January 2012, Vol. 239 No. 1
Editor's Notebook
Editor's Notebook: U.S. On Track To Be Oil Exporter
Let’s repeat that slowly so there’s no misunderstanding: “U.S. On Track To Be Oil Exporter.”
This was the headline of a report in the Dec. 19 issue of USA Today. According to the article, during the first quarters of 2011, we exported more oil than we imported. This means it’s highly likely that 2011 will be the first time in more than six decades that the United States will be a net exporter of petroleum products, the report said.
“Analysts and scientists who study oil production say the trend is accelerating. An energy expert cited by USA Today predicts that the United States’ own production could rise to 2.9 billion barrels annually by the end of the decade.”
In fact, the report states that domestic production of crude oil has been climbing for the past three years, and crude imports have fallen by 10% in five years. In 2010, the U.S. imported just under half of the oil it used, and less of it from the Middle East.
More of the oil imports come from closer sources, primarily Canada. In 2010, nearly half came from the Western Hemisphere. In the future, scientists predict that growing production in Brazil will also change the dynamic and reduce the amount of oil the U.S. imports from the Middle East, the report said.
One would think this would be thrilling news for some very obvious reasons: less dependence on the volatile Middle East; less costly transportation for those who need to drive to or for work; lower 0fuel costs for homeowners; and a guaranteed supply of product for energy-intensive industries. And did I mention more jobs? Bottom line is that a healthy economy runs on cheap, available energy – the more, the better.
Of course, if we could harness wind or the powers of the sun and ultimately build that magical fuel cell, we wouldn’t need to use fossil fuels.
Here is the bad news: those whose cause is to oppose oil and gas development will now stop at nothing to block every attempt to develop our oil and gas resources. As we are witnessing, they are pulling out all stops to block the Keystone XL Pipeline, but this is just the tip of the proverbial iceberg. No matter what revisions are made, they will fight it because they have no other cause.
They have tried to block reopening the Gulf of Mexico to drilling; they are fighting efforts to develop shale plays even in economically depressed regions of the country. They do this by spreading fear and innuendo. The higher they can help drive the price of oil and gas means more money for unproven and unreliable alternatives. That is more important to them than the impact on the nation’s economy. They would be delighted by $10 a gallon gasoline.
Recently I saw an article about the Utica trend in Ohio which may be the next huge shale play. Indeed, Chesapeake Energy CEO Aubrey McClendon suggests it might be the “biggest thing economically to hit Ohio, since maybe the plow.”
I e-mailed the article to Jim Roma, an old high school pal who is now a minister in Akron. This is what he said:
“I am vice-chair of the Northeast Ohio District of my denomination. We have 59 congregations under our umbrella. We own 178 acres of land where we hold our special services in the tabernacle and there is camping, etc. We negotiated with Chesapeake and received a check for $389,000 for the lease rights and an agreement of 17% on the gross for any production later, should they choose to even drill.
“We desperately needed the money as the EPA had come in and told us that if we didn’t upgrade the sewer system at a cost of almost $200,000, they would shut the campgrounds down. We prayed and then this opportunity happened.”
This is what I want people to know about the oil and gas industry.
Comments