Little noticed in all the year-end political hysteria has been the good news about fossil-fuel energy production in the US and Canada. Unfortunately, the good news could have been better, if only we had better leaders.
The Globe and Mail (Dec. 8) reports that in 2010 the U.S. will end up having produced 140,000 barrels of oil a day more than it did in 2009. That’s incredible, when you consider Obama’s jihad against deepwater drilling. October, a banner month, saw 5.5 million barrels a day produced from American wells. Indeed, the US Energy Information Agency (the EIA) reports that our proven reserves of petroleum are now 22.3 billion barrels, up by 9% last year, in part because of the newly explored Green River shale oil field straddling Colorado and Utah.
America has even more bracing news about natural gas. The US now leads Russia in natural gas production. Again, this is in great measure because of expanding reliance on our extensive shale fields. We have the four largest natural gas fields in the world, and the EIA now puts our proven natural gas reserves at 284 trillion cubic feet, up 11% last year alone, and now at the highest level since 1971.
No doubt this is why China’s state-owned energy company CNOOC has cut a deal with Chesapeake Energy, according to which CHOOC will cover three-fourths of development costs and pay Chesapeake an up-front $1.08 billion for a one-third interest in its Texas natural gas project, a project that will produce the natural gas equivalent of half a million barrels of oil a day.
Our ally to the north, Canada, has also been doing well in fossil fuel energy production. Canadian oil sands production has increased dramatically; it now delivers more oil to North America than does Saudi Arabia. And while the Canadians may not love us, they don’t hate our guts. Young Canadian men don’t strap bombs around themselves and blow Americans apart. This is clearly preferable to the example of other countries.
Also exciting is the prospect of exploiting methane hydrates — essentially frozen water containing gas, found in stupefying abundance beneath ocean floors and the northern permafrost. This is something that the US and Canada can exploit when the time comes. How much of that stuff is there? The US Geological Survey estimates that even with a miserable 1% recovery rate, America could cover all of its present natural gas needs for the next century. And the UN Environmental Program hails methane hydrates as “the most abundant form of organic carbon on Earth.” Canada has been the leader in field-testing this form of gas extraction, and plans to exploit it commercially within a decade or so.
So we are doing fine in terms of resources. What is hurting us is our environmentalist-controlled leadership. We have at the federal level an administration that is hostile to fossil fuels in general and petroleum in particular, and has done its best to push us toward grotesquely costly and inefficient alternatives, such as solar and wind power.
Even at the state level, success in domestic fossil fuel production often happens in spite of, rather than because of, government help. Consider a Wall Street Journal piece (Dec. 16) about New York Governor David Paterson’s decision to issue an executive order imposing a virtual ban on drilling for natural gas within the state.
We don’t normally think of New York as a place like Texas, a petroleum-rich state. But the huge Marcellus shale formation, all 65 million acres of it, stretches from Ohio and West Virginia to Pennsylvania and upstate New York; it’s a repository of vast amounts of natural gas.
Natural gas can be readily extracted from this shale by hydraulic fracturing (“fracking”) — injecting a mixture of water and sand, together with miniscule amounts of various chemicals. Fracking, used now for over 60 years, is used in about a third of our oil and natural gas extraction. Even the EPA has published studies concluding that it’s safe.
But New York environmentalists — among the most devout in the nation — naturally oppose fracking, and the legislature there recently banned it. Paterson vetoed the bill, but put a moratorium on horizontal fracking until the New York Department of Environmental Conservation issues new regulations. This will take at least six months, and will likely manage to keep the ban in effect.
Pennsylvania — hardly a bastion of redneck petroleum lovers — saw $4.5 billion in investment in the massive shale field, creating about 44,000 jobs and $400 million in state and local taxes last year alone. Between July 2009 and June 2010, the 632 Pennsylvanian Marcellus wells produced 180 billion cubic feet of gas, doubling the state’s production.
The American Petroleum Institute reckoned that if New York allowed its shale gas to be tapped, it would provide $15 billion in economic output and $2 billion in state taxes. But New York apparently couldn’t care less about great-paying blue-collar jobs that add to the nation’s energy supplies and lessen our dependence on foreign tyrannies bent on our annihilation.
