Energy Tomorrow Blog
Posted October 15, 2014
Natural gas production in the Marcellus Shale continues to surge – and with it, industry spending on construction and maintenance, according to a new study.
The latest drilling productivity report from the U.S. Energy Information Administration (EIA) projects Marcellus natural gas output will hit 15,828 million cubic feet per day (mcf/d) or about 37.1 percent of production from the major U.S. shale plays. EIA expects Marcellus output will top 16,000 mcf/d in November.
The production gains are reflected in industry spending on workers in construction and maintenance from 2008 to 2014 – the subject of the new study by the Oil and Natural Gas Industry Labor-Management Committee. The study showed spending grew more than 60 percent between 2012 and 2013, reaching $5 billion, resulting in a 40 percent increase in jobs in eight trades (union and non-union members included). Another $6.5 billion already is committed for 2014, the study reports.
Posted October 14, 2014
A new study by the Aspen Institute joins a series of analyses concluding that one benefit from exporting U.S. crude oil would be lower gasoline prices here at home. Aspen’s projected reduction of between 3 and 9 cents per gallon parallels findings in previous major studies by ICF International (3.8 cents per gallon), IHS (8 cents) and Brookings/NERA (7 to 12 cents) that exports would lower pump prices.
Aspen and the other studies project other benefits from exporting crude oil, including broad job creation, economic growth and increased domestic energy production. Yet the solidifying consensus that consumers also would benefit is critically important as the public policy debate on oil exports continues.
Posted October 3, 2014
Here’s the president, lauding the lift America’s domestic energy revolution has provided the nation’s economy in a speech this week in Illinois:
“The first cornerstone is new investments in the energy and technologies that make America a magnet for good, middle-class jobs. So right off the bat, as soon as I came into office, we upped our investments in American energy to reduce our dependence on foreign oil and strengthen our own energy security. And today, the number-one oil and gas producer in the world is no longer Russia or Saudi Arabia. It’s America. For the first time in nearly two decades, we now produce more oil than we buy from other countries. We’re advancing so fast in this area that two years ago I set a goal to cut our oil imports by half by – in half by 2020, and we’ve actually – we will meet that goal this year, six years ahead of schedule.”
It’s good to hear the president talking about the benefits to America of resurgent oil and natural gas production here at home. He’s right: The United States is the world’s No. 1 producer of natural gas and is poised to be No. 1 in oil production. He’s also right that this domestic output has cut imports significantly, putting America on a path to zero net imports in the foreseeable future – a good bench mark for something everyone wants: genuine U.S. energy security.
Now let’s talk plainly.
These energy developments and their benefits have occurred without much help from this White House. They’ve happened even as the president’s actions and those of his administration have fallen well short of his “all-of-the-above” rhetoric on energy.
Posted September 15, 2014
It’s one thing to talk about energizing the U.S. economy, it’s another to walk the talk. America’s oil and natural gas industry is doing that, with four companies ranked in the top 10 of the Progressive Policy Institute’s list of leaders in U.S. capital spending in 2013.
ExxonMobil ($11.07 billion), Chevron ($10.56 billion), ConocoPhillips ($6.35 billion) and Occidental Petroleum ($5.5 billion) ranked in the top 10 in U.S. capital spending – expenditures for plants, property and equipment. Also significant: The same four are in the top 10 of cumulative U.S. capital spending over the three years (2011-2013) PPI has compiled its “investment heroes” list.
Posted July 22, 2014
Interesting question: Might climate change laws and regulations negatively impact the value of oil reserves held by energy companies, to the point of “stranding” them, ultimately affecting shareholders? Two companies, ExxonMobil and Shell, essentially have told their shareholders, no – because projected increases in global energy demand will continue to require all viable energy sources, including oil and natural gas, into the foreseeable future. From ExxonMobil’s report to shareholders:
For several years, our Outlook for Energy has explicitly accounted for the prospect of policies regulating greenhouse gas emissions (GHG). This factor, among many others, has informed investments decisions that have led ExxonMobil to become the leading producer of cleaner-burning natural gas in the United States, for example. Based on this analysis, we are confident that none of our hydrocarbon reserves are now or will become “stranded.” We believe producing these assets is essential to meeting growing energy demand worldwide, and in preventing consumers – especially those in the least developed and most vulnerable economies – from themselves becoming stranded in the global pursuit of higher living standards and greater economic opportunity.
Posted June 4, 2014
If you run a business that sells things produced from raw materials – manufacturers, retailers, wholesale distributors and car and equipment dealers and other industries – chances are good you’re familiar with “LIFO” accounting. The IRS first approved the “last-in, first-out” method for use by taxpayers with inventories in the 1930s. Repealing LIFO, as some in Congress are proposing, could impact the more than 30 percent of U.S. companies, large and small, that use it, as well as the larger economy.
That’s the message a bipartisan group of 113 U.S. House members conveyed in a recent letter to Ways & Means Committee Chairman Dave Camp, who has proposed LIFO repeal as part of his larger tax reform package.
Posted May 2, 2014
The number of direct jobs in oil and natural gas extraction has grown 7.2 percent since April last year, more than four times the growth rate in all U.S. jobs, according to BLS. The word for that kind of growth – in the midst of an economy still trying to heat up – is wow!
Now, keep in mind that the BLS data line for “oil and gas extraction” covers only part of industry’s upstream (pre-refining) segment. Scroll down a few lines in this BLS table to find direct jobs supporting oil and natural gas operations – such as building and dismantling field rigs, core drilling services, hydraulic fracturing services and much more – and you see dynamic growth there as well, 6.3 percent from April last year through March, the most recent data month available. Wow again.
Posted March 18, 2014
A few of the new good-news stories resulting from America’s oil and natural gas revolution:
Investing in Ohio Production …
The state’s geologist says Utica shale development has triggered $20 billion to $24 billion in spending investments and more will come, reports the Akron Beacon Journal’s online edition. The newspaper cites an unreleased report by Ohio state geologist Mike McCormac that says drilling companies have spent about $6 billion on drilling plus approximately $2 billion on leases. Investments in processing plants and pipelines are estimated at $12 billion to $16 billion.
Posted March 12, 2014
In a post last week we discussed the way the Ukrainian crisis is focusing a number of U.S. leaders on the potential foreign policy impacts of surging U.S. energy production. With its vast natural gas reserves, the U.S. could be a leader in the global market for liquefied natural gas (LNG), if we took the steps to make that happen – starting with government approval of permits to build LNG export terminals.
Unfortunately, that process is slow. Although the Energy Department has approved six applications since 2011, more than 20 still are pending. And the U.S. isn’t the only country eyeing the global LNG market. More than 60 non-U.S. LNG export projects are planned or under construction. In a number of ways, it’s a race to the rewards stemming from natural gas abundance.
Posted November 26, 2013
Here’s wishing everyone a happy Thanksgiving while offering a few of the reasons we can all feel blessed because of America’s energy present and future – which the men and women of the oil and natural gas industry help deliver.
Let’s start with the fact America is enjoying a renaissance in home-grown energy production, thanks to advances in technologies and techniques, such as hydraulic fracturing and horizontal drilling. Last month these played a big role in helping domestic oil output to exceed imports for the first time since 1995. Because of fracking and other technologies, more of America’s vast oiland natural gas reserves can be developed to generate fuels that provide about 62 percent of the energy Americans currently use. That’s energy that makes our lives possible – that will power our lifestyles and economy in the future, according to government projections.