Energy Tomorrow Blog
Posted June 21, 2013
U.S. Sen. Tim Kaine of Virginia, explaining in a Washington Post op-ed why a self-identified “pro-pipeline senator” opposes the Keystone XL pipeline:
As a former mayor of Richmond, a city with a gas utility, I think it makes no sense to be anti-pipeline. But I oppose the Keystone XL project. Although the president’s decision is technically over whether to allow a pipeline to deliver oil from Alberta to the coast of the Gulf of Mexico, the real issue isn’t the pipeline. It’s the wisdom of using tar sands oil. … By most accounts, oil from tar sands is 15 to 20 percent dirtier than conventional petroleum, and the process of extracting and refining it is more difficult and resource-intensive. With so many cleaner alternatives, there is no reason to embrace the use of a dirtier fuel source. Approving the pipeline would send a clear signal to the markets to expand the development of tar sands oil. Such an expansion would hurt our nation’s work to reduce carbon emissions. We have to make energy cleaner tomorrow than it is today. That’s why the president should block Keystone. … Tar sands oil is the opposite of an innovative, make-it-cleaner approach. It represents a major backslide.
Sen. Kaine is right on a number of energy issues – supporting more offshore drilling for oil and natural gas as well as more natural gas development from hydraulic fracturing – but on the Keystone XL he’s just wrong. Let’s take a closer look.
Posted June 18, 2013
Great question during the U.S. Energy Information Administration’s annual energy conference this week – paraphrasing: Given the technologies, the innovation and risk-taking that mark today’s oil and natural gas industry, what‘s the ceiling for oil and gas development over the next few decades? The U.S. Geological Survey’s Donald Gautier took a crack at it:
“Every time I look at world oil or gas resources, I start adding things up, and I end up with enormous numbers. It just seems like an unavoidable fact, and the issue is about human activities and the contraptions they’re using for getting this out. There is certainly no shortage of molecules out there.”
Posted June 10, 2013
House legislation requiring a new federal offshore leasing plan that includes areas off South Carolina and Virginia is the best way to create new access to federal oil and natural gas resources sooner rather than later. Later – much later – is likely under the current federal plan, which would keep lease sales from happening until 2017 at the earliest. Because of the time it takes to develop offshore resources, that means actual production wouldn’t occur until 2024 or even 2027.
Creating access to areas that currently are off-limits is critical to U. S. energy security, job creation and economic growth. Access leads to exploration, which results in the oil and natural gas development that’s vital to President Obama’s pledge to increase domestic production under his all-of-the-above energy strategy.
Posted June 5, 2013
Ernst & Young has a new study detailing $185.6 billion in total capital spending by oil and natural gas companies last year – the largest in the history of the firm’s oil and natural gas reserves study. Marcela Donadio of Ernst & Young:
The study of U.S. upstream (pre-refinery stage) capital spending by the 50 largest companies (based on 2012 end-of-year oil and natural gas reserve estimates) found a 20 percent increase compared to 2011. Ernst & Young said the increase was largely due to increased tight oil and liquids activity. That refers to development in tight-rock formations, made possible by hydraulic fracturing and horizontal drilling.
“The increased exploration and development spend we’re seeing in this year’s study speaks to the incredible opportunity unfolding in tight oil from shale formations and the high cost of developing these unconventional resources.”
Posted May 31, 2013
The U.S. Energy Information Administration has a new report that details the decline in sales of oil and natural gas from production on federal lands (2003-2012). Key points:
- Sales of crude oil from federal lands, onshore and offshore, decreased 5 percent in fiscal year 2012 (ended Sept. 30) to 596 million barrels from 629 million barrels in FY 2011. That includes an 8-percent decrease in offshore volumes, partially offset by an 8-percent increase in much smaller onshore volumes.
- Natural gas sales from federal lands decreased 7 percent in FY 2012 to 4,262 billion cubic feet (bcf) from 4,584 bcf in FY 2011. Offshore volumes were down 19 percent, while onshore was virtually unchanged.
- Sales of all fossil fuels produced on federal lands (also including coal and natural gas plant liquids) fell by 4 percent in FY 2012.
Posted May 23, 2013
Gasoline prices have been rising with the approach of the summer driving season – up to about $3.66, according to AAA – pushed there by rising crude oil prices. U.S. consumers need help. And they could get it – if the administration pursued a number of energy policies to put downward pressure on global crude costs, while abandoning other choices that could harm consumers.
API Chief Economist John Felmy’s reporter briefing Thursday focused attention on two paths: one that will increase domestic production of oil and natural gas and one that won’t. Unfortunately, the administration – via proposals to increase energy taxes and a new wave of questionable regulation – looks headed down the wrong path, a recipe for disaster for American energy:
Posted May 23, 2013
Posted May 17, 2013
Increasing U.S. domestic production of oil matters. Energy Information Administration (EIA) chief Adam Sieminski had this analysis at an energy conference earlier this week (h/t Breaking Energy):
“There’s a fairly significant, long-standing relationship between spare production capacity in OPEC and what the pricing environment is for oil. So the 2 million barrel per day increase in U.S. oil production that surprisingly took place over the last five years has resulted in higher OPEC spare capacity, and undoubtedly, has been a factor in why Brent oil prices are $103-$104/bbl rather than $125-$130/bbl.”
Posted April 26, 2013
Take a look at the map below, one we’ve used before to show the vastness of America’s offshore oil and natural gas reserves – the overwhelming majority of which (in red) that’s off-limits for development.
Posted April 16, 2013
A pair of noteworthy items point to the sustainability of America’s shale natural gas revolution – and also its added benefits.
First, the newest biennial report by the Potential Gas Committee (PGC) says the United States has a total future natural gas supply of 2,688 trillion cubic feet (tcf) as of the end of 2012, a significant increase from its 2010 year-end estimate. Details:
- 2,384 tcf in technically recoverable reserves, including 2,226 tcf from conventional sources, tight sands and carbonates and shales, plus 158 tcf in coalbed reserves. The overall future supply number is the sum of PGC’s technically recoverable figure and the Energy Department’s latest figure for proved reserves (dry gas).
- Compared to the year-end 2010 estimate, assessed resources increased by 28 percent.
- The assessment is the highest in PGC’s 48-year history.