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Posts Tagged ‘Natural Gas’

U.S. Oil Production Beginning to Boom

Posted by Steve Markowitz on June 27, 2012

Since the late 1960s the mantra from politicians government bureaucrats, particularly those on the Left, has been that the world with the United States in particular is running out of fossil fuels.  This claim, like so many other dire warnings of Progressives, was dead wrong.

One of the earlier manifestations of the United States depleted energy claims came from Pres. Jimmy Carter in the 1970s.  Carter claimed that the United States would run out of natural gas in 10 years.  Approximately 35 years later not only has the United States not run out of the gas, but we are in the midst of a natural gas glut with prices dropping significantly.

Another of Carter’s infamous calls was for the creation of the US Department of Energy created specifically to lessen America’s dependence on foreign oil, specifically oil from the Middle East.  When the Department of Energy was created, the United States imported less than 35% of its oil annually.  Three decades later the US imported over 60% of its oil per year.  Along the way, Department of Energy wasted tens of billions of dollars and is larger today than ever.

Now, the US is turning the corner on its reliance on imported oil.  This has is not occurred due to any action of the Department of Energy, but instead came from advancing technologies that includes fracking, which has unlocked huge reserves of oil and natural gas.  For example, these newer technologies have turned North Dakota into a major oil producer, now surpassing Alaska.

The Wall Street Journal published an article about America’s resurgent position in world energy production that reviews the following:

  • America’s reliance on Middle Eastern oil will be cut in half by 2020 and may completely end by 2035.
  • By the end of this decade half of America’s crude oil needs will be produced in the United States with over 80% coming from the side of the Atlantic.  Canada alone has the world’s third largest proven oil reserves.  Money spent within the Hemisphere is better for America’s security and economy.
  • America currently imports 4 million barrels of oil a day from the Middle East.  That amount will decrease to about 2.5 million barrels by the end of the decade.
  • During 2011 the United States became a net exporter of refined energy products.  Experts predict this will continue for at least another 10 years.
  • Between October 2011 and March 2012, US oil production rose by 6% to more than 6 million barrels per day for the first time in 14 years.  This remarkable increase occurred after a nearly 40 year decline.

While advancing technologies played a large role in increasing America’s oil and gas production, the action of the free market also played a substantial role.  As energy prices skyrocketed in the late 1990s, liberal politicians screamed foul and attacked suppliers suggesting regulating profits to address increasing energy prices.  Such regulations would have been exactly the wrong approach and ultimately would have hurt consumers.  Instead, the increasing prices made Canada’s oil sands-reserves profitable with investment in extracting this oil skyrocketing.  In addition, worldwide investments in oil and gas exploration jumped due to the increase prices.  In North America, this investment surged to 48% of global oil investment to $320 billion, up from only 39% of the worldwide investment in 2003.  Similar examples can be shown in other Western Hemisphere countries including Brazil.

The increased energy prices that began in the late 1990s is beginning to cause production increases and lower energy prices.  Raymond James has recently forecasted 2013 crude prices at $65 per barrel, down from its current $83.  Lower demand only explains part of this decrease.  Increasing production is a significant issue.

Pres. Barack Obama and the radical environmentalists have thrown many roadblocks in the way of developing America’s vast energy reserves.  A recent example is Obama’s decision to shelve the Keystone XL pipeline that would have brought more Canadian oil to the United States.  These roadblocks were made to further Progressives’ goal of promoting green energy.  They have failed on two fronts.  First, solar and wind energy are not ready for prime time and will not be major sources of energy for years to come.  The President’s failure to promote green energy over fossil fuels again proves the futility of politicians’ attempts to manipulate markets.

Incredibly, President Obama recently attempted to claim responsibility for America’s fossil fuel boom stating: “We’ve added enough new oil and gas pipeline to encircle the Earth and then some.”  Now that’s chutzpah!

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Huge Energy Find in Gulf of Mexico

Posted by Steve Markowitz on June 26, 2011

Earlier this month Exxon Corporation announced significant energy discoveries in the Gulf of Mexico.  Two involved natural gas discovered in 2009 and 2010, but withheld until a nearby third well was completed that has since proven to contain significant oil reserves.  Together finds include about 700 million barrels of oil equivalent, one of the larger energy finds in the Gulf during the past decade.  It is estimated that these fields could produce over 200,000 barrels of oil equivalent per day when fully operational.

The new Gulf finds, together with significant other gas and oil discoveries worldwide, raise interesting issues.  It is evident that the world is not running out of fossil fuels, as the doom and gloom folks on the Left predicated in the 1970’s.  Remember when President Jimmy Carter announced in the late 1970’s that the United States would run out of natural gas within a decade?  That’s as bad as any of the many Carter wrong calls.

Carter’s false predictions concerning world energy supplies are eerily similar to more modern predictions of immanent doom from manmade global warming.  Both were/are based on junk or flawed science.  Both were/are proffered to allow Progressives redistribute wealth on a worldwide basis, the primary goal of this philosophy.  Both damage humanity.

Posted in Energy, Oil | Tagged: , , , , , , , | Leave a Comment »

Middle East Turmoil Proves the Need “Drill Baby Drill”

Posted by Steve Markowitz on February 2, 2011

With the 24-hour news showing pictures of the Egyptian chaos continuously, many are focused on the lawlessness in that country.  Many are also concerned as to what form of government will emerge Egypt after the chaos subsides.  The outcome of these issues will have far-reaching effects on the Middle East and greater world.  This will play out in Egypt and the other countries that will be enveloped in similar situations with the Untied States being but a bystander.

The current Egyptian events again bring the forefront the issue of America’s dependence on oil from unstable regimes in the Middle East.  While Egypt is not an oil producer, the Suez Canal is important in the supply chain for oil.  In addition, the instability with other Middle Eastern countries increases the shipping risk at the chokepoint that is the Straits of Hormuz.

The danger of America’s oil dependence on risky sources should have been addressed years, if not decades ago. However, politicians, mainly on the Left, banded together with radical environmentalists to hinder America’s production in coal, oil and nuclear energy.

Besides the national security argument that clearly shows the insanity of America’s energy policy, there is also a strong economic argument.  Below are two charts; one showing crude oil spot prices and the other natural gas spot prices from January 4, 2010 to February 1, 2011.  While both commodities serve similar purposes, their pricing history during this period has been quite different.  Crude oil prices hit a record high for this period this week and will probably go higher . For the same period, natural gas prices have significantly decreased from its highs.  The reason for this discrepancy is simple: we are dependent on shaky governments for crude oil with natural gas coming from within United States.

If the United States was lacking in its own energy resources, our use of foreign oil could be justified.  However, given the massive amounts of energy resources in North America, there is no excuse for America to be dependent on foreign sources.  Environmentalists and their comrades have come up with all sorts of excuses and legal moves to stop America from developing its energy resources.  While some of their concerns are valid, there is no greater threat to the United States, both economically and for national security, than being dependent on energy supplies from countries that have disdain for our culture.

The United States must immediately embark on a strategic program towards real energy independence, a goal that is doable.  Unlike previous false efforts, this program must include a plan with mandated dates for achieving predetermined goals, such as amounts of new energy supplies discovered and putting  nuclear power plant production on the fast-track.  Such a program would be similar in size and scope of President Kennedy’s plan to put a man on the moon within the decade of the 1960s.  However, the program would require bold leadership, something our current President has shown little of during his first two years in office.  In fact, his tactical approach to energy issues has hamstrung energy development in United States, focusing excessively on green technologies that do little to cut America’s dependence on foreign energy and merely creates large for companies such as General Electric.

During the presidential campaign, Vice Presidential candidate Sarah Palin used the slogan; “drill, baby, drill”.  This should be a national rallying cry for what will should America’s most important program of this generation.

Posted in National Security, Oil | Tagged: , , , , , , , , , , , , , | Leave a Comment »

Huge Natural Gas Deposits Found Offshore Israel

Posted by Steve Markowitz on January 4, 2011

For decades alarmists have issued dire warnings about the world running out of carbon-based energy supplies.  These predictions continue to be proven wrong as more and more reserves continue to be found.

Perhaps the most famous energy alarmist is former President Jimmy Carter, a man who is recognized as the worst president of modern times.  On April 18, 1977, Carter delivered his infamous televised speech on the United States and energy.  Pure Jimmy Carter, it was filled with gloom and doom that made him famous including the following quotes:

  • “Tonight I want to have an unpleasant talk with you about a problem unprecedented in our history.  With the exception of preventing war, this is the greatest challenge our country will face during our lifetimes.  The energy crisis has not yet overwhelmed us, but it will if we do not act quickly.
  • “It is a problem we will not solve in the next few years, and it is likely to get progressively worse through the rest of this century.”  Mr. Carter, on this one there is no argument; you were dead wrong!
  • We simply must balance our demand for energy with our rapidly shrinking resources.”
  • I know that some of you may doubt that we face real energy shortages.  The 1973 gasoline lines are gone, and our homes are warm again.  But our energy problem is worse tonight than it was in 1973 or a few weeks ago in the dead of winter.  It is worse because more waste has occurred, and more time has passed by without our planning for the future.  And it will get worse every day until we act.”
  • The oil and natural gas we rely on for 75 percent of our energy are running out.  In spite of increased effort, domestic production has been dropping steadily at about six percent a year.  Imports have doubled in the last five years.  Our nation’s independence of economic and political action is becoming increasingly constrained.  Unless profound changes are made to lower oil consumption, we now believe that early in the 1980s the world will be demanding more oil that it can produce.”  Again, Mr. Carter, you were just wrong.

While there is logic to the argument that carbon-based fuels exist in finite quantities, it is clear that the quantities that remain are enormous.  In all parts of the globe new supplies are being reported on a nearly daily basis.  Huge discoveries have been found off the coast of Brazil.  The eastern part of the United States has shown to house large deposits of natural gas.

Now, a huge discovery has been reposted off the coast of Israel.  The find is 84 miles off Israel’s northern coast and is called Leviathan.  It is reported that Leviathan contains 16 trillion cubic feet of gas, the world’s biggest deepwater gas find in a decade and enough to supply Israel for 100 years.  Leviathan joins other smaller finds in the Levant Basin.  Last year the U.S. Geological Survey estimated that this zone contains 1.7 billion barrels of oil and 122 trillion cubic feet of gas, about half of the United State’s proven gas reserves.

Jimmy Carter’s and his fellow Progressives disproven claims of impending shortages of carbon-based fuel joins many other disproven claims of impending disasters including swine flu, bird flu, SARs, Y2k, and many others.  The question is no longer is whether these Progressives are wrong so often, but if these errors are caused by stupidity or some nefarious reason.

While the gas finding off of Israel’s coast has geopolitical implications for the region, it and the other large findings worldwide have broader implications as to the way the world views the available carbon-based energy supplies.  This error was recognized by Progressive some years ago, which undoubtedly les them to abandoned the Jimmy Carter dwindling supply argument in favor of blaming Global Warming on the use these fuels.  It should be of little surprise to find the Global Warming theory debunked, thus joining the myriad of crying wolf inflicted on the world by those who promise to save it and thereby profit from it.

 

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