Energy Tomorrow Blog
Posted October 16, 2014
Early in a panel discussion of energy policy and politics hosted by Real Clear Politics, the question was asked whether U.S. voters pay much attention to energy issues in an election year. RCP tweeted panelist/Wall Street Journal energy reporter Amy Harder’s response - that voters only notice energy when the prices are high.
Certainly, that’s generally been an accurate analysis. Less than a decade ago energy issues were challenging for U.S. policymakers staring at flat or declining domestic oil and natural gas production
But the U.S. energy picture has been dramatically altered by surging production here at home – an energy revolution made possible by advanced hydraulic fracturing and horizontal drilling and vast resources in shale and other tight-rock formations. Result: Good news in the absence of challenging energy developments – for U.S. consumers (if not for hosts of events on the intersection of energy and politics).
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 10, 2014
A new University of Colorado study affirms the dynamic and critical role energy development is playing in the state – in terms of support for public schools, job creation and the economy.
Just looking at 2012, oil and natural gas activity generated more than $200 million for Colorado schools, supported nearly 94,000 jobs in the state and created more than $23 million in state economic activity, according to the report conducted by the university’s Leeds School of Business and commissioned by API.
Posted October 10, 2014
The U.S. Energy Information Administration (EIA) has another report on oil imports that underscores the incredible sea change in America’s energy picture – due to increased domestic production of oil and natural gas. EIA says net imports of energy as a share of energy consumption fell their lowest level in 29 years for the first six months of 2014.
This is a snapshot of America’s energy revolution – the fundamental shift from energy scarcity to abundance that would have been unthinkable less than a decade ago. The shift is the result of surging oil and natural gas production using advanced hydraulic fracturing and horizontal drilling, harnessing oil and gas reserves in shale and other tight-rock formations. Safe, responsible energy development has made the United States the world’s No. 1 natural gas producer, and the U.S. could become the world’s top producer of crude oil related liquids before the year is out, the International Energy Agency reports (h/t Financial Times.com).
Posted October 6, 2014
We’ve posted a number of times on the merits of U.S. energy exports, because whether the subject is exporting crude oil or natural gas, there are compelling economic and energy reasons to lift restrictions on America’s ability to be a major player in global markets. While those restrictions remain, America and Americans lose.
A number of studies have said that energy exports will benefit our economy and stimulate more domestic production – here, here and here on liquefied natural gas (LNG) and here and here on crude oil. A new report from Columbia University’s Center for Global Energy Policy added that LNG exports could help strengthen the United States’ foreign policy hand.
Thanks to abundant oil and natural gas reserves, advanced hydraulic fracturing and horizontal drilling and investments by a robust industry sector, the U.S. is the world’s No. 1 producer of natural gas and is about to become No. 1 in oil output (subscription required). Yet, because of self-imposed and outdated (in the case of the crude oil) export restrictions, the U.S. isn’t harnessing its energy potential as it could and should.
Posted October 1, 2014
Earlier this month Oilprice.com’s Nick Cunningham wrote this piece explaining that the debate over exporting U.S. liquefied natural gas (LNG) has been won – citing the openness of the Obama administration and leading Democrats to exports. Cunningham writes:
In fact the Obama administration and Congressional Democrats have received little blowback for the LNG projects that have received approval. And with tacit or overt support from Democrats, the LNG issue has largely been won by export supporters.
Still, some export opponents try to gain traction despite the findings of a number of studies (NERA, ICF, Brookings) that project broad economic benefits to the United States from LNG exports, with minimal effect on domestic prices. Earlier this year NERA updated its 2012 study:
LNG exports provide net economic benefits in all the scenarios investigated, and the greater the level of exports, the greater the benefits. The market for LNG exports is self-limiting, in that little or no natural gas will be exported if the price of natural gas in the US increases much above current expectations. High levels of exports can be expected only if natural gas is plentiful and inexpensive enough to produce so that prices remain below current levels, even with high levels of exports. (Emphasis added)
The issue of domestic prices is important because export opponents have been using an apples-to-oranges argument trying to scare up unfounded concern about the domestic effects of exports, citing conditions in Australia’s natural gas market.
Posted September 10, 2014
A new report from Brookings’ Energy Security Initiative adds more scholarly weight to the analytical case for lifting America’s decades-old ban on crude oil exports. Echoing earlier studies by IHS and ICF International, the Brookings research finds that allowing the export of domestic crude would stimulate more oil production here at home, provide broad economic benefits and strengthen U.S. energy security. Brookings:
… we believe that the U.S. should allow the market to determine where crude oil will go and move immediately to lift the ban on all crude oil exports. … After 40 years of perceived oil scarcity, the United States is in a position to help maximize its own energy and economic security by applying the same principles to free trade in energy that it applies to other goods. By lifting the ban on crude oil exports, the United States also will help mitigate oil price volatility while alleviating the negative impacts of future global oil supply disruptions.
Posted September 9, 2014
One way to measure the positive impact of America’s oil and natural gas industry is the 9.8 million jobs it supports nationally, accounting for 5.6 percent of total U.S. employment. Another way to look at our industry’s economic breadth is the size and diversity of supporting businesses, reaching into every state in the union and the District of Columbia.
That’s what you see in a new vendor supply survey unveiled this week, listing 30,000 operators, contractors, service companies, suppliers and other vendors that support oil and natural gas operations. Even if there isn’t an oil or natural gas well site near where you live, chances are good a business that supports the oil and natural gas industry is.
Posted September 8, 2014
A final word on a recent op-ed attack on hydraulic fracturing by a Natural Resources Defense Council policy analyst – an especially glaring example of the way the anti-fracking crowd often kicks the facts to the curb while trying to undermine public support for safe, responsible drilling, the No. 1 reason for America’s energy revolution.
Quick review. We’ve already shown that federal and state regulatory regimes – with industry standards – are protecting the environment, drinking water supplies and communities. We’ve detailed how horizontal drilling has been around for decades, that advanced fracking is safe and beneficial, and that the resulting surge in natural gas production and use is largely responsible for reducing U.S. energy-related carbon dioxide emissions to their lowest level since 1994.
Now let’s talk jobs – one of our favorite subjects because the oil and natural gas industry supports 9.8 million of them, or about 5.6 percent of total employment in this country.
Posted September 3, 2014
Following up on last week’s rebuttal of a truth-challenged attack on hydraulic fracturing in a USA Today op-ed, in which we detail how federal and state regulation, combined with industry standards are protecting the environment, water supplies and communities.
The op-ed by the Natural Resources Defense Council’s Amy Mall opens by posing a false choice for Americans: economic and energy security from development using fracking or safety. It continues:
… a controversial new extraction technology known as "fracking" — combined with unprecedented exemptions for the industry from bedrock federal environmental and public health laws — has fueled a recent explosion in domestic oil and gas development. And safeguards have not kept pace.
Fracking isn’t new. Earlier this year the U.S. marked the 65th anniversary of the first commercial use of hydraulic fracturing. Fracking pre-dates McDonald’s, diet soft drinks, credit cards and more – even Barbie. It’s a fact, and saying otherwise is dishonest.