New York state regulators will recommend today that the use of hydraulic fracturing to drill for natural gas be allowed in much of the state, but will remain banned in areas that supply drinking water to New York City and Syracuse. The draft report by the state Department of Environmental Conservation must still be adopted by Gov. Andrew Cuomo and it is expected that he will. But the endorsement of the view that hydraulic fracturing can be done safely in New York, even within strict guidelines, is a victory for natural gas producers, shale oil producers and in the end the American People
While the media and political focus is on America’s vast oil resources in Alaska and the Gulf of Mexico, the real news is our shale oil reserves (yes oil,natural gas can also be extracted via the same process). Unfortunately, becoming Oil independent via domestic resources goes against the President’s energy policy (making petroleum based products prohibitively expensive so we all convert to “green fuels.” So the EPA is looking to find ways to declare the process which shale oil is extracted hydraulic fracturing, as dangerous to the environment.
First, hydraulic fracturing gave the United States a boom in shale gas that lowered natural gas prices by 54 percent between 2008 and 2009. Now, shale oil discoveries are being made that can substantially increase onshore oil production. The Bakken oil field located in western North Dakota, northeast Montana, and Canada’s Saskatchewan Province is pumping 225,000 barrels of oil a day today that started at just 3,000 barrels per day in 2005, with estimates of a million barrels of oil production per day by 2020. A newer shale oil field, Eagle Ford in Texas, is one of about 20 new onshore oil fields so far that combined could increase the oil output of the United States by 25 percent within 10 years. Those statistics, of course, assume that the U.S. government does not intervene in state regulation of hydraulic fracturing, and that it can continue to be used to stimulate the wells. Hydraulic fracturing requires water, sand, and a small amount of chemicals to break up the shale deposits to allow oil or natural gas to flow through horizontal drilling. But, while the government gave hydraulic fracturing a clean bill of health in 2004 and there has never been a documented case of ground water contamination owing to hydraulic fracturing, the Environmental Protection Agency, the Department of Interior and the Department of Energy – at the direction of President Obama – are all conducting studies on the issue.
The motivation for the studies is to find something wrong with the hydraulic fracturing process. After all, as the President said during his campaign that under his energy policy, “”energy prices would necessarily skyrocket”
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One of the major sites on the continental US is the Bakken Shale formation.
The U.S. Geological Survey estimated the mean undiscovered volumes of oil in Bakken Shale Formation of the Williston Basin Province in Montana and North Dakota at 3.65 billion barrels .Due to the Bakken oil field, proved reserves in North Dakota almost doubled from 573 million barrels in 2008 to 1,046 million barrels in 2009 according to the Energy Information Administration.
The exploitation of our own resources is not only a matter of becoming energy independent, its about putting Americans to work.
North Dakota State University estimates that the shale oil workforce in the state jumped from just over 5,000 in 2005 to over 18,000 in 2009 and estimates now have it at 30,000. If oil production reaches a million barrels a day, it could employ over 100,000 people. Due to this oil boom, unemployment in North Dakota fell to 3.8 percent — less than half the national rate of 9 percent- and the lowest unemployment rate in the United States.
Another area fertile will shale oil, are the Eagle Ford fields we reported on a few weeks ago:
A Texas field, known as the Eagle Ford, is one of about 20 onshore oil fields that could together increase the nation’s oil output by 25 percent within a decade. The Eagle Ford field is producing more than 100,000 barrels a day and could reach 420,000 by 2015, according to Bentek Energy. In Dimmit County, Texas, the unemployment rate has fallen to half, and sales tax receipts are up 70 percent.
It is estimated that these shale oil fields could create more than two million new jobs and that tens of billions of dollars could line the coffers of states where shale oil fields are located, including Texas, Oklahoma, Colorado, California, Ohio, Michigan and Kansas. According to IHS CERA, an energy research firm, shale and other “tight rock” fields currently producing about half a million barrels of oil a day could produce up to three million barrels a day by 2020. In 2011 alone, oil companies are investing an estimated $25 billion to drill 5,000 new oil wells in tight rock fields
Shale oil production makes sense as long as oil prices remain above $60 a barrel (as of today the price is over $94 dollars.
Some analysts predict that within 10 years, shale oil production could help reduce oil imports by more than half as long as other actions are also realized in increasing oil production in the Gulf of Mexico and in reducing oil demand. Significant finds in Alaska could accelerate this reduction in imports, as could unconventional sources of oil and byproducts of natural gas production. At oil prices around $90 per barrel, reducing imports could save the United States as much as $175 billion a year. Last year, when oil averaged $78 per barrel, the United States spent $260 billion for imported crude, more than half the country’s $500 billion trade deficit.
Not all the news is good, the environmental crazies have started an all out effort to prevent this step toward energy independence.
A national campaign against hydraulic fracturing has been announced by some groups, and it has come under attack by certain journalists, including one with the New York Times, which prompted the non-partisan Energy Information Administration to issue an extremely rare rebuttal to a story which mischaracterized their analysis of natural gas resources in the United States. Clearly, hydraulic fracturing, which is increasing our domestic oil and natural gas production, is under political attack.
Some environmentalists claim hydro fracturing pollutes drinking water even though industry experts say that it is unlikely because hydro fracturing is performed thousands of feet below the water table. Environmental Protection Agency administrator Lisa Jackson recently told Congress she knows of no proven examples of such water pollution.[vi] But, the EPA has launched “a comprehensive research study” on the possible “adverse impact that hydraulic fracturing may have on water quality and public health” nationwide.
There is no truth to the rumor that Jackson calls her new research study Operation Delay.
Here’s the bottom line, hydraulic fracturing could be a Godsend to the American Economy. It could reduce prices at the pump, reduce our dependence on foreign sources of oil and put thousands of unemployed Americans to work. Now that’s a stimulus plan that Americans can afford.
As Robert Bryce stated in his Wall Street Journal editorial, “A vibrant industrial base requires cheap, abundant and reliable sources of energy. The shale revolution now underway is the best news for North American energy since the discovery of the East Texas Field in 1930. We can’t afford to let fear of a proven technology stop the much-needed resurgence of American industry.”
And, as Michael Lind stated, “If gas hydrates as well as shale gas, tight oil, oil sands and other unconventional sources can be tapped at reasonable cost, then the global energy picture looks radically different than it did only a few years ago. Suddenly it appears that there may be enough accessible hydrocarbons to power industrial civilization for centuries, if not millennia, to come.”
Mr President are you listening?
Source of the research the Institute for Energy Research