austerity, cheap gas—domestically produced and available in large quantities—could be a major tool for restoring European prosperity. It allows EU member states to directly tackle their alarming growth of fuel poverty while providing a new means to help rebuild competitiveness. That is an investment no country in Europe can afford not to make.
The Green River Formation in Utah dwarfs that of North Dakota. It has more oil than Kuwait and Saudi Arabia combined.
http://en.wikipedia.org/wiki/Green_River_Formation
“The Green River Formation contains the largest oil shale deposits in the world.”
Seems like a few years ago, Peak Oil was going to be the end of Civilization. Along with CO2.
Just like a few years before that Y2k would be the end of Civilization.
And before that the Japanese were going to buy us all out.
And before that nasty lyrics would do all that, too.
Yawn.
The first big question the shale gas drillers need to answer is, where will they get the fresh water required to do this? Each well requires over 3 million gallons of fresh water. Anyone reading his have drought conditions where they live?
Then, there is this study finding a correlation between high methane levels in drinking water and proximity to fracking wells:
http://www.nicholas.duke.edu/hydrofracking/methane-levels-17-times-higher-in-water-wells-near-hydrofracking-sites
Finally, Small Town America is becoming important. The conservative town of Dish, TX has experienced air and water contamination from fracking. If fracking is coming to your town, as the people of Dish learned, don’t be too quick to dismiss environmentalists. You might have to become one yourself.
http://www.water-contamination-from-shale.com/texas/hydraulic-fracturing-in-texas/