Energy Tomorrow Blog
Posted September 15, 2014
(Wall Street Journal): Skeptics of the U.S. energy boom say it can't last much longer because it requires drilling an ever-increasing number of wells.
But the boom already has lasted longer than anyone would have imagined just a decade ago and has more room to run. That's because oil and natural-gas wells have become more productive—an unrecognized but potent trend that should keep the fuels flowing.
Posted September 9, 2014
"The more the US exports crude oil, the greater decline in gasoline prices," the study from The Brookings Institution's Energy Security Initiative claimed. "As counterintuitive as it may seem, lifting the ban actually lowers gasoline prices by increasing the total amount of crude supply, albeit by only a modest amount."
Brookings' finding are nearly identical to those of a May study from energy consultancy IHS which concluded that free trade of crude would cause US gasoline prices to fall 8-12 cents/gal due to the close link between gasoline and world oil prices.
Like IHS, the Brookings study claimed the impact of crude exports on gasoline prices dulls over time, falling from a 9-12 cent/gal drop in 2015 to 0-10 cents/gal by 2025.
Posted September 2, 2014
Reuters reports that Washington is hearing from more allies who want the U.S. to lift its ban on crude oil exports, with South Korea and Mexico joining the European Union in pressing the case for U.S. oil. Reuters:
South Korean President Park Geun-hye told a visiting U.S. delegation of lawmakers on the House of Representatives energy committee on Aug. 11 that tapping into the gusher of ultra-light, sweet crude emerging from places like Texas and North Dakota was a priority, the lawmakers said. One of South Korea's leading refiners has opened discussions with the government in Seoul over how to encourage Washington to open the taps, three sources in South Korea with direct knowledge of the matter told Reuters. Mexico is also eagerly awaiting word from the U.S. Department of Commerce on possible shipments and the EU wants U.S. oil and natural gas exports covered by a proposed trade agreement with Washington, the Transatlantic Trade and Investment Partnership.
Posted August 8, 2014
The U.S. Commerce Department’s newest trade report released this week shows increased exports of crude oil and petroleum products were a major factor in shrinking the trade deficit in June to $41.5 billion, down from $44.7 billion in May.
That’s great news. Energy exports are helping build America’s economic strength globally while creating jobs and opportunity here at home. America is more secure as a result of our energy revolution that is bringing opportunities to engage world energy markets and harness U.S. energy for good. Allowing more U.S. oil and natural gas exports is the logical course to support and expand America’s global presence.
Posted July 31, 2014
Houston Chronicle (Editorial): Fracking is more effective than bullets when it comes to containing Russian President Vladimir Putin's Soviet-era ambitions.
Empowered by oil funds and a gas pipeline yoke on Europe, Putin has resuscitated a Cold War ethos of nationalism and expansionism. Yet after the invasion of Crimea and Russian militias seizing sections of eastern Ukraine, it seemed as if Europe's red line was located somewhere a few miles east of the Brandenburg Gate. It took the attack on Malaysia Airlines flight MH17 to finally shock Europe back to reality, where Russia stands as a legitimate threat to a peaceful continent.
These aggressive moves have gained Russia few friends, but as Tsar Alexander III once said, Russia's only allies are its army and its navy. For the 21st century, pipelines should be added to that list. And that is where the United States must focus containment efforts.
Our allies are far too reliant on Russian pipelines to truly oppose Putin's aggression - there's a reason why the new technology sanctions against Russia don't apply to natural gas.
Posted July 24, 2014
The New York Times (Steven Rattner): As a young reporter covering energy for The New York Times, I saw firsthand the distortions and inefficiencies caused by the web of regulations that followed the Arab oil embargo of 1973-74, and the resulting surge in gasoline prices.
So I shared in the frisson of excitement last month when the Commerce Department cleared two Texas companies to export an ultralight, processed form of oil called condensate. It seemed like a step toward relaxing the ban on the export of crude oil, the biggest stricture remaining from the ’70s energy crisis.
But then the Obama administration quickly insisted that the Commerce Department, in narrowing the definition of crude oil so that condensate could be exported, was not about to lift the ban more widely. “There has been no change to our policy on crude oil exports,” a White House spokesman said.
That’s unfortunate, because America’s renewed hydrocarbon boom could be even more robust if we eased outdated restrictions on shipping both crude oil and liquefied natural gas overseas.
Posted July 15, 2014
A couple of highlights from the first day of the U.S. Energy Information Administration’s (EIA) annual energy conference, both of which can be used to underscore the need for policies that help sustain and grow America’s energy revolution.
First, International Energy Agency (IEA) Executive Director Maria van der Hoeven suggested exuberance over the U.S. energy boom has risks because energy security is more than just ample supply:
“In periods of abundance we must challenge ourselves with questions. And so I ask you, is your energy security as security as you or I think? … Energy security is about much more than supply. … Although things look bright at first sight, there’s no time for complacency.”
Posted May 29, 2014
Individual states would see significant job creation and economic growth from exporting U.S. crude oil, according to anew state-by-state report by ICF International and EnSys Energy. Specifically, 18 states could realize more than 5,000 new jobs each in 2020 from crude oil exports, with state economies growing by hundreds of millions of dollars each.
Kyle Isakower, API vice president for regulatory and economic policy, talked about the study during a conference call with reporters:
“There is a growing realization that this is a new era for American energy. Scarcity is giving way to abundance, and restrictions on exports only limit our potential as a global energy superpower. Additional exports could prompt higher production, generate savings for consumers, and bring more jobs to America. The economic benefits are well-established, and policymakers are right to reexamine 1970s-era trade restrictions that no longer make sense.”
Posted May 15, 2014
CNBC (Spencer Abraham/Bill Richardson): Once again the world is looking for America's leadership in unsettled times. Our diplomats have limited options to combat Russia's annexation of Crimea, but they can take greater advantage of a new tool in their toolbox that no administration has had for generations — U.S. energy abundance. American energy exports will not only create economic opportunities here at home but will provide strategic geopolitical advantages abroad.
The crisis involving Ukraine and Russia highlights the need for American energy leadership. Russia remains the world's largest exporter of natural gas, supplying 30 percent of Europe's imports. Countries on Russia's periphery, many nearly completely dependent on Russian supply, pay exorbitant oil linked prices. Many are NATO allies.
Posted April 4, 2014
Opponents of Natural Gas Exports Have It All Wrong
WSJ MarketWatch (Furchtgott-Roth): Americans opposed to the export of U.S. natural gas give many reasons for their position. But almost all of them are wrong.
The problem is that people underestimate the amount of this country’s natural gas and the potential effect exports could have on the world market.
Russia has swallowed parts of Georgia and Ukraine. No one is proposing that America send soldiers to defend those countries, even though we guaranteed Ukraine’s sovereignty in 1994 under the Budapest Memorandum. Instead, we can help our allies by diminishing Russia’s economic power over them. And that power rests on oil and gas.