[Note: I posted this piece at Forbes.com on April 22, 2013, but it remains relevant today.]
Today is Earth Day, and it is very likely that the fact that abundant fossil fuels like oil, natural gas and coal, are natural resources, and gifts to humanity from Mother Earth herself will be lost amid all the frightful doom and gloom predictions that will be launched by environmental activists and repeated by various media outlets.
All the vitriol thrown at these fossil fuels by the environmental community notwithstanding, it is a simple fact that our prosperous, modern, energy-hungry society was made possible by the existence of these fuels. Without the discovery of and ability to produce fossil fuels, it is likely that mankind would still be mired in a Medieval form of existence, reliant on burning wood for heat, horses for transportation, and still living largely in the dark after nightfall.
But what about wind, solar and nuclear? The production of modern wind turbines, solar panels and nuclear power plants are extremely energy-intensive enterprises, and are by and large powered by the burning of fossil fuels. In other words, without the massive energy levels generated by the fossil fuel chicken, the “green” energy eggs would not have been possible.
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If you want to keep current on what’s happening in oil and gas in Texas, the “Inside the Oil Patch” program airs every Sunday evening on AM 740 KTRH in Houston, and AM 550 KTSA in San Antonio. The show is sponsored by Shale Magazine, for which I am an associate editor. I do a ten minute segment on most of the shows. The hosts, Kym Bolado and Alvin Bailey, do a great job of putting together high quality guests and very informative shows.
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Hey, guess what? There’s a bunch of natural gas out there along the Texas and Louisiana Gulf Coast!
That’s what the US Geological Survey (USGS) announced on April 13, with its assessment that the combined Haynesville and Bossier shales, sandstones and carbonates contain a gigantic volume of natural gas, which the USGS estimates at a total of 304 trillion cubic feet (tcf) in place. That represents enough natural gas to supply country’s entire demand for natural gas for about 12 years, just from two formations, and it represents a 330% increase over the agency’s 2010 resource estimate.
As USGS noted, the formations also contain a very large volume of oil and natural gas liquids:
The Bossier and Haynesville Formations of the onshore and State waters portion of the U.S. Gulf Coast contain estimated means of 4.0 billion barrels of oil, 304.4 trillion cubic feet of natural gas, and 1.9 billion barrels of natural gas liquids, according to updated assessments by the U.S. Geological Survey. These estimates, the largest continuous natural gas assessment USGS has yet conducted, include petroleum in both conventional and continuous accumulations, and consist of undiscovered, technically recoverable resources.
The updated estimate is a part of an ongoing USGS program to re-visit many of the largest oil and gas producing basins in the country, in order to create a more accurate picture of the resource available for the nation’s use as we move into the future. The agency previously released an updated estimate of oil contained in the Wolfcamp formation in the Permian Basin, which I analyzed last November. This is an important exercise designed to better inform public policy decisions related to energy, especially given the amount of ridiculous mis-information that gets into the media every day, such as the always-present but never correct “peak oil” and “peak gas” theories.
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In this edition of The Heartland Daily Podcast, Forbes columnist David Blackmon joins research fellow Isaac Orr to discuss how the environmental echo chamber distorts the facts of pipelines for their own financial gain.
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A couple of weeks back I wrote about the shifting focus of anti-fossil fuel conflict groups in their efforts to impede the nation’s energy development in various parts of the country. That focus, which since about 2008 had centered on the boogeyman “fracking”, has now shifted to a new, midstream boogeyman in the form of pipelines.
That previous piece focused on an incident involving a natural gas pipeline leak in Alaska’s Cook Inlet, which is operated by Hilcorp, and the manner in which Hilcorp’s efforts to coordinate with regulators to address the issue were distorted by one of those web-based media groups, EcoWatch. Repairs to that pipeline are underway, with no discernible impacts to surrounding wildlife or the environment, but it placed Hilcorp on these groups’ radar as a target for exploitation.
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Some thoughts on the domestic oil and gas situation as we move into April…
The rigs just keep on coming…: The industry activated more than 70 additional drilling rigs during the month of March, bringing the total new rigs activated during the first quarter of 2017 to more than 200. My “bold” prediction as the year began was that it would take four months, not three, for the U.S. industry to bring that number of new rigs onto the market. So, ok, I was too timid.
Interestingly, more than a dozen of these newly-active rigs have moved into the Haynesville Shale region, which is experiencing a somewhat surprising resurgence of activity, even in the seemingly interminable weak price market for natural gas. The play’s abundance of pipeline takeaway capacity and proximity to major export facilities are two of the main reasons for this uptick in activity, as detailed by Forbes contributor Jude Clemente in his piece of March 25.
March’s increase in rigs drilling for oil was also less focused on the Permian Basin than in prior recent months, with other basins like the Eagle Ford, the SCOOP/STACK and the DJ Basin also seeing significant upticks in activity. How much longer this rising rig count can last is anyone’s guess, but it was a major reason why…
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An interesting facet of the news media’s coverage the past couple of days about President Trump’s Executive Order on Promoting Energy Independence and Economic Growth (hereinafter referred to as “Order”) is that the coverage focused mostly or entirely on the Order’s impacts on the U.S. coal industry and coal-related jobs. Granted, the Order was cast as the President’s effort to essentially rescind major parts of former President Obama’s “Clean Power Plan”, which most recognize was an effort by his Administration to damage the nation’s coal industry. But just as the “Clean Power Plan” had impacts and produced major regulatory efforts that reached far beyond the coal industry, President Trump’s newest executive order also impacts other segments of the nation’s energy sector.
Here is a review of several of them:
- Section 2 of the Order directs all relevant agencies to “review all existing regulations, orders, guidance documents, policies, and any other similar agency actions (collectively, agency actions) that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources.” This is a very broad-ranging mandate that, when combined with other aspects of the Order, is likely to create a vast array of proposed regulatory rescissions and reforms.
Hope I didn’t say anything too stupid…
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