Energy Tomorrow Blog
Posted December 10, 2014
Reuters: A surge of oil and gas production will drive the U.S.economy 1 percent higher in 2040 than it would have otherwise grown, and energy exports will only stoke the expansion, an independent study on energy policy concluded on Tuesday.
New drilling technologies such as 'fracking' have unlocked an abundance of fossil fuels from shale deposits and the bounty will both jolt the economy and increase tax receipts, according to the study from the Congressional Budget Office.
Officials estimate "real (inflation-adjusted) GDP product will be about two-thirds of 1 percent higher in 2020 and about 1 percent higher in 2040 than it would have been without the development of shale resources," the report finds.
Posted December 5, 2014
Speaking to business executives earlier this week, President Obama lamented how long it takes to make infrastructure improvements in the U.S.:
“The challenge for infrastructure has been that … it’s hard to pay for things if you don’t have some sort of revenue stream. And I’ve been exploring … to see how we can do more in attracting private investment into infrastructure construction – which is done fairly effectively in a lot of other countries …”
Later, he praised the Chinese for how quickly they tackle infrastructure needs:
“… the one thing I will say is that if they need to build some stuff, they can build it. And over time, that wears away our advantage competitively. It’s embarrassing – you drive down the roads, and you look at what they’re able to do.”
For more than six years one of the largest infrastructure projects to come along in some time has been staring back at President Obama, waiting for him to say “go”: the Keystone XL pipeline.
By now many Americans – who favor Keystone XL’s construction by more than a 3-to-1 margin – probably can tick off the points arguing for the project’s approval.
Posted December 2, 2014
U.S. News (Lamont Colucci): OPEC met on Nov. 27, and openly recognized that the United States' oil technological revolution – driven by enhanced oil recovery methods including hydraulic fracturing (known as fracking) and horizontal drilling – has undermined the cartel's economic and political power. This constitutes one of the major geopolitical and economic shifts of the 21st century in America’s favor. This meeting has been characterized as OPEC abandoning its role as a “swing producer” or simply the arbiter of oil supply and demand. Some are now suggesting that the new swing producer will be the United States.
Enhanced oil recovery technology was consistently denigrated as unworkable and unprofitable, and there will be many more articles restating this as the old wine in a new bottle. These technologies have made the U.S. the world's number one oil producer, surpassing Saudi Arabia and Russia. OPEC’s strategy of allowing the market to decide oil prices is designed to hurt American enhanced oil recovery activities, with the assumption that American producers need a higher profit margin per barrel than it does. This may be a horrible miscalculation on OPEC's part due to continual advances in technology and innovation.
According to a 2013 report, hydraulic fracking and horizontal drilling have the potential to increase the global reserve of oil from 1.6 billion barrels to 10.2 billion barrels. Domestically, we are already witnessing the 21st century oil boom generate prosperity for states like Colorado, Oklahoma, North Dakota, Texas, West Virginia and Wyoming. Current estimates indicate that by 2020 the United States will be the dominant worldwide producer of both natural gas and oil and achieve energy independence.
However, this energy issue has been dominated by the wrong people: economists, businessmen, engineers and environmentalists. They all have their required expertise, but all of this is really an issue of foreign policy and national security. There are four ways that this new situation can be welcomed by conservatives, liberals, realists and environmentalists.
Posted November 26, 2014
EIA Today in Energy Blog: U.S. retail regular-grade gasoline prices continue to decline, averaging $2.82 per gallon (gal) as of November 24. This average is 47 cents lower than a year ago, and the lowest price heading into a Thanksgiving holiday since 2009.
Traditionally, the Thanksgiving holiday is one of the most traveled times of the year in the United States, and much of that travel is by car. AAA estimates that during this Thanksgiving holiday weekend (November 26-30), 41.3 million people in the United States will travel more than 50 miles from home by car. This level of travel, 4.3% higher than the same time last year, is the highest number of travelers by car for Thanksgiving in seven years and the third highest since AAA began publishing the data in 2000.
Posted November 21, 2014
USA Today (Manhattan Institute’s Mark Mills): When the newly elected Congress convenes in January, energy will be a priority. In fact energy is the "foundation" action item according to the just-released roadmap from Speaker of the House John Boehner. So this is a particularly good time to map out just how different the energy world is today, and will be in the future.
Four decades ago, when America's extant energy policy paradigm was forged, the U.S. was the world's fastest growing major energy user in an environment of resource dependency and depletion. The facts have since flipped: America is now the fastest growing energy producer, while nearly all net new demand takes place elsewhere.
In this context, consider the implications for America, and the world, of five key numbers.
Posted November 18, 2014
Posted November 14, 2014
Friday’s bipartisan U.S. House vote to advance the Keystone XL pipeline, the ninth time the House has voted to support the project, sets up next week’s expected vote in the Senate – and most likely a big decision point for President Obama. API President and CEO Jack Gerard:
“The strong, bipartisan support for the Keystone XL pipeline demonstrates lawmakers from both parties in the House, as well as the Senate, are listening to the American people. A vote for KXL tells Americans their jobs matter, their futures matter and that our nation’s energy and national security are a clear priority.”
Now the question: Is President Obama listening?
Posted November 14, 2014
The Fix (Washington Post): President Obama is fond of telling Congress that it should pass things with the overwhelming support of the American people, including (among other things) comprehensive immigration reform, increasing the minimum wage, and increasing gun background checks.
And yet, Obama could soon be in a position of vetoing something with a similar amount of support: the Keystone XL pipeline.
Poll after poll has shown support for Keystone is somewhere between very strong and overwhelming. A Pew Research Center survey this month showed support for the project at nearly two-to-one, 59 percent to 31 percent. And that was about the lowest level of support we've seen to date. Support has registered as high as two-thirds of Americans.
Posted November 13, 2014
Bipartisanship was the unifying theme from lawmakers and panelists during an event on the intersection of energy and policy earlier today, hosted by The Hill. With the midterm elections over, it’s clear “energy ultimately prevailed,” API President and CEO Jack Gerard said, starting the discussion of what the future holds for energy in the next Congress. Gerard:
“Energy should not be a partisan issue, and while the election played out in a Republican/Democrat-type dynamic, ultimately we believe energy prevailed. Energy was a key issue in a lot of races across the country and it’s clear the American public is growing in their support of energy, especially oil and natural gas.”
Indeed, the U.S. – and the 114th Congress -- has a unique energy opportunity. When looking back even just five or six years ago, no one predicted America’s energy revolution after decades of energy scarcity. Fast-forward to today: We live in an era of rich abundance and ample oil and natural gas resources. America is now in a position to become the world’s energy superpower thanks to industry technology and innovation.
Posted November 11, 2014
America’s trading relationship with Canada is key to U.S. energy security but also to the U.S. economy, as discussed in this recent post.
Some numbers from the International Trade Administration (ITA) help make a couple of finer points. First, while the United States imports more crude oil from Canada than any other country, our goods exports to Canada supported nearly 1.3 million jobs here in 2013 – and that number is on the rise. Second, U.S. oil and natural gas sector goods exports account for more than half of the growth in overall jobs supported by goods exports to Canada from 2010 to 2013 – and that number also is increasing.