As the United States becomes a net oil exporter for the first time in 75 years, the US Department of the Interior has announced the discovery of the largest continuous oil and gas field ever found. Situated in the Wolfcamp Shale and overlying Bone Spring Formation in Texas and the Permian Basin in New Mexico, the new resource is estimated to contain 46.3 billion barrels of oil, 281 trillion cu ft of natural gas, and 20 billion barrels of natural gas liquids worth trillions of dollars.
Agency Confirms: Obama Has Blocked Oil Production
Empty Boast: As we have noted before in our Issues & Insights pages, President Obama has taken credit for an energy boom he had nothing to do with. A government agency now confirms what many have known to be true.
The Congressional Research Service has released a report, “U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas,” that corroborates what we’ve said.
“All of the increase (in oil and natural gas production) from FY2007 to FY2012 took place on non-federal lands, and the federal share of total U.S. crude oil production fell by about seven percentage points,” writes Marc Humphries, the government specialist in energy policy who authored the report.
During this period, oil production on federal land fell from nearly 1.7 million barrels a day to 1.6 million. At the same time, the share of overall production on federal lands shriveled from 33% to 26%.
The difference is found in offshore production. Onshore production actually increased modestly from 2007 to 2012, but offshore dropped from 1.4 million barrels a day to 1.3 million.
The story is similar with gas. Production on federal land decreased from 5.5 trillion cubic feet to 3.7 trillion cubic feet. The federal share collapsed from 27.8% to 15.5% of the total. In the case of gas, both onshore and offshore output on federal land have fallen, with offshore tumbling 50%. Continue Reading
With the shale gas boom in full swing, gas prices are at 10-year lows. We have the realistic prospect of abundant domestic supplies of a clean-burning fuel for the foreseeable future, who doesn’t like natural gas?
Ask the Sierra Club. This week, the venerable environmental organization announced its “Beyond Natural Gas” initiative, to go along with their “Beyond Coal” and “Beyond Oil” campaigns. Of course, they hate nuclear energy too.
“Fossil fuels have no part in America’s energy future – coal, oil, and natural gas are literally poisoning us. The emergence of natural gas as a significant part of our energy mix is particularly frightening because it dangerously postpones investment in clean energy at a time when we should be doubling down on wind, solar and energy efficiency.”
—Robin Mann, Sierra Club President
The Sierra Club has over a half-million members (down from 600,000) and an annual budget of $100 million. They are arguably the most influential environmental lobby in the country. People take them seriously, and politicians listen.
With their opposition to fossil fuels and nukes, the Sierra Club takes 91% of our current energy sources off the table (see EIA chart at the end of the post). And most of the remaining 9% they’re not too crazy about.
Youthful naiveté has an endearing quality. If their proposal were merely impractical, it would be naive. The Sierra Club is not naive. Their plan is physically and economically impossible. They have a willfully foolish, craven and destructive agenda. They are not looking for solutions. They wish an end to our industrialized civilization. They wish us to return to mud huts. There are responsible environmental organizations. It should be an embarrassment that anyone should give the Sierra Club a nickel.
The Sierra Club’s ultimate goal, not surprisingly, is to save the planet from Global Warming. To that end, they wish to curtail 90% of carbon dioxide emissions by 2050 – thirty-eight years from now.
How will they do it? In Robin Mann’s words: “[W]e should be doubling down on wind, solar and energy efficiency.”
Point #1: Everyone is for energy efficiency, and it happens naturally due to economics and technical advances. But “energy efficiency” is a strategy to use existing fuels more efficiently, not replace them. That means the only technologies on the table are wind and solar. So that leads to …
Point #2: This is not “doubling down”, it’s going “all in“. All in on a sucker’s bet. That’s because wind and solar would have to grow by a factor of 50 times their contribution in 2011. Not “grow by 50%” — 50 times. Even if we suddenly developed the will to do it, there’s not enough money/resources in the known universe to make it possible. And if we did it, what about the Chinese and the rest of the world? And what would be the environmental consequences of making the conversion?
See that little pink bar, way on the right? The Sierra Club loves that. Everything else; not so much. Not at all, in fact. And it’s even worse than that chart makes it appear — this is a graph of domestic sources. In addition to the 78 quads depicted here, we import another 20. And Geothermal has limited growth potential. So that little pink bar needs to grow from a value of 2, to 100.
Or more than 100, because the population is going to grow by 2050. And since wind and solar are not primary transportation sources, we’d need to generate even more to account for efficiency losses.
This radicalism can be understood in the context of a recent reorganization:
Carl Pope, who has led the Sierra Club for much of the last two decades, is planning to leave the organization next year as it struggles to redefine its mission in a tough economy, the organization said Friday. … Mr. Pope, 66, stepped down as executive director last year after 17 years, turning the job over to Michael Brune, 40, who came to the Sierra Club from the Rainforest Action Network and Greenpeace, younger and politically more aggressive groups. Mr. Pope has held the title of chairman since Mr. Brune arrived and will remain a consultant to the club until the end of next year.
Has the Sierra Club jumped the shark? That happened long ago. My friend, with this natural gas pronouncement, the Sierra Club gave the shark a lap dance. And had its love child.
The Wall Street Journal reminds us that not long ago, the Sierra Club and natural gas were BFFs (to the tune of $26 million from Chesapeake Energy, never a shrinking violet when it comes to advancing its own interests):
“The political irony is that not too long ago the Sierra Club and other greens portrayed natural gas as the good fossil fuel. The Sierra Club liked natural gas so much (and vice versa) that from 2007-2010 the group received $26 million in donations from Chesapeake Energy and others in the gas industry, according to an analysis by the Washington Post. Some of that money was for the Beyond Coal campaign. …”
But now that the hydraulic fracturing and shale revolution has sent [wellhead] gas prices down to $2.50 [from $8 or more per million BTU in 2008], the lobby fears natural gas will come to dominate U.S. energy production. At that price, the Sierra Club’s Valhalla of wind, solar and biofuel power may never be competitive. So the green left has decided it must do everything it can to reduce the supply of gas and keep its price as high as possible.
No doubt, most of us have probably seen or at least heard of the demonstration of EPA civility. If you have, it bears another look. If you haven’t, this article is a good synopsis of events. As you read and watch, just imagine if this were the Bush adminstration and Inhofe was maybe, Chuckie Schumer. Imagine the theatre, the spectacle, the wailing and nashing of teeth by every news outlet in the land. We all assume this administrator was speaking metaphorically, but with bunch, who knows.
From Craig Bannister at CNS News:
Sen. James Inhofe (R-OK) took to the Senate floor today to draw attention to a video of a top EPA official saying the EPA’s “philosophy” is to “crucify” and “make examples” of oil and gas companies – just as the Romans crucified random citizens in areas they conquered to ensure obedience.
Inhofe quoted a little-watched video from 2010 of Environmental Protection Agency (EPA) official, Region VI Administrator Al Armendariz, admitting that EPA’s “general philosophy” is to “crucify” and “make examples” of oil and gas companies.
In the video, Administrator Armendariz says:
“I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting, but I’ll go ahead and tell you what I said:
“It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean. They’d go in to a little Turkish town somewhere, they’d find the first five guys they saw and they’d crucify them.
“Then, you know, that town was really easy to manage for the next few years.”
“It’s a deterrent factor,” Armendariz said, explaining that the EPA is following the Romans’ philosophy for subjugating conquered villages.
Soon after Armendariz touted the EPA’s “philosophy,” the EPA began smear campaigns against natural gas producers, Inhofe’s office noted in advance of today’s Senate speech:
“Not long after Administrator Armendariz made these comments in 2010, EPA targeted US natural gas producers in Pennsylvania, Texas and Wyoming.
“In all three of these cases, EPA initially made headline-grabbing statements either
insinuating or proclaiming outright that the use of hydraulic fracturing by American energy producers was the cause of water contamination, but in each case their comments were premature at best – and despite their most valiant efforts, they have been unable to find any sound scientific evidence to make this link.”
In his Senate speech, Sen. Inhofe said the video provides Americans with “a glimpse of the Obama administration’s true agenda.”
That agenda, Inhofe said, is to “incite fear” in the public with unsubstantiated claims and “intimidate” oil and gas companies with threats of unjustified fines and penalties – then, quietly backtrack once the public’s perception has been firmly jaded against oil and natural gas.
By: The Common Constitutionalist
Remember this from 2008?
Obama told us what he intended. Did we not hear him when he said he was ideologically opposed to coal? If we heard him, did we not believe him? Did we not believe he would actually find a way to shut down the coal industry? If we believed him, did we think we could stop him?
Well, it’s taken a few years but it is evident that he and his EPA are well on their way to fulfilling that 2008 promise. If unchecked, the EPA will successfully shut down many coal plants across this country, and yes, your electricity rates will necessarily skyrocket.
He was also quite clear about his intentions for “clean energy” generation. How has that worked out? Was no one listening to his words, knowing one at all?
Obama has stated on many occasions, he is in favor of the “all of the above” energy policy. This obviously is a crock. It is clear, at least to me, that he and his entire administration are anti-hydrocarbon.
The Washington Post reports that “the new proposed EPA rules will require any new power plant to emit no more than 1000 pounds of carbon dioxide per megawatt of electricity produced. The average US natural gas plant which emits 800 to 850 pounds of CO2 per megawatt, meets the current standard; coal plants however emit an average of 1768 pounds of carbon dioxide per megawatt.”
So, you say, at least we have the natural gas option. We’ve all heard there is more than enough natural gas in this country to power us for decades, if not centuries to come. Unfortunately the EPA has also begun blocking the use of hydraulic fracturing or fracking to get to the natural gas. And how long will it be before the EPA adjusts its standards to disallow natural gas plants?
So we have an administration that has begun to shut down the coal plants, won’t allow new ones to be built, won’t allow drilling for oil anywhere, and will not allow fracturing for production of natural gas. And please don’t buy the line of bull Obama is trying to sell, that domestic oil production is up. He is right that production is up from recent levels, but not due to any of his or his administration’s efforts. The oil production that has increased has all been on private land and has nothing to do with him. At present he has no authority to halt that drilling but his EPA has begun trying to slow the production of oil on these private lands. Congratulations!
I guess we all should stock up on walking shoes and candles.
But hey, at least we’ll have a clean planet, because as we all know, the science of global warming is settled. It’s been proven, apparently, that man-caused CO2 emissions are causing global warming.
Wouldn’t it be weird, if some team of scientists discovered that man-made CO2 emissions don’t cause global warming?
Six House Dems Would Confiscate Oil Company Profits
by Steve Maley
Six House Democrats, led by Rep. Dennis Kucinich (D’OH), have filed a bill aimed at controlling gasoline prices. Styled the “Gas Price Spike Act”, H.R. 3784 would establish a “Reasonable Profits Board” which would have the power to confiscate 100% of oil company profits above a level that they deem to be “reasonable”.
I know: “You had me at ‘Kucinich’.”
Kucinich is either a naive fool, a craven panderer to his electorate, or a throwback to Soviet-style central planning. That he could find five other elected nitwits (Reps. Woolsey, Langevin, Conyers, Fudge and Filyers) to put their names on such an anti-capitalist, unconstitutional fantasy is an indication that the Far Left Wing of the Democratic Party has left the ranch.
Consider, too, what it says about “Republican” presidential candidate Rep. Ron Paul (R-TX), who recently declared that he would consider Kucinich for a cabinet post in a Paul Administration.
Paul said his libertarian political philosophy helps him connect with some on the far left — including Kucinich, who shares Paul’s general anti-war stance.
The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and [natural] gas that ranges from 50 percent to 100 percent on all surplus earnings exceeding “a reasonable profit.” It would set up a Reasonable Profits Board made up of three presidential nominees that will serve three-year terms. Unlike other bills setting up advisory boards, the Reasonable Profits Board would not be made up of any nominees from Congress.
The bill would also seem to exclude industry representatives from the board, as it says members “shall have no financial interests in any of the businesses for which reasonable profits are determined by the Board.”
Oil companies would only be able to make less than a reasonable profit without penalty. Anything over 105% of reasonable would be taxed at 100%. Proceeds of the confiscation would be dedicated to tax credits for high-milage vehicle purchase and mass transit subsidies for the poor.
Peeling back the layers of stupidity in H.R. 3784 would be akin to peeling an artichoke. In the interest of time, I will cut to my central point.
Implicit in the very suggestion that a Windfall Profit Tax is called for is the notion that somehow the oil companies are able to manipulate the price of oil, and hence, gasoline.
Gasoline prices are at historically high prices. Despite the spike above $4.00 per gallon in 2008, you actually paid 10% more at the pump in 2011.
When we refer to the industry as “oil and gas”, we mean “oil and natural gas”, not oil and gasoline. All oil companies make a substantial fraction of their revenue — many more than half — from natural gas.
The price of natural gas has plunged to 10 year lows recently as a result of warm winter temperatures, slack industrial demand and burgeoning supplies.
Natural gas prices have fallen to levels that make it difficult to justify drilling for more. Many of the new supplies of gas that come on will be incidental to the successful search for oil.
I challenge anyone who believes that oil companies control the price of oil and gasoline to explain how they do it, and why they seemingly have no control of natural gas.