Posts Tagged ‘shale’

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OPEC takes backseat to U.S. shale

June 25, 2013

Fracking continues to diminish the influence and domination of global energy markets by the Organization of Petroleum Exporting Countries by increasing American production.  The weakening of OPEC means:  1) a smaller chance of price shocks and supply disruptions, 2) less dependence on hostile Middle Eastern countries, along with a reduced need for political and military entanglement with those countries, and 3) less petrodollars flowing toward terrorism.

This June 4 editorial from the Houston Chronicle explains how technological advances are causing major shifts in the balance of global power:

Move over, OPEC

Things are getting interesting vis a vis OPEC and the U.S. shale industry.

The once-omnipotent oil cartel is taking serious notice of the impact of the shale boom on global oil prices and markets.

As well it should. Increased shale oil production domestically is pushing the U.S. toward potential energy self-sufficiency by 2018, analysts predict. Boosts in shale oil production in this country already are cutting deeply into OPEC’s share of the U.S. oil market.

And that isn’t even to mention the potential impact of shale gas on the oil cartel. It’s turning out that natural gas from shale is the true bonanza wrought by hydraulic fracturing and horizontal drilling, the two technologies that have given this country access to one hundred-plus year supplies of energy almost overnight.

Since 1992, expanded use of natural gas by the nation’s electric utilities has dropped greenhouse gas pollution by 20 percent.

Expansion of the use of environmentally friendly natural gas into this nation’s huge transportation sector is in its toddler stages. The possibilities here are enormous – and threatening if you are a global energy cartel beset by internal disagreements over where to set production levels.

For decades, OPEC enforced a “take no prisoners” position on oil prices that sent the global and U.S. economies on costly roller-coaster rides tied to price and availability of oil.

We wouldn’t go so far as to suggest that the U.S. take a formal position of tit for tat.

We’d simply say that the shale boom offers the country, and perhaps the world, the opportunity of slipping OPEC’s leash while stabilizing the U.S. and other economies.

Common sense tells us we should take it, and leave OPEC to deal with the consequences on its own…

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U.S. oil shale clobbers Saudi reserves

July 1, 2012

Even among the counter-jihad community, there is a great deal of pessimism and defeatism about the stranglehold that Saudi Arabia and the other Persian Gulf states have on the world oil economy.  We routinely hear things like, “every time you fill your gas tank, you’re funding terror.”

But it doesn’t have to be that way.  We can out-produce the Saudis if we only had the political will to tap into the resources beneath our feet.

An excerpt from a recent Cato’s Domain post sheds light on the subject, and includes an Institute for Research Energy graph that shows potential U.S. oil shale is nearly eight times larger than Saudi oil reserves!

…If we can sweep the carbon jihad aside this could lead to enormous benefits for the US, ranging from millions of well-paying jobs to strengthened diplomatic clout and a rejuvenated military policy. That reducing imports will affect our policies on both of those foreign policy fronts in the Middle East, for example, needs no elaboration.

We read about the potential in the shale fields for natural gas production, and that is stunning. But shale oil has nearly as large a potential, some on private and a great deal on federally-controlled land. Under Obama’s administration federal lands have been put off-limits for development. Locking that potential away is way beyond foolish: it’s economically, socially and politically criminal. The amount of oil in these shale formations is game-changing not only for the USA but for the world. Just opening up the federal lands NOT recognized as national treasures (think Yellowstone and Yosemite), even under tight and necessary environmental controls, would yield unbelievably positive outcomes.

Institute for Energy Research bar graph shows that the US has 2,118 billion barrels of potential oil shale while Saudi Arabia, our next closest rival, has only 200 billion barrels in oil reserves.

We are now and will be for the indefinite future a petroleum-based economy, as will every other major economy on the planet. In the last 30 years of carbon jihad the percentage of energy created by “renewables” has actually dropped. It will still be under 11% in 2030. Shutting down O&G production on the theory that we could replace those BTUs with alternative sources is incredibly stupid; progressive’s mindless war on carbon must be ended and replaced with reality-based policies…