Flying in the Face of Flossie
Out here in the middle of the Pacific Ocean we are awaiting the arrival of Tropical Storm Flossie. So far, just rain but the winds are expected to pick up and the rain should become much more intense. Note: big waterfalls!!!! 🙂 Our power will go out…it already did this morning even before the storm hit. We’re used to it – Hawaii Electric Company is incompetent and has no competition so they couldn’t care less. So it’s appropriate that Carl sent the information below on energy production and the US. Good stuff – take it away, Carl!!
Oil and Gas: Rest of the Story
Today’s Commentary Comes From The Emerging Reality of US Technology and Resources. It is VERY good news for America!
It’s been pointed out on these reports several times in the last year, but it is now becoming a real opportunity. The United States, developer of energy extraction technologies, is moving to replace Saudi Arabia and eventually the entire Middle East in gas and oil production.
The really good news: Almost all these breakthroughs are private sector, not subject to the snail’s pace of government programs (although environmentalists have tried to slow or stop some of the technologies). Further, the drilling and production has created a boom in state economies, like Texas. But particularly North Dakota, where jobs almost go begging.
On a larger front, the US increase in oil and gas production, and the projection of same, means energy markets will likely see prices drop. It’s called the market. But large increases in supply mean the US could become a net exporter of energy, and sensitivities to current suppliers (like Saudi Arabia) could largely disappear.
Billionaire Saudi Prince Alwaleed bin Talal has warned shale oil and gas development poses a threat to the kingdom’s economy, the Wall Street Journal’s Summer Said reports.
All this being said, don’t be surprised if self-serving politicians try and grab credit. After George W. Bush, permitting of new leases on public lands has been in decline. Most of this boom is occurring in private land.
Now, the graphs:
Saudi Arabia needs high oil prices to function — Below $80 and the kingdom starts getting into trouble. There are some trends that could easily push prices must lower.
But oil’s share of the world’s energy mix is falling. Meanwhile, gas’s is rising.
The Saudis may still lead in oil production, but the U.S. is gaining fast.
Note: US Production in 2013 already exceeds Saudi production.
Here is the guy you can thank:
George P. Mitchell turned hydraulic fracturing from an experimental technique into an energy-industry mainstay, making it possible to pump oil and gas from once untappable rocks and unleashing an energy boom across the U.S.
Houston Chronicle/Associated PressGeorge P. Mitchell with a statue of himself at The Woodlands in 2007
Known as the father of fracking, Mr. Mitchell died Friday at age 94 at his home in Galveston, Texas.
The co-founder of Mitchell Energy & Development Corp. spent years pushing his company’s engineers to find ways to get more natural gas out of the ground, especially from rocks that seemed too tough to drill. They finally figured out successful ways to break up shale rocks with pressurized water, chemicals and sand in the process known as hydraulic fracturing.
“George Mitchell, more than anyone else, is responsible for the most important energy innovation of the 21st century,” said Daniel Yergin, vice chairman of consulting firm IHS and a Pulitzer Prize winning author on energy.
The son of poor Greek immigrants, Mr. Mitchell graduated with a degree in petroleum engineering from what is now Texas A&M University in 1940. After serving in the U.S. Army Corps of Engineers during World War II, Mr. Mitchell and his brother Johnny started an oil exploration business in Houston in 1946.
His first efforts at fracking, in the late 1970s, were expensive, and at times investors and his board of directors questioned the spending. But by the late 1990s the company had figured out the right mix of techniques and materials to produce shale gas economically, and began to do so on a major scale.
Devon Energy Corp. bought Mr. Mitchell’s firm in 2002 for $3.1 billion, combined the hydraulic fracturing techniques with horizontal drilling, and helped launch the current surge in oil and gas production.
In the 1970s Mr. Mitchell put his energy wealth to work developing thousands of acres of pine forest north of Houston into a master-planned residential community, The Woodlands.
“George didn’t want The Woodlands to become just another bedroom community but to also become a major employment center,” said Bill White, a former Houston mayor and assistant secretary of energy. “That’s why today there are just as many people commuting into The Woodlands as there are out of it.”
Mr. Mitchell was also instrumental in preserving large parts of his hometown of Galveston, a coastal city that has struggled economically. Last year he joined with New York Mayor Michael Bloomberg’s philanthropic foundation to study ways to develop oil and natural gas reserves around the country in an environmentally responsible way.
Write to Tom Fowler at firstname.lastname@example.org
GOD BLESS AMERICA – PASS THIS ON!!
- PRINCE ALWALEED: Fracking Is Going To Crush The Saudi Economy If Nothing Is Done (businessinsider.com)