Seems like a straightforward article on oil production
whygohome
Posts: 2,305
http://www.huffingtonpost.com/huff-wire ... -oil-boom/
US may soon become world's top oil producer
JONATHAN FAHEY | October 23, 2012 01:39 PM EST | AP
NEW YORK — U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world's biggest producer.
Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.
The boom has surprised even the experts.
"Five years ago, if I or anyone had predicted today's production growth, people would have thought we were crazy," says Jim Burkhard, head of oil markets research at IHS CERA, an energy consulting firm.
The Energy Department forecasts that U.S. production of crude and other liquid hydrocarbons, which includes biofuels, will average 11.4 million barrels per day next year. That would be a record for the U.S. and just below Saudi Arabia's output of 11.6 million barrels. Citibank forecasts U.S. production could reach 13 million to 15 million barrels per day by 2020, helping to make North America "the new Middle East."
The last year the U.S. was the world's largest producer was 2002, after the Saudis drastically cut production because of low oil prices in the aftermath of 9/11. Since then, the Saudis and the Russians have been the world leaders.
The United States will still need to import lots of oil in the years ahead. Americans use 18.7 million barrels per day. But thanks to the growth in domestic production and the improving fuel efficiency of the nation's cars and trucks, imports could fall by half by the end of the decade.
The increase in production hasn't translated to cheaper gasoline at the pump, and prices are expected to stay high relatively high for the next few years because of growing demand for oil in developing nations and political instability in the Middle East and North Africa. Still, producing more oil domestically, and importing less, gives the economy a significant boost.
The companies profiting range from independent drillers to large international oil companies such as Royal Dutch Shell, which increasingly see the U.S. as one of the most promising places to drill. ExxonMobil agreed last month to spend $1.6 billion to increase its U.S. oil holdings.
Increased drilling is driving economic growth in states such as North Dakota, Oklahoma, Wyoming, Montana and Texas, all of which have unemployment rates far below the national average of 7.8 percent. North Dakota is at 3 percent; Oklahoma, 5.2.
Businesses that serve the oil industry, such as steel companies that supply drilling pipe and railroads that transport oil, aren't the only ones benefiting. Homebuilders, auto dealers and retailers in energy-producing states are also getting a lift.
IHS says the oil and gas drilling boom, which already supports 1.7 million jobs, will lead to the creation of 1.3 million jobs across the U.S. economy by the end of the decade.
"It's the most important change to the economy since the advent of personal computers pushed up productivity in the 1990s," says economist Philip Verleger, a visiting fellow at the Peterson Institute of International Economics.
The major factor driving domestic production higher is a newfound ability to squeeze oil out of rock once thought too difficult and expensive to tap. Drillers have learned to drill horizontally into long, thin seams of shale and other rock that holds oil, instead of searching for rare underground pools of hydrocarbons that have accumulated over millions of years.
To free the oil and gas from the rock, drillers crack it open by pumping water, sand and chemicals into the ground at high pressure, a process is known as hydraulic fracturing, or "fracking."
While expanded use of the method has unlocked enormous reserves of oil and gas, it has also raised concerns that contaminated water produced in the process could leak into drinking water.
The surge in oil production has other roots, as well:
_ A long period of high oil prices has given drillers the cash and the motivation to spend the large sums required to develop new techniques and search new places for oil. Over the past decade, oil has averaged $69 a barrel. During the previous decade, it averaged $21.
_ Production in the Gulf of Mexico, which slowed after BP's 2010 well disaster and oil spill, has begun to climb again. Huge recent finds there are expected to help growth continue.
_ A natural gas glut forced drillers to dramatically slow natural gas exploration beginning about a year ago. Drillers suddenly had plenty of equipment and workers to shift to oil.
The most prolific of the new shale formations are in North Dakota and Texas. Activity is also rising in Oklahoma, Colorado, Ohio and other states.
Production from shale formations is expected to grow from 1.6 million barrels per day this year to 4.2 million barrels per day by 2020, according to Wood Mackenzie, an energy consulting firm. That means these new formations will yield more oil by 2020 than major oil suppliers such as Iran and Canada produce today.
U.S. oil and liquids production reached a peak of 11.2 million barrels per day in 1985, when Alaskan fields were producing enormous amounts of crude, then began a long decline. From 1986 through 2008, crude production fell every year but one, dropping by 44 percent over that period. The United States imported nearly 60 percent of the oil it burned in 2006.
By the end of this year, U.S. crude output will be at its highest level since 1998 and oil imports will be lower than at any time since 1992, at 41 percent of consumption.
"It's a stunning turnaround," Burkhard says.
Whether the U.S. supplants Saudi Arabia as the world's biggest producer will depend on the price of oil and Saudi production in the years ahead. Saudi Arabia sits on the world's largest reserves of oil, and it raises and lowers production to try to keep oil prices steady. Saudi output is expected to remain about flat between now and 2017, according to the International Energy Agency.
But Saudi oil is cheap to tap, while the methods needed to tap U.S. oil are very expensive. If the price of oil falls below $75 per barrel, drillers in the U.S. will almost certainly begin to cut back.
The International Energy Agency forecasts that global oil prices, which have averaged $107 per barrel this year, will slip to an average of $89 over the next five years – not a big enough drop to lead companies to cut back on exploration deeply.
Nor are they expected to fall enough to bring back the days of cheap gasoline. Still, more of the money that Americans spend at filling stations will flow to domestic drillers, which are then more likely to buy equipment here and hire more U.S. workers.
"Drivers will have to pay high prices, sure, but at least they'll have a job," Verleger says.
US may soon become world's top oil producer
JONATHAN FAHEY | October 23, 2012 01:39 PM EST | AP
NEW YORK — U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world's biggest producer.
Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.
The boom has surprised even the experts.
"Five years ago, if I or anyone had predicted today's production growth, people would have thought we were crazy," says Jim Burkhard, head of oil markets research at IHS CERA, an energy consulting firm.
The Energy Department forecasts that U.S. production of crude and other liquid hydrocarbons, which includes biofuels, will average 11.4 million barrels per day next year. That would be a record for the U.S. and just below Saudi Arabia's output of 11.6 million barrels. Citibank forecasts U.S. production could reach 13 million to 15 million barrels per day by 2020, helping to make North America "the new Middle East."
The last year the U.S. was the world's largest producer was 2002, after the Saudis drastically cut production because of low oil prices in the aftermath of 9/11. Since then, the Saudis and the Russians have been the world leaders.
The United States will still need to import lots of oil in the years ahead. Americans use 18.7 million barrels per day. But thanks to the growth in domestic production and the improving fuel efficiency of the nation's cars and trucks, imports could fall by half by the end of the decade.
The increase in production hasn't translated to cheaper gasoline at the pump, and prices are expected to stay high relatively high for the next few years because of growing demand for oil in developing nations and political instability in the Middle East and North Africa. Still, producing more oil domestically, and importing less, gives the economy a significant boost.
The companies profiting range from independent drillers to large international oil companies such as Royal Dutch Shell, which increasingly see the U.S. as one of the most promising places to drill. ExxonMobil agreed last month to spend $1.6 billion to increase its U.S. oil holdings.
Increased drilling is driving economic growth in states such as North Dakota, Oklahoma, Wyoming, Montana and Texas, all of which have unemployment rates far below the national average of 7.8 percent. North Dakota is at 3 percent; Oklahoma, 5.2.
Businesses that serve the oil industry, such as steel companies that supply drilling pipe and railroads that transport oil, aren't the only ones benefiting. Homebuilders, auto dealers and retailers in energy-producing states are also getting a lift.
IHS says the oil and gas drilling boom, which already supports 1.7 million jobs, will lead to the creation of 1.3 million jobs across the U.S. economy by the end of the decade.
"It's the most important change to the economy since the advent of personal computers pushed up productivity in the 1990s," says economist Philip Verleger, a visiting fellow at the Peterson Institute of International Economics.
The major factor driving domestic production higher is a newfound ability to squeeze oil out of rock once thought too difficult and expensive to tap. Drillers have learned to drill horizontally into long, thin seams of shale and other rock that holds oil, instead of searching for rare underground pools of hydrocarbons that have accumulated over millions of years.
To free the oil and gas from the rock, drillers crack it open by pumping water, sand and chemicals into the ground at high pressure, a process is known as hydraulic fracturing, or "fracking."
While expanded use of the method has unlocked enormous reserves of oil and gas, it has also raised concerns that contaminated water produced in the process could leak into drinking water.
The surge in oil production has other roots, as well:
_ A long period of high oil prices has given drillers the cash and the motivation to spend the large sums required to develop new techniques and search new places for oil. Over the past decade, oil has averaged $69 a barrel. During the previous decade, it averaged $21.
_ Production in the Gulf of Mexico, which slowed after BP's 2010 well disaster and oil spill, has begun to climb again. Huge recent finds there are expected to help growth continue.
_ A natural gas glut forced drillers to dramatically slow natural gas exploration beginning about a year ago. Drillers suddenly had plenty of equipment and workers to shift to oil.
The most prolific of the new shale formations are in North Dakota and Texas. Activity is also rising in Oklahoma, Colorado, Ohio and other states.
Production from shale formations is expected to grow from 1.6 million barrels per day this year to 4.2 million barrels per day by 2020, according to Wood Mackenzie, an energy consulting firm. That means these new formations will yield more oil by 2020 than major oil suppliers such as Iran and Canada produce today.
U.S. oil and liquids production reached a peak of 11.2 million barrels per day in 1985, when Alaskan fields were producing enormous amounts of crude, then began a long decline. From 1986 through 2008, crude production fell every year but one, dropping by 44 percent over that period. The United States imported nearly 60 percent of the oil it burned in 2006.
By the end of this year, U.S. crude output will be at its highest level since 1998 and oil imports will be lower than at any time since 1992, at 41 percent of consumption.
"It's a stunning turnaround," Burkhard says.
Whether the U.S. supplants Saudi Arabia as the world's biggest producer will depend on the price of oil and Saudi production in the years ahead. Saudi Arabia sits on the world's largest reserves of oil, and it raises and lowers production to try to keep oil prices steady. Saudi output is expected to remain about flat between now and 2017, according to the International Energy Agency.
But Saudi oil is cheap to tap, while the methods needed to tap U.S. oil are very expensive. If the price of oil falls below $75 per barrel, drillers in the U.S. will almost certainly begin to cut back.
The International Energy Agency forecasts that global oil prices, which have averaged $107 per barrel this year, will slip to an average of $89 over the next five years – not a big enough drop to lead companies to cut back on exploration deeply.
Nor are they expected to fall enough to bring back the days of cheap gasoline. Still, more of the money that Americans spend at filling stations will flow to domestic drillers, which are then more likely to buy equipment here and hire more U.S. workers.
"Drivers will have to pay high prices, sure, but at least they'll have a job," Verleger says.
Post edited by Unknown User on
0
Comments
1) The Democrats do not trumpet this reality
2) The GOP denies this reality
There is an unspoken nod across party lines to keep supporting the issue as they always have and I'd say at least 90% of the population is oblivious to what is going on.
I know the answer to my above question ... we want to believe in what our chosen party's message is and it's painful to acknowledge the truth. That is why it is acceptable for politicians to blatantly lie.
Someone with a psyche major must have a term for this. It may be along the way someone is blind to an abusive spouse and makes excuses because they still feel love.
where is the partisan banter?
I know this is as weird as if the "Colts and Patriots traded QB's three years ago overnight and each fanbase had to defend who was the best QB in the NFL the next morning" weird, but come on! Let's hear it.
:twisted:
Jason, I'm agreeing with you but how's that for banter?
Seems my preconceptions are what should have been burned...
I AM MINE
I'm sure that if Romney is elected in a few weeks, it will be just like the 90's when I could run my New Yorker for $5 a week.
It will all change, right? $0.96 / gallon by November 7th?
:think:
Yes they are set on world markets so why do we need to drill in protected areas or close to shorelines? I understand what some say about getting most oil from here but if we coupled that with reduced energy consumption (I'm thinking better infrastructure so we can have a true mass transit system) and alternative energy creation then we wouldn't be quite as dependent on foreign markets (like Saudi Arabia ala the 1973 oil embargo) that might artificially inflate the price of oil given our political support of certain areas of the world.
Seems my preconceptions are what should have been burned...
I AM MINE
Are you saying that the oil market can be manipulated :shock:
Seems my preconceptions are what should have been burned...
I AM MINE
well ... let's just say that they generally refer to your statement as "common sense" ... however, you need to have a populace that is not completely ignorant and indoctrinated and one that can think critically ... sadly - that is not the case ...
Wall Street.
I have friends whose live in the oil markets as commodities traders , and I have some experience working with/for them.
Well I'm at a loss -- what exactly HAS the president done to increase oil production?
Federal leases account for 11% of the natural gas production and ... 5% of the crude oil production.
In 1991 there were over 81,000 active leases on 60 million acres of federal land, in 2011 there were 49,000 active leases on 38 million acres. In the 90s there were 3,000-4,000 new leases every year, in the past 3 years there's barely been 2,000. Admitedly in the past 20 years, drilling permits have gone up, but Obama is still well short of the heydays of Bush.
So if anything, what we're seeing now regarding oil production ... wait for it ... is a result of Bush's recent leasing and drilling bonanza that has now come on line. Offshore production can take about 10 years from lease to first barrel of oil hitting a refinery.
And all that is just a drop in the bucket compared to what ... wait for it .. the private sector has done.
Hey, PJ played a political event or two this year, we should really thank Obama for the increase in Festival appearances by Pearl Jam!
http://www.blm.gov/wo/st/en/prog/energy/oil_and_gas/statistics.html
Each party platform is built on lip service. The charts show little change from admin to admin in the last 25 years.
EXACTLY -- lip service, from both sides. This is all due to the efforts of private industry and the worldwide demand keeping prices high.
I was stunned to listen to the debates and watch both sides pretend they were Big Oil manly men!