Over and over again, we have posted about how opening up energy exploration and production in the US could have an immediate “shock” effect on the economy because hydrocarbon based energy touches all strata of the economy and does so all at once. Cheaper fuel leads to cheaper production costs of products, immediately has an impact on personal income and strengthens the balance sheet of all companies by lowering overall costs to do business. It also immediately increases employment in the E&P (exploration and production) and EPIC (engineering, procurement, installation and construction) sectors of the oil patch. Good, high paying jobs that could be created at the cost of a signature.
President Obama claims to be presiding over the greatest increase in hydrocarbon production EVAH – and to be fair, natural gas production is up substantially…but as Steve Maley at RedState points out, the boom is 1) on private land and 2) started well before The One took office (so I guess this is Bush’s fault as well, huh?):
Much of the ramp-up in production is in the shale gas plays: the Barnett of Texas, the Haynesville of Louisiana, the Woodford of Oklahoma, the Fayetteville of Arkansas, the Marcellus of Pennsylvania and West Virginia, the Eagleford of Texas. All of them are on private, not Federal lands, and under the jurisdiction of state, not Federal, regulatory bodies.
With all of these massive on-shore finds, what has happened to the price of natural gas? They have fallen to the lowest level in the past 10 years.
Mr. Supply…meet Miss Demand. What do you know, when supply exceeds demand, the market compensates by lowering price to encourage more consumption…and the government didn’t even have to spend a trillion or two of taxpayer’s money to make it happen.
The common refrain from government is that we only have 2% of the world’s oil reserves, so what do you expect a Lightworker to do, conjure up a miracle?
Except that isn’t quite true, now is it Mr. President? At least according to the GAO (via CNS News):
The Green River Formation, a largely vacant area of mostly federal land that covers the territory where Colorado, Utah and Wyoming come together, contains about as much recoverable oil as all the rest the world’s proven reserves combined, an auditor from the Government Accountability Office told Congress on Thursday.
The GAO testimony said that the federal government was in “a unique position to influence the development of oil shale” because the Green River deposits were mostly beneath federal land.
It also noted that developing the oil would have an environmental impact and pose “socioeconomic challenges,” that included bringing “a sizable influx of workers who along with their families put additional stress on local infrastructure” and “making planning for growth difficult for local governments.”
“The Green River Formation–an assemblage of over 1,000 feet of sedimentary rocks that lie beneath parts of Colorado, Utah, and Wyoming–contains the world’s largest deposits of oil shale,”Anu K. Mittal, the GAO’s director of natural resources and environment said in written testimony submitted to the House Science Subcommittee on Energy and Environment.
“USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions,” Mittal testified.
“The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered,” Mittal told the subcommittee. “At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves.”
We don’t need a miracle, we need a common sense energy policy.
I know that area well. Evanston, Wyoming sits directly on top of it. It is on the north slope of the Uinta Mountains (the only mountain range in the US that runs east and west), is about 60 miles from my adopted hometown of Park City, Utah to the west and 200 miles to Rawlins, Wyoming to the east, Sinclair Oil has a major refinery just east of Rawlins. There are three in Salt Lake: Tesoro, Big West Oil and Sinclair Oil all have operations there.
Point being, if we can get it out of the ground, the resources are there to refine it and get it to market quickly.
The question remains: will we have to political will to open up areas like the Green River formation, ANWR and other reserves that sit under government land?
Mitt Romney will.