The Financial Times [subscription] is reporting that the US is poised to become the world’s largest producer of liquid petroleum (oil and natural gas liquids):
US production of oil and related liquids such as ethane and propane was neck-and-neck with Saudi Arabia in June and again in August at about 11.5m barrels a day, according to the International Energy Agency, the watchdog backed by rich countries.
With US production continuing to boom, its output is set to exceed Saudi Arabia’s this month or next for the first time since 1991. [...]
Rising oil and gas production has caused the US trade deficit in energy to shrink, and prompted a wave of investment in petrochemicals and other related industries. [...] It is also having an impact on global security. Imports are expected to provide just 21 per cent of US liquid fuel consumption next year, down from 60 per cent in 2005.
The reason? Fracking. As Walter Russell Mead points out:
With productivity continuing to rise, the United States has a chance to become the single biggest producer of crude oil sometime in the near future. If you had said that a decade ago, you would’ve been laughed at and called a fool. What a difference fracking makes.
Indeed. The “peak oil” pundits were sure we were on the precipice of running out of oil. Now, it seems, the sky is indeed the limit. Which is why it makes little sense, given the state of climate science, that our President is busily engaged via the UN and other domestic agencies, in throttling back one of the most economically viable growth engines the American economy has at the moment (and for the foreseeable future).
Instead of working on a policy to limit future use of hydrocarbons, this White House should be pushing a policy that helps us safely and sustainably exploit these assets for all. Additionally, while petroleum is indeed a global commodity, this level of production would go a long way toward the promise of energy independence in time of crisis. It helps remove oil as a weapon of choice by various less than friendly states and allies of convenience.
Two winners for the US: economic growth and national security.
Instead we get an attempt to establish an new tax based on specious science.
Sort of par for the course, no pun intended.
President Obama is fond of claiming that oil production is up at record highs for the past 8 years under his administration.
Well, yes, but here’s the clinker for him – they’re at record highs despite his administration not because of it. In fact, he could have been a hero and had oil production at epic highs had he not instead done all he could to slow down oil production on federal lands.
“Yeah, yeah, we know McQ, you’ve been harping on this for weeks, but all you can do is throw out a counter-claim that he’s full of it.”
Well, let’s go to the numbers, shall we?
Here are the production figures for the last 4 years. Note the “Total Federal”. Note the decline. I’m not the one trying to hide the decline, the White House is. Note too the difference between 2009 and 2011.
On the privates side of things, note total NonFederal. Alaska has declined but others have boomed. In fact so much that the NonFederal (i.e. state and private) have been able to offset the large drop in Federal land oil production and show a net increase. That’s the number for which Obama has been trying to take credit.
And if you think oil is bad, check out natural gas:
Again total Federal shows a huge decline. Once more look at 2009 vs. 2011. Then look at the huge boom in NonFederal production.
The claim made by Obama, while technically true, is true despite the Federal government. One way to better state that is while oil and gas production as a whole is higher than it has been in 8 years, oil and gas production on Federal lands is off significantly because of the Obama administration (and not forecast to increase).
A few more facts. You’ll note that production is down in Alaska for both oil and gas? In 2008, the oil and gas industry spent $2.6 billion to obtain 487 leases in the Chukchi Sea. To this date, the administration has not allowed a single well to be drilled on any of these leases. But they’ll gladly whine about Big Oil holding all these leases, won’t they?
Current estimates show production on Federal leases in the Gulf of Mexico are down 22%. Of course that’s the most significant portion of potential oil production the government controls. It doesn’t get any better. The forecast for production this year is it will be down 30%. But, of course, that couldn’t possibly effect price, could it?
Finally, while onshore Federal oil production (not gas) has shown a modest gain, it could be much higher if the Federal government would cooperate in the Western Colorado area. There, leasing is down by 68 percent since President Obama took office, and the number of wells drilled is also down. 68%. But, you know, “drill, baby, drill” won’t work, will it?
See the freakin’ numbers.