USA Produces More Oil
US domestic Crude Oil production grows despite federal restrictions
A Department of Energy (DOE) report released this week, predicting that US Crude Oil production will rise and gasoline prices will fall, was good news for American consumers and the US economy.
But most notably, the DOE report supports the growing vision to make America “energy independent” by Y 2020, once considered a brash, unattainable goal, but now a cornerstone of Republican Mitt Romney bid this for the US Presidency this November.
“Domestic production is up 15% over last year, with no end in sight,” said John Staub, a DOE spokesman in Washington, DS who released data this week showing Crude Oil production is the highest in 14 yrs.
Oil and Gas extracted from the Eagle Ford Shale formation in Texas and the Bakkan formation in North Dakota and Montana have exceeded expectations and are responsible for the domestic increase, according to Mr. Staub.
The US Geological Survey recently revised its Y 1995 estimate of 500-M bbls to a stunning 4-B bbls for the Bakkan region, covering land about the size of France.
And even more potential Oil and Gas reserves are located on public land in the US West, land that is protected by environmental groups and the Obama administration.
In Y 2008 there were 2,416 new Crude Oil and Nat Gas leases issued on federally protected Bureau of Land Management (BLM) land, with 2.6-M acres leased.
Under the Obama administration, the number of new leases issued has dropped to 1,308 and the number of acres leased dropped to 1.3-M, according to the Denver, Colorado-based Western Energy Alliance (WEA).
“We’re looking at the potential of 1.3-T bbls coming from shale oil production on federal lands in the west, which has been hampered and slowed by federal regulations and the approval process,” said Kathleen Sgamma, the WEA’s vice-president of government and public affairs. “We could be doing much more for the USA to achieve energy independence if it wasn’t for our government. And our estimates are very conservative.”
The WEA, representing some 400 energy companies in the western states, concluded its 3-day Y 2012 annual meeting Friday in the spectacular snow-capped mountain setting of Snowmass, Colorado.
The WEA lobbies Congress on behalf of the Oil and Gas industry to open up development on the US West’s Oil-rich lands that are currently controlled by the BLM.
The WEA says that projects “currently awaiting BLM approval” could create 120,905 jobs, US$8-B in wages, US$27.5-B in economic activity, and US$139-M in government revenue every year.
The total economic impact of just 22 projects, over their 15-yr lifespan, is US$383.5-M, according to the WEA.
The federal government is putting off energy supplies on land that all of America owns. Some counties in Utah and Colorado are located on land that is 90% public, but people in those areas are being denied economic opportunity due to excessive government regulation.
The BLM counters that market forces have driven down the need to approve permits on government land. “We’ve seen a dramatic drop in the price of oil and gas, and we’re less inclined to approve permits when the demand is down,” said Steven Hall, BLM communications director for Colorado.
The WEA also points to an increase in federal regulations, releasing a study this week showing that federal rules, proposed in May to regulate drilling on public lands, will cost the energy industry fUS$1.615-B annually, and thousands of potential jobs. But Department of the Interior officials defend the regulations as necessary to protect the environment.
There is no doubt America needs jobs. As the unemployment rate rose in 18 US states and rose to 8.2% nationally in May, thousands of Americans are relocating to the Oil and Gas fields of North Dakota and Texas to find jobs.
Only the states of North Dakota and Alaska are in “actual economic recovery,” according to a newly-released Moody’s Analytics report, and that is said to be a result of less-restricted growth of Oil and Gas exploration on private lands.
Oil and Gas companies are turning away from the public lands, where the opportunity is enormous, and doing production on private lands that have less restrictions.
Former US president Richard Nixon 1st identified the country’s need to become independent of foreign Crude Oil some 40 yrs ago, pointing to unstable Middle East countries as unreliable sources.
But as recently as under the George W. Bush administration, more than 60% of America’s Crude Oil consumption came from overseas. DOE statistics now say less than 50% of American’s Crude Oil is imported, an all-time low, and that figure is dropping daily.
A 2012 Citigroup (NYSE:C) report, analyzed this week by the scientific publication Consumer Reports, predicts that production of shale Oil, sand Oil, Green cars and Gulf of Mexico Crude Oil will make the United States independent of foreign Crude Oil by Y 2020. The report did not include analysis of the potential of Crude Oil and Gas production on lands protected by the federal government.
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Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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