#WINNING: USA fracks its way to a fuel surplus
LOSING: OPEC and “fractivists.”
Back in 2011, as that season’s presidential pandering was getting revved up, the President Obama said we can’t drill our way out of energy problems.
President Obama called for the elimination of billions of dollars in oil industry tax breaks Friday, while stressing that the United States can’t drill its way out of high gas prices.
“We can’t just drill our way out of the problem,” Obama said during an energy policy speech in Indiana Friday.
I hate to admit it: Obama is right. We didn’t drill our way out, we fracked our way to a fuel surplus. There has been so much winning recently that OPEC is now complaining.
The Organization of Petroleum Exporting Countries (OPEC) asked the U.S. to stop producing so much oil, according to a report Thursday.
OPEC’s report blames the U.S. in particular because hydraulic fracturing, or fracking, has greatly increased American oil production. The new production has led a lengthy period of very low oil prices. OPEC claims raising global oil prices will “require the collective efforts of all oil producers” and should be done “not only for the benefit of the individual countries, but also for the general prosperity of the world economy.”
New American oil production is undermining OPEC’s efforts to keep global prices between $50 and $60 per barrel, with current prices hovering around $47 a barrel.
“I think [OPEC] are now acutely aware that they don’t have the kind of influence they used to have 10 years ago, and that shale is now the swing producer in the market,” Tom Pugh, commodities economist at Capital Economics, told CNN Money.
The fracking industry seems to be unbound with President Donald Trump in charge. The petroleum industry actually now has the temerity to demand that anti-fracking stories be labeled by Google as #FakeNews!
An oil and gas drilling advocacy group published an open letter to Google asking the search engine giant to consider “purging or demoting” websites spreading misinformation about hydraulic fracturing.
Google rewrote its search engine algorithm to bury “fake news” websites in the wake of the 2016 presidential election. The industry-funded Texans for Natural Gas wants Google to include anti-fracking websites.
“We believe many of the most prominent anti-fracking websites have content that is misleading, false, or offensive – if not all three,” the group wrote in an open letter to Google published Monday.
“As a result, we urge you to consider purging or demoting these websites from your algorithm, which in turn will encourage a more honest public discussion about hydraulic fracturing, and oil and natural gas development in general,” the group wrote.
Ronald Baily, the science correspondent for Reason magazine, has a great summary of the lies told about fracking. The tall tales of explosions, poisons, pollution, cancer, and global warming are clearly untrue, and should really be the targets of any Google truth campaign.
Tom Shepstone, a contributor for Natural Gas Now, has coined a term for anti-fracking eco-activists: Fractivists. Shepstone has analyzed the data and concludes that there will be fracking “as far as the eye can see.”
Thursday and Friday’s Today In Energy posts from the Energy Information Administration (EIA) together provide a big picture of our energy future. It is one of unstoppable natural gas. Fracking is here to stay. The first post, by Richard Bowers, is about how natural gas has displaced coal in the Northeast with respect to electricity generation. The second, by the EIA staff, is all about the expected decline in nuclear energy capacity and generation. Put them together and all you see is unstoppable natural gas.
I hope my friends in the other 49 states enjoy their lower fuel prices. We Californians not only have to be content with energy suppliers, but also energy taxers.
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If we keep producing may be best chance to choke the mad bombers out of existence as oil money probably funds most of it
This is Fracking Awesome!
And if we all drive 55, will there be any terrorists left alive? (After they’ve all drowned in their unsold oil?)
The Organization of Petroleum Exporting Countries (OPEC) asked the U.S. to stop producing so much oil, according to a report Thursday.
Anyone remember OPEC working to lower prices when they went way over $100/barrel?
Meanwhile fracked natgas is replacing coal and fuel oil to dramatically reduce emissions. The USA is the only industrialised nation that might achieve it’s Kyoto protocol targets.
Scientific American reported that New York City replaced fuel oil with fracked natural gas and the air quality has improved so much that lives are literally being saved.
So OPEC is whining. Boo “fracking” hoo!! Poor babies – they might have to close an indoor ski slope or two. Cry me a river.
Obama: You can’t drill your way to an oil surplus.
Oil Industry: Here, hold my beer.
Good one George.
This could be the story in the UK as well (and it could still very well end up that way). Sadly Green Interests ™ are far more entrenched here than in the US.
Considering the shale deposits in the UK are of a much higher quality than the US shale plays the UK COULD be a world leader not only in producing shale gas but also in producing the technology required to extract as much gas as possible out of every play!
As I said though, the real impediment to progress are the Greens in this country! Propped up by Russian money (ahahahaha…just had to get them in there as its always Russias fault) they have done everything possible to slow down and make shale extraction as expensive and impossible as possible.
Actually, the impediment to progress is the dirty money behind the Greens. They consider themselves as the masters of the universe and not so long ago, the were sure their cabal was about to achieve the progressive ambition of one-world government ruled by a handful of oligarchs. I read that their last Devos meeting was pretty glum. Winning! Thumbs up baby!
Further more, one of the favourite excuses proffered up by the Greens is that shale gas is too expensive and wouldn’t reduce the price of energy in the UK.
What the Greens are actually hiding is the fact that as Shale gas doesn’t require one penny of tax payers money to get it out of the ground. This is because unlike energy derived from ground unicorn horn or mirrors, shale gas is a real form of energy.
There is real money to be made by the gas industry and because there is real money to be made not one penny of tax payer subsidy is required to prop the shale industry up (unlike the unicorn horn and mirror industry).
Secondly, these greens ignore the fact that it really doesn’t matter if shale gas reduces energy costs or not. What a home grown shale industry provides the UK is protection from manipulation from unfriendly countries who aren’t afraid to turn off the gas or petrol valves if we don’t do their bidding! Shale gas can provide the UK with a level of energy security it does not have right now (and thats most likely by design thanks to our political overlords!).
They mocked Sarah Palin for saying “Drill Baby, Drill”, but she has been proven right.
After the way OPEC has conducted itself over the last 40 years or so they’ve got a lot of cojones asking the US to slow oil production. Of course it begs the question as to whether these people have any concept of capitalism and private enterprise? Seriously? As if our government could slow production?
Oh, yeah. It did when Obummer was president…
The disagreement I have with this is an important one: “we fracked our way to a fuel surplus.” Now it is possible the author knows better but is simply using a phrase that sends a message easily, but it is NOT CORRECT to say we have a surplus. The US is still a net importer of crude to the tune of approx. 6 million barrels per day. We do export crude oil, but those exports are occurring for either logistical or arbitrage opportunity reasons, not because we have a surplus of crude. We are net exporters of refined products, by net I mean we export more refined products the our total imports of refined products.
I see this kind of language in articles about oil matters all to often and I see it a misleading and a serious error by authors. Words have meaning and should be used accurately. Miss- used as the word surplus is here, almost puts this story in what Michael Crichton called the “wet streets cause rain” category.
I’m not sure if calling us a “Net Importer” is correct if you take into account coal and other carbon based energy products exported. If we are not there now, as a net exporter, this article in the NYT says we will be there shortly . . .
http://www.nytimes.com/2012/11/13/business/energy-environment/report-sees-us-as-top-oil-producer-in-5-years.html
Who can doubt the Fracking Industry is a top reason for this turnaround?
Let me be clear, I spent my career in the oil industry and from early on (70s) watched in amazement how poorly and inaccurately news about all things related to the industry were reported. Primarily by anti oil reporters. I don’t now want to see folks who may look favorably on the industry and it’s considerable accomplishments do the same.
Amen to that! I wrote my two main college papers in 1976 on the oil industry and a few more in grad school. Now I am an investment advisor with core holdings in energy. There is no consistency nor internal logic to what gets reported. We can’t get the three reporting departments of the US Dept of Energy to agree on the reported oil inventories. One reports a surprise draw while the other(s) report build(s). Why can’t the ever get it right or at least agree?
It’s worse today because of all of the speculation (reportedly 92% of oil futures contracts are owned by speculators). We saw last week what happens when a hedge fund gets caught invested correctly but hedged incorrectly. BOOM!
My take is that it is not so much that reporting is anti-oil so much as pro-Big Oil. Everyone is always explained in terms that favor OPEC and/or the big integrated global oil companies. We were supposed to be witnessing the end of oil. Fracking was doomed. No one got it right.
Well, almost no one. Those investors who were building the pipelines got it right. I have yet to see the WSJ get anything right.
I would agree that a very large percentage of the trading volume for the major oil futures contracts is executed by specs. Maybe it is 90% plus. Ownership is still more biased towards industry participants, as “open interest” better defines ownership in my opinion. Check out the CFTC Report, you might also be amazed at the huge number of specialty contracts, say up-downs, and a number of other things you may never of heard of.
As to reporting inventory levels, remember that the API report is done by the American Petroleum Institute, not a government entity. The API report is voluntary and at one time there were a few very large companies who did not volunteer, don’t know if that is still true. In spite of the frustrating inconsistencies, I actually think EIA/DOE do a reasonably decent job of dealing with a huge volume of data in an extremely complicated market.
Gasoline can be purchased in the Raleigh, N.C. area for as low as $2.03 per gallon, even as N.C. has one of the highest rates of state tax on fuel. The price of gasoline is a direct result on the downward pressure against oil speculators resulting from the Fracking Industry. In my ever so humble opinion, the Fracking Industry single handedly destroyed the Saudis and OPEC, without firing a shot and without a single loss of life.
There’s a cross-state natural gas double pipeline going in a half mile north of my house. Drill baby drill!
Cheap and abundant energy is wealth to the masses. The people who benefit most are the poor, who would otherwise spend a huge proportion of their incomes for expensive energy. The working poor, who cannot afford a Tessla electric sports car, will bear the burden of the new gas taxes in California.