US Oil Production Ramps Up and Up

US oil production continues to climb, introducing an odd shape to the traditional "peak oil graph" that has long been touted by energy doomers.

USEIA

These continuing increases in crude oil production are having profound effects on U.S. petroleum balances. A large portion of tight oil production consists of light, sweet crude oil. As previously noted by EIA, growing production has led to reduced imports of light, sweet crude oil on the U.S. Gulf Coast, the leading U.S. refining center. Without sufficient pipeline capacity to move all of the growing midcontinent production to the Gulf Coast, prices of these crudes, such as West Texas Intermediate (WTI), have declined compared to coastal grades such as Louisiana Light Sweet (LLS), reflecting the increased cost of moving the crude using marginal modes of transportation such as rail, barge, and truck. _USEIA

Until the US can reinstate rational energy policy -- including the necessary new pipeline infrastructure -- expect big windfall dividends for rail, barge, and tanker truck transportation.

Real Clear Energy

The graph at left shows how production has risen dramatically over the last decade from zero to almost 900,000 barrels a day, even though only two major reservoirs have been developed. The trend line splits the nine major fields by color coding. The Bakken – the cream-colored portion – has been by far the most productive, but the Eagle Ford in Texas is now starting to show results as well. The other seven fields have not yet entered full-scale production.

Most of the fields, but not all, are located on the map at the right. The Granite Wash is in western Oklahoma and Spring is in West Texas. The Monterey Shale, in central California, is believed to be the largest reservoir in North American, with four times the potential as the Bakken. (Why does California always get the best of everything?) The Woodford is not on this map but is beneath eastern Oklahoma, Texas and Arkansas. The Niobrara is at the juncture of Nebraska, Wyoming and Colorado. The Spraberry, also not shown, is in West Texas (which usually managed to be more productive than California). And the Austin Chalk, of course, is around Austin.

This vast potential of tight oil is the reason why the International Energy Agency and others are talking about the US achieving energy independence and even becoming an exporter by 2030. If the fields at the bottom of the graph begin to develop at anything like the rate of the Bakken and the Eagle Ford, the US is going to have a lot of oil. _RealClearEnergy

With increased production for both onshore and offshore US fields, the near to intermediate term outlook for US oil production is positive. As long as US pipeline infrastructure is underdeveloped, US oil prices will remain lower than international prices, with a concomitant energy dividend to US industries and the US economy.

The Obama administration has attempted to mandate green energy, and has carried out de facto wars against coal, nuclear, and offshore oil. The main reason that onshore tight oil production has thrived so quickly and thoroughly, is that it caught the Obama administration by surprise, before it could be suppressed.

As US oil & gas production continues to climb, expect rising environmental opposition -- at least some of it financed by overseas interests. Always follow the money, in business, politics, and in the faux environmental industrial complex.

Monterey Shale Rivals Earlier Shale Giants

Monterey Shale

California's Monterey Shale deposits may contain more oil than North Dakota's Bakken and Texas' Eagle Ford -- two giant US shale deposits that have just begun to change the face of global oil production.

California's energy problem sits in Sacramento, in the form of a lefty-Luddite green dieoff.orgiast state government / faux environmental industrial complex. Sacramento is the enemy of California's energy future.

Running from Los Angeles to San Francisco, California's Monterey Shale is thought to contain more oil than North Dakota's Bakken and Texas's Eagle Ford -- both scenes of an oil boom that's created thousands of jobs and boosted U.S. oil production to the highest rate in over a decade.

In fact, the Monterey is thought to hold over 400 billion barrels of oil, according to the U.S. Geological Survey. That's nearly half the conventional oil in all of Saudi Arabia. The United States consumes about 19 million barrels of oil a day...

Several oil companies have put together research teams to work on the Monterey, said Katie Potter, head of exploration and production staffing at NES Global Talent, a company that recruits oil industry professionals.

If the Monterey takes off, Potter said the impact on jobs in the state would be huge, saying the shale boom has already created 600,000 jobs nationwide over the last few years.

... _CNN

Governor Jerry Brown along with the Sierra Club, would like to stop California's energy boom before it can begin. But they are making many enemies among the grass roots by doing so, and if they cannot find a way to compromise their faux environmental dogma for the sake of California's fiscal health, there will be a reckoning.

US Fracking Boom Sends Peak Oil Believers into the Denial Zone

US states such as Texas, North Dakota, Ohio, Pennsylvania, Louisiana, and more are taking advantage of a huge economic boost coming from the US fracking boom.

One of the biggest secondary economic effects of this fracking boom is the growth in US manufacturing directly related to the relatively low US gas & oil costs.

"Low natural gas prices provide an additional competitive advantage to US producers in many industries, including chemicals, steel, copper, aluminum, cement, and other energy-intensive industries," FitchRatings states. _Platts

For their part, true believers in peak oil doom have descended into full fledged denial mode. Many of the doomers are bravely declaring that US tight oil & gas are mere "flashes in the pan," and will play out entirely "any day now."

The reality is saying something much different, with US natural gas prices falling roughly 30% between 2011 and 2012. Prices of crucial commodities do not fall that drastically in the face of an obvious and impending supply shortfall.

But resource scarcity doomers have never been known for their skill at reading price signals, or other important indicators. In their world, it is all about the circular jerkular belief reinforcement, boosted by the echo acoustics of the choral chambres.

...natural gas spot price fell 31% last year. This drop in natural gas price may be a major reason why our economy has been performing better than many expected. The EIA reported that average wholesale prices for natural gas fell significantly throughout the United States in 2012 compared to 2011. The average wholesale price for natural gas at Henry Hub in Erath, Louisiana, a key benchmark location for pricing throughout the United States, fell from an average $4.02 per million British thermal units (MMBtu) in 2011, to $2.77 per MMBtu in 2012. This was the lowest average annual price at Henry Hub since 1999. Of course today the markets focus will be on the reports. Buckle up!

The American Petroleum Institute reported whopping builds in products and not as much as I expected on crude. The API reported crude stocks up by 2.4 MLN BBLS The surge came in gasoline were we saw a 7.9 Million barrels and distillate stocks 5.9 Million barrels. In Cushing Oklahoma the oil delivery point stocks rose by 332,000 barrels. Refinery runs dropped weekly crude imports up 1.2 million barrels. Heating oil stocks UP 537,000 Barrels to27.16 million barrels per day. _Phil Flynn

Remember: Everything you think you know, just ain't so. While that aphorism may contain a bit of hyperbole, if you keep it in mind you are not as likely to fall into the deep black holes of denial where doomers tend to dwell.

North America Riding High on Shale; Now It's the World's Turn

The US and Canada are experiencing a significant economic, energy, and environmental bonanza, due to the shale boom. Now it is the rest of the world's turn to learn from North American experience.

Countries embarking on shale gas development worldwide stand to benefit from lessons learned in US shale gas operations and water management, according to a recent report from Accenture. Operators, meanwhile, could cut both costs and water use in unconventional plays worldwide by collaborating with regulators and sharing infrastructure with other operators in the same basin, said the Accenture report, “Water and shale gas development: leveraging the US experience in new shale developments.”

Accenture analyzed how countries with proved shale gas reserves, specifically Argentina, China, Poland, and South Africa, can look toward experience gained in US water regulation and management to develop shale gas economically and sustainably.

“Successful oil and gas operators will be those that understand the local water challenges, leverage the learning from the US plays, and develop the right water sourcing, use-reuse, treatment, disposal, and supply chain strategy,” said Melissa Stark, managing director and Clean Energy lead for Accenture's energy industry group.

“One key opportunity for new geographies where infrastructure is a challenge is to explore sharing the development of infrastructure, water treatment facilities, and the development of the local supply market.” _O&G Journal _ via _ GWPF

Key Findings of Accenture report & link to full report PDF download

The tight gas & oil revolution is likely to help a score of nations around the world to boost their energy and industrial infrastructures -- at least for a matter of decades.

China, Argentina, Russia, Australia, and parts of Eastern Europe are likely to be the earliest beneficiaries to join North America in experiencing the bonanza. Africa, central Asia, and large areas of coastal regions and continental shelf may also display significant new tight oil & gas.

The evolution of oil production in both conventional and unconventional deposits will reflect the overall economics of global oil demand and supply.

The tight oil & gas boom was the result of small private concerns pursuing unpopular theories of production. Big oil and governments had almost nothing to do with this huge boom coming about.

The neo-Malthusian doomer psychology of imminent catastrophic energy depletion has influenced the thinking of policymakers in both government and industry for several decades now -- to the detriment of rational planning and development.

The rumour that doomers are partial to eating lead-based paint chips should perhaps be investigated more closely.

A Graphic Look at the Global Shale Revolution

Hindu

The real impact stems from its effect on the oil market. Shale gas offers the means to vastly increase the supply of fossil fuels for transportation, which will cut into the rising demand for oil — fuelled in part by China’s economic growth — that has dominated energy policymaking over the last decade.

...The major geopolitical impact of shale extraction technology lies less in the fact that America will be more energy self-sufficient than in the consequent displacement of world oil markets by a sharp reduction in U.S. imports. This is likely to be reinforced by the development of shale oil resources in China, Argentina, Ukraine and other places, which will put additional pressure on global oil prices.

The second factor is the potential to use natural gas for transportation. Some analysts suggest that this will only be a realistic prospect for fleet and long-haul road transportation. But they are overlooking the immense advantage that natural gas has as a transportation fuel in America and Europe, which have both developed a natural gas infrastructure in urban areas that takes piped natural gas into homes, offices and supermarkets. Once gas is cheap and widely available, it is possible to consider dealing with the “last mile” problem of providing home refuelling kits so consumers can fill up natural-gas powered cars in their own garages.

The incentives to develop shale oil and natural gas are very great. But so far, the United States has only experienced the first stage of low natural-gas prices and the reimportation of energy intensive industries such as chemicals and steel because of low gas prices. The next stage of the shale revolution’s impact is going to be felt as major stimulus gets under way from lower oil prices. More broadly, the shale revolution will grant the United States a greater range of options in dealing with foreign states.

For the Europeans, the shale revolution is also largely positive. A greater variety of gas supplies from liquefied natural gas originally destined for the United States has been dumped in European markets; by 2020, shale gas in the form of liquefied natural gas is likely to begin arriving in Europe in significant quantities, and there is also the prospect of some domestic shale gas becoming available. Europe will also benefit from the second stage of the shale revolution as oil prices come under pressure. _Hindu

Another Global Perspective

Every continent has shale oil & gas deposits. Even Russia has rich shale and tight rock petroleum -- but it will need North American technology to develop the resource. The same thing is true for China and much of the rest of the world. North America developed the technology and continues to refine it at a rapid rate.

Basic Fracking, Far Below the Water Table

While faux environmentalists whine about tectonic risk and the risk of polluting the water table and aquifers, the reality of the technology is leaving these green lefty-Luddites in the dust. The greatest environmental risk regarding shale oil & gas fracking is the risk of not taking advantage of the clean energy resource.

Russian Economy At Risk if Oil Prices Decline

The US shale boom has already hit Russia's Gazprom hard. Now, the rising boom in US oil production, along with other sources of new global crude production, are casting a shadow across Russia's grand plans for the future.

The Russian government requires an oil price of above $125 in order to achieve fiscal breakeven. That means that the Russian government is being forced to either postpone spending, or dip into cash reserves, as long as oil prices stay well below that level.

But now there is a very real risk that oil prices will dip from around $110 a barrel to below $90 a barrel. That would present a serious challenge -- perhaps a catastrophe -- to Putin's ambitious and free-spending government.

“If the [oil] price is $80 per barrel, the budget deficit will widen to 3 percent of GDP," Kudrin said.

"The figure of 3 percent is a critical boundary, beyond which we are likely to lose our country’s investment-grade rating,” he said.

Russia’s budget for 2013-2015 will run a deficit even with oil priced at $100 per barrel, he said. _Russia's Oil Risk

Another startling bit of news out of Russia, is the big push to shale oil & gas production in Siberia. After all the rude talk from Putin, Gazprom, and other Russian authorities -- telling the world how bad shale drilling and fracking is, and how pathetically irrelevant US shale production was -- now Russia's state oil company is taking the plunge into shale big-time:

ExxonMobil agreed to spend $300 million on advanced horizontal drilling and fracking at Russian state oil company Rosneft's Siberian fields in a project designed to help Russia realise its vast tight oil potential.

The two companies will form a joint venture, split 51-49 between Rosneft and Exxon, to carry out the pilot programme and launch commercial production if they find sufficient oil in the Bazhenov shale and the nearby Achimov formations of Western Siberia.

The Bazhenov is the world's largest source rock. However, Russia, still rich in conventional reserves, has yet to follow in the footsteps of the United States in deploying advanced horizontal drilling and hydraulic fracturing technologies, which is known as fracking, on a commercial scale.

With the core fields of Western Siberia in decline, however, the government of Russia, the world's largest crude producer, has offered tax breaks for companies who drill into "tight" formations where hydrocarbons are trapped in non-porous rock. _Siberian Shale

There is always the chance that US President Obama will let his buddy Putin off the hook, of course. Obama's EPA is chomping at the bit to shut down the US shale boom. Obama would make a lot of friends within the global faux environmental complex if he were to shut down the nascent US energy and economic boom. And such a move would make Putin a very happy man.

But Putin cannot count on that -- given Obama's ambivalent stance toward his own presidential legacy.

And so Russia sits in a type of limbo, trying to maintain world-class oil production utilising Soviet-era infrastructure -- in the face of a demographic collapse of ethnic Russians, a continuing capital flight overseas, and an enervating brain drain and "womb drain" to freer lands abroad.

Contrasting Views on Future of Shale Revolution

Analysts at BOA / Merrill Lynch predict a continuing rise in North American shale oil production, with a steady downward pressure on oil prices. That comes from the BOA/ML 2013 Energy Outlook.

The CEO of engineering & construction giant Fluor Corp. says that the continuing bonanza of shale gas in North America will fuel a huge resurgence in manufacturing and chemicals.

In Mexico, a potentially significant rise in shale production awaits political decisions by the new president.

Meanwhile in Russia, doubts about how long the bear can keep producing its oil at current levels. If Russia learns to exploit its own giant shale resources, it should be able to extend its energy winning streak by a matter of decades.

Meanwhile, large numbers of doomers are predicting that the North American shale bonanza will come to an abrupt end any day now.

Economist James Hamilton is predicting an end to current rising trends in production of shale oils in North America within 10 years.

Hamilton's prediction is incomplete, however, since he fails to explicitly state what he sees happening for the next several years after shale production tops, and levels off.

Peak oilers are famous for predicting production peaks which look like an actual mountain peak -- picture the Matterhorn, for example. But even the poster boy peak of oil production -- continental US production -- stops looking like a sharp peak if you step back in time and look at the big picture, still being painted.

Looking at North America as a whole, Al Fin shale oil analysts picture a 10 year ramp up, followed by a roughly 10 year undulating plateau, followed by a gradual decline in North American shale production. The decline will occur for many reasons, including rising prices of production -- and decreased demand for crude in the face of an explosion of cheaper substitutes beginning in the mid 2020s.

Much depends upon whether US President Obama allows the anti-energy ideologues in his administration to place an overburden of expensive and restrictive regulation on top of the costs of production of shale oil & gas. Will he let slip the dogs of his war against energy? Or will he relent, and attempt to nurture a stronger US economy in his second and final term?

A Shifting Geopolitics Comes With New Discoveries

This article was first published on Al Fin

Every modern industrial nation requires affordable energy to run its industry, commerce, and to keep its citizens comfortable within their homes. For the last few decades, energy consumers in the western world have lived under the threat of having their energy supplies cut off, by belligerent suppliers in OPEC, Russia, and other bullying dictatorships.

Preliminary Map of Global Shale Gas -- Much More to Come

With the coming of new energy technologies that are unlocking vast supplies of previously inaccessible oil & gas, Russia's and OPEC's stranglehold over more civilised and cultured parts of the world appears to be weakening.

The Gulf is not the only area where the established oil powers are in danger of crumbling. The biggest single loser of all will most likely be Vladimir Putin's Russia, a regime largely dependent on high energy prices and a captive market with no real alternative plan.

..."Russia has just seen its aspiration market disappear. The US is already a bigger gas producer than Russia," Redman said. _Guardian

As US energy production continues to shift away from OPEC toward domestic producers, US industries can once again plan their production schedules based upon a more reliable energy supply. So that as US and Canadian industries re-build based upon more reliable and cheaper supplies of fuels and energy, other countries that depend upon more expensive and less reliable forms of energy -- such as Germany -- will increasingly lose out to North America.

Thanks to new applications of drilling technology to unlock natural gas trapped in shale rock, the nation’s output has surged and energy experts almost unanimously forecast that prices will remain low or moderate for a generation.

...“It has become clear to me that the responsible development of our nation’s extensive recoverable oil and natural gas resources has the potential to be the once-in-a-lifetime economic engine that coal was nearly 200 years ago,” U.S. Steel Chairman John Surma said in a speech this year.

Industrial companies are betting that the surge in the domestic production of natural gas is much more than a blip. Cheap and plentiful supplies of natural gas are flooding the U.S. market, and prices in the United States are as low as a quarter of what they are in Europe or Asia.

“For the foreseeable future, thanks to the recovery of vast U.S. underground gas deposits of shale, natural gas is likely to remain 50 to 70 percent cheaper in the U.S. than in Europe and Japan,” said a recent report by the Boston Consulting Group. _WaPo

Whether these new technologies ultimately create a new "economic renaissance" depends upon whether government agencies are able to keep their corrupt and ideology-stained paws off the private enterprise boom.

A sudden surplus of previously rare high quality energy is likely to have unforeseen effects on several parts of the world.

"In the past, when OPEC was cutting production by half a million barrels, everyone was jumping up and down. Today no one cares as we have a real surplus of oil," said the head of Azeri state oil firm Socar's trading arm, Valery Golovushkin.

"There is already plenty of oil in the Mediterranean. We at Socar are relying on long-term supply contract to Asia. But quite honestly we don't feel any particular joy from taking it to Asia and wasting money on freight," said Golovushkin, a veteran of the Soviet oil export industry. _Reuters

The North American shale boom caught a lot of global oil market suppliers flat-footed.

As North American shale oil & gas continues to rise in production -- and as other shale producers in Europe, Asia, South America, Australia, and elsewhere come on line -- the problems for OPEC and Russia will only be compounded further.

It is likely that a number of regional wars will be fought over oil resources, as individual oil dictatorships find that their own production is not able to pay for their ambitions and their need to pacify their people. Many of these wars will be supported and encouraged by Russia -- in an attempt to ramp up the risk premium for oil, and overall oil & gas prices.

The consequences of these rapid shifts in new oil & gas supplies have only begun to shake out. Watch carefully, and be very cautious.

Brian Wang has followed the ramp up of North American hydrocarbon production very closely

How Long Will the North American Shale Boom Last?

The North American shale boom has shaken the global energy industry. From Russia to the Middle East to South America and Oceania, the unexpected burst of production of oil & gas from North American tight rocks has had an explosive effect. And the NA shale boom continues to grow and expand. The question remains, "For how long?"

Normally, the question of the extent of any given set of petroleum reserves would be left to geologists and engineers. But these days it seems that everyone from investors to pundits to politicians to doomers to faux environmentalists to climate catastrophists to corrupt journolists, are all weighing in on the question -- each in his own manner of personal bias and set of weighted assumptions.

Among the naysayers, we have geological consultants such as Arthur Berman, and investment oriented authors such as Bill Powers. Powers depends heavily on Berman's analysis, and predicts that the North American shale boom will collapse within 10 years.

Of course, analysts and consultants have been predicting the collapse of the North American petroleum enterprise -- "any time now" -- for the past 150 years, so one must take these dour predictions for what they are worth.

OPEC, Russia, and other interested parties have been active in spreading propaganda about the "safety" of fracking and the long term lack of viability of shale resources -- all the while preparing to develop their own shale resources in a semi-secretive manner. Take what they say about the issue with a tonne of salt.

Other pessimistic looks at the North American shale oil & gas phenomenon appear to be largely journolistic smokescreens for coming energy starvationist regulations from the US Obama administration. In other words, the public drone minds must be prepared for what their overlords tell them is best.

Still other predictions of the collapse of shale come from hard core peak oil and faux environmental / carbon hysteria sites. In those cases, the predictions are little more than a quasi-authoritative form of "wishful thinking."

There are also any number of cornucopian predictions, such as the EIA's prediction that the US will surpass Saudi Arabia as the world's biggest energy producer. ... More.

Al Fin analysts typically occupy the high middle ground. The consensus at Al Fin is that for the next ten years North American tight oil & gas is likely to continue to expand -- as long as Obama keeps his hands off. If Obama's green energy starvationists are let off their leashes to do their worst, all bets are off.

Still assuming the greedy, corrupt politicians keep their hands off: the second decade is seen as a plateau, where price and production achieve equilibrium. The third decade is likely to see a decline in North American shale production due as much to falling demand as to a more rapid depletion in a growing number of wells.

Source rock production can be seen as scraping the bottom of the barrel. Or it can be seen as what it is -- an opportunistic and innovative way of turning waste into wealth. And there is much more out there that has not yet been found -- both onshore and offshore. Think three dimensionally -- it will help you to break out of a flatland mindset.

As readers of Al Fin Energy understand, methane, ethane, and other short chain hydrocarbons are constantly being produced both in marine sediments and in the deep lithosphere. Understanding where hydrocarbons originate biologically and abiologically -- and why they are so abundant on other planets and within interstellar clouds -- may help us to find vaster quantities of the stuff. In a way it will be like tripping over our own feet -- much as the current shale boom has been.

Elections Have Consequences: The Future of US Energy

President Obama's powerful interlocking network of campaign support organisations has succeeded in making sure that the US President can sit in the White House for another four years. This feat opens the door for a great deal of new regulation which has been held back until after the US elections.

President Obama has spent the past year punting on a slew of job-killing EPA regulations that will destroy millions of American jobs and cause energy prices to skyrocket even more,” Senator Inhofe said. “From greenhouse gas regulations to water guidance to the tightening of the ozone standard, the Obama-EPA has delayed the implementation of rule after rule because they don’t want all those pink slips and price spikes to hit until after the election. But President Obama’s former climate czar Carol Browner was very clear about what’s in store for next year: she told several green groups not to worry because President Obama has a big green ‘to-do’ list for 2013—so they’ll get what they want. As a result, hard working Americans will lose their jobs and be subjected to skyrocketing energy prices

This report also importantly puts the spotlight back on an Obama-EPA that has, as the Washington Post said, earned a ‘reputation for abuse.’ It serves as a stark reminder that President Obama has presided over a green team administration that works every day to ‘crucify’ oil and gas companies and make sure that ‘if you want to build a coal plant you got a big problem.’ _Independent.org

Not just the EPA, but the Department of the Interior, the Bureau of Land Management, and a number of other US federal agencies, have prepared regulations which will work to strangulate US energy industries:

... the proposed BLM rule would drive oil and gas developers off federal and tribal lands. Complying with the rules is too complicated and costly. Producers can realize a much faster and much better return on their capital investment by developing oil and gas reserves on adjoining private lands.

Federal and tribal lands hold large reserves of oil and natural gas. At a time when the United States desperately needs to move toward, not away from, energy independence, it makes no sense to let bureaucratic meddling effectively place these valuable domestic reserves out of reach. _Killing US Shale

Mr. Obama is certainly the president of the US, and probably will be for a number of years to come. He has the right to put his personal stamp on government policy.

In his first term, Mr. Obama largely kept his hands off the shale energy boom. That was fortunate for him, because without the shale boom, the US economy would have been in much worse condition. He "confined" his executive meddling on energy to a stonewalling of offshore oil, a slow regulatory death of coal, and what is essentially a freeze on nuclear.

But now, elections have consequences, and Mr. Obama has no reason to fear the full implementation of his agenda of energy starvation. The greatest uncertainty remaining is: How is it to be done, and when? These things must be done delicately __attributed to the Wicked Witch of the West.

More Oil Where That Came From

Resource scarcity and peak oil doomers like to say that the shale oil & gas boom is just a "flash in the pan," a very limited and short-lived phenomenon.


But the reality is that not only does oil production continue to spike from North American shale oil deposits such as Bakken and Eagle Ford -- oil drillers are also beginning to break through into profitable layers of chalk, sandstone, and limestone, above and below layers of shale that are already producing millions of barrels per day. And it looks as if discovery of and production from these tag-along "not shale" deposits has just begun.

The Eagle Ford is a 50-mile-wide swath of shale that runs from the Mexican border to East Texas, and 4,970 wells have been permitted in 25 counties.... There's an increasing amount of drilling in the layers above and below the South Texas shale play... _MySanAntone

Almost the only bright spot in the US economy during the Obama years, has been the shale oil & gas boom -- the result of horizontal drilling, hydraulic fracturing, and other advanced exploration and drilling techniques. And as long as the Obama EPA and Interior Department allows it, the boom seems likely to expand further.

While the Eagle Ford appears to be the mother lode — the largest and most consistent South Texas formation holding the most oil and gas — there are at least 10 other rock layers sitting above or below it that also are producing oil or gas.

This has the oil and gas industry returning to some old friends — formations such as the Austin Chalk and the Olmos Formation — that for decades have produced using traditional vertical wells. Now, the industry is applying new horizontal drilling techniques with success.

Laredo Energy so far has drilled wells in six geologic layers on its acreage: the San Miguel Formation, Navarro Group, Wilcox Formation, Olmos, Escondido and Eagle Ford. And two-thirds of its production is coming from outside the Eagle Ford Shale.

“This is not just a local phenomenon for us,” Hart said. “It's starting to become widespread.”

Peggy Williams, editorial director with Hart Energy, said horizontal fracturing techniques are being used not just for shale, but in other rock such as sandstone, chalk and limestone.

“What's happening is these technologies to extract oil and gas from tight formations like shale have been developed to the point where they're fairly effective,” Williams said.

It's early in the exploration phase of these other formations, so it's hard to make generalizations. _MySanAntone

Read more at the link above.

One has to wonder what goes through the minds of peak oil doomers, in their online alabaster temple-mausoleums of groupthink. But not too much or too often. In the real world, there is much to be done.

Without Obama, US Energy & Economic Prospects Improve

US President Obama has big plans for using the US Environmental Protection Agency (EPA) to shut down a large number of US energy projects and enterprises. The EPA's destructive plans are already in the works, and will be enacted over the next few months even if Obama is defeated. Fortunately, a new Romney / Ryan administration would soon be on the job to shut down those shenanigans.

With a new US administration will come a new and brighter day for US energy -- with healthy add-on effects to the US economy at large. Here is a look at the big advantage that the US will have over Europe and East Asia -- if Obama is defeated:

Some fifty new projects have been unveiled in the US petrochemical industry. A $30bn investment blitz in underway in ethylene and fertilizer plants alone.

A study by the American Chemistry Council said the shale gas bonanza has reversed the fortunes of the chemical, plastics, aluminium, iron and steel, rubber, coated metals, and glass industries. "This was virtually unthinkable five years ago," said the body’s president, Cal Dooley.

...The revival of the chemical industry is a spin-off from the greater drama of America’s energy rebound, though a very big one. As many readers will have seen, the US energy department said last week that the country will produce 11.4m barrels a day (b/d) of oil, biofuels, and liquid hydrocarbons next year, almost as much as Saudi Arabia.

...America looks poised to become the world’s biggest producer in 2014. It will approach the Holy Grail of "energy independence" before the end of the decade. This is largely due to hydraulic fracturing - blasting rock with water jets - to extract shale gas and oil, though solar power and onshore wind are playing their part.

Europe is going in the opposite direction, drifting towards energy suicide. So is Japan as it shuts down its nuclear industry after the Fukushima disaster. China is more hard-headed, as it needs to be. The country is adding 20m cars a year. Chinese oil imports are rising by an extra 0.5m b/d annually.

As of last week, US natural gas prices were roughly one third of European levels. The German chemicals group BASF said it had become impossible to match the US on production costs.

Asia is facing an even greater handicap as Japan soaks up supply of liquefied natural gas (LNG) to offset the closure of its nuclear power stations. Prices on the Pacific rim are near $15 per million British thermal units (BTU), compared to $3 in the US. _Ambrose Evans-Pritchard

H/T Anti-Green

If Obama is re-elected, all of those positive plans could easily come screeching to a halt, as the EPA moves to regulate the shale bonanza out of existence -- as well as a large number of other energy enterprises.

The green movement is composed largely of very impractical ideologues. They have achieved ascendancy in several governments of advanced nations -- including the US, Germany, Australia, and several others -- to a greater or lesser extent. Greens reject reliable forms of energy such as nuclear and hydrocarbons, in favour of the intermittent unreliables -- big wind and big solar.

If Europe does not find a way out of the green miasma of the energy starvationist lefty-Luddite greens, it will find itself growing demographically old in an environment of increasing energy scarcity. It is bad enough to grow old. But to grow old in the dark and cold -- that is a sad legacy for a once great continent.

US EPA Standing By to Shut Down US Energy Boom

This article was previously published on Al Fin

Today we bring you some good news, and some bad news, about the US shale revolution -- which has been the saving grace in the US economy over the last few years.

First, the good news:

Image Source

The U.S. shale boom... has transformed the U.S. energy sector. Shale gas alone is now 10 percent of the overall energy supply in the country.

A surge in unconventional oil and gas extraction nationwide will trigger more than $5.1 trillion in capital spending and support a total of 1.7 million jobs this year, a number that will swell to almost 3 million by 2020, a leading consultant said in a study released Tuesday. _IBT

Now, the bad news:

...the Obama administration is working to increase federal control over hydraulic fracturing in the United States. In April of this year, President Barack Obama issued an Executive Order on hydraulic fracturing that created a working group of 13 executive branch departments to coordinate policies between departments, share research and information on hydraulic fracturing, and ensure that the federal government spoke with one voice on the subject. This was in response to actions being undertaken by the Environmental Protection Agency to release new air pollution regulations for shale gas drillers and by the Department of Interior to release new hydraulic fracturing regulations for drilling on public lands.

In April, the Environmental Protection Agency (EPA) required drillers to capture emissions of certain air pollutants (volatile organic compounds and methane) from new wells. Drillers can burn the pollutants at the wellhead until the start of 2015, when EPA expects that enough equipment will be available to capture the pollution.[ii] The original proposed rule issued by EPA in 2011... was estimated to reduce oil production from hydraulically fractured wells by up to 37 percent and reduce federal royalties by $8.5 billion and state severance taxes by up to $2.3 billion due to reduced drilling and production.[iii]

While other countries are using hydraulic fracturing to increase production and revenues, the United States – which pioneered the technological breakthroughs that led to the practice — is looking to lower oil and gas production and increase costs by increasing regulations on the technology. To date, hydraulic fracturing has helped to reduce our dependence on imported oil and natural gas, lower natural gas and electric utility bills, and increase employment in states where shale oil and natural gas are produced. It looks like hydraulic fracturing should be a win-win relationship for domestic production and consumption of oil and natural gas, but the Obama Administration has proposed changes that threaten that through increased regulations, despite the fact that the states have successfully regulated that industry for half a century or more. _IER

Obama conveniently (and duplicitously) claims credit for the shale revolution, while his administration works behind the scenes to clamp down on the technologies which made the revolution possible.

Oil Job Finder

Plentiful oil & gas opens the door to a wide range of other industries to grow -- and to return to the US from overseas. No wonder Obama wants to stop it.

Infographic Illustrates Impressive Bakken Shale Potential

The Bakken could be producing as much as a million barrels per day by 2020, and extraction of this oil is benefiting the region and the country through the creation of thousands of jobs and the generation of substantial revenues from taxes and royalties. The infographic below illustrates the oil-producing potential of the Bakken, the robust activity in the region, and the economic benefits that flow from its development. _UGCenter

The Potential of the Bakken Region, to learn more about local production in The Bakken visit the Unconventional Oil and Gas Center, a Hart Energy publication.
Notice the explosive ramp-up in production over the past few years.

And the hits just keep coming! Besides the expanding production of shale oil in North Dakota, Texas, and Ohio, a new discovery in Oklahoma is likely to create a new batch of oil tycoons in the Sooner state. And in California, the Monterey Shale may eventually grow to be one of the biggest shale plays in the lower US.

Here is an incomplete index of US shale fields. Alaskan shale production is likely to grow quickly.

...Alaska’s vast shale oil formations... could be tapped in the near future, adding hundreds of thousands of barrels of oil to the pipeline and creating hundreds of jobs. _Fairbanks Daily News-Miner

Rising US Shale Production and Impact on Employment

Growth in production of shale oil and shale gas is already having an impact on US employment, as seen in the graph below. If not for the economic growth in the US oil & gas sector, US unemployment would be well above 10% and the dismal state of the US economy would guarantee Obama's fate as a one-term president.

MJ Perry via Energy Tomorrow

But shale happened, and everything has changed. And the change has just begun.

Separate studies released in the last week by two respected Canadian firms, one of Western Canadian shale gas resources and another of the U.S. shale gas base have moved the tally of North American potential to a new plateau, beyond the trillions (Tcf) to 3.3 quadrillion cubic feet (Qcf), according to reports by Natural Gas Intelligence (NGI).

Calgary-based Sproule Associates, the oldest and still one of the biggest Canadian petroleum engineering and geology consulting firms, last week announced its survey of just five of 50 shale basins that have been identified in Western Canada produced a resource base estimate of between 809 and 2,222 Tcf or 2.2 Qcf.

A new analysis by ITG Investment Research, also based in Calgary, entitled “No More Guessing: Hardcore IV,” shows the U.S. Lower 48 onshore has 1.1 Qcfe of recoverable resources across 450,000 drilling locations. While the total includes data from 37 U.S. shale plays, ITG estimates recoverable resources of 900 Tcfe in just 10 overlapping plays, compared to 426 Tcfe for those same plays as estimated in a recent study by the U.S. Energy Information Agency. _TheGWPF

That is likely to be an underestimate, since much of Canada and the US -- including Alaska -- was not considered. More to come.

Speaking of "more," the EIA graphic below illustrates the near term projected growth of shale oil production in Texas and North Dakota alone. Ten years ago, the EIA could not envision this type of rapid production growth, and yet suddenly, there it is.

NextBigFuture

All of this growth in North American oil & gas is occurring despite the Obama administration's intentional policy of energy starvation, as manifested by offshore drilling bans and moratoriums, closing off of federal lands to energy production, and business killing regulations out the as...trozone.

Peak oil doomers have predicted the early demise of shale production, but the reality is proving otherwise.

Rune Likvern [in The Oil Drum], has a bearish view of Bakken production. He believes Bakken production is close to hitting a plateau.

Mr. Likvern's conclusions are incorrect. Well costs are improving in the Bakken, and will continue to do so through 2012.

...the Red Queen article stated an oil price of $80-$90/barrel was needed for Bakken wells to make commercial sense. Using an $80/barrel oil price we see that the majority of middle Bakken wells produce enough revenue to pay back costs in the first year of production. The author also made the mistake of not including natural gas, as he stated the potential contribution is marginal at $3/Mcf. It is obvious the author is not familiar with Bakken production as wells in NE McKenzie County can produce up to 11% NGLs. Using a $40/barrel price, in the first year revenues from NGLs are over $730,000.... _Seeking Alpha

As innovation continues to pile on top of innovation, shale operators are learning squeeze more out of every well.

Innovative minds are at work developing new tools and techniques to improve production. These range from new ways to perform massive multistage stimulation jobs to small embellishments in mature processes....

The recent Society of Petroleum Engineers Annual Technical Conference and Exhibition in Florence, Italy, offered several examples of easy-to-implement, economical techniques to optimize production. In mature reservoirs producing with high water cuts, it is difficult to identify from where production is coming. Many wells in these depleted fields are produced using electrical submersible pumps (ESPs); therefore, running production logging tools to evaluate production can be costly and problematic. A novel idea was presented where a fiber-optic distributed temperature monitor was run below the ESP. The temperature profile log could not identify the zones producing oil but could easily identify those zones producing water from nearby injector wells. By systematically turning injectors on and off, it was easy to see which injectors were contributing to which zones. On a subsequent workover, the water zones were squeezed off or isolated using a casing patch, significantly increasing the oil recovery fraction from the producing well...

New fracturing techniques have been pioneered to maximize well performance on a field or reservoir basis. Using the “zipper frac” technique, adjacent wells can be fraced stage-by-stage sequentially. By holding pressure on one well stage while the adjacent well stage is fraced, the resulting stress field prevents the fracs from intersecting. Going back and forth between the wells at each successive stage is cost-effective and helps to optimize production from each well. _EPMag

As production methods grow more efficient and profitable, more jobs are added to the overall economy.

Shale and hydraulic fracturing are driving job creation in our industry but also in associated sectors. Ohio and other states are seeing a rise in manufacturing due to shale production, which one study says could create 1 million new jobs by 2025. Steve Sexton writes on the Freakonomics blog that shale gas offers the U.S. advantages all around... _EnergyTomorrow

While the Obama administration has been lavishing billions of dollars on politically connected big wind and big solar developers and investors -- many of which went promptly belly-up -- the real action in energy has been in areas far from Washington.

Up until now, the Obama vision has led to countless failures, bankruptcies and layoffs — bringing calls for more subsidies that are taken from hardworking, productive people and businesses and given by unaccountable bureaucrats to failed technology companies run by crony-corporatists, who then contribute substantial portions of this compulsory taxpayer largesse to the re-election campaigns of cooperative politicians. _Source

The Obama EPA has been biding its time, waiting until after the election before taking steps to regulate the profits out of the shale motherlode. Even if Obama's energy starvationist regime is defeated in the US November elections, the EPA will have time to enact regulations which pack a ruinous punch against North American energy production -- including shale.

We can only hope that the green bureaucratic ideologues ensconced within Obama's EPA will re-consider their plan of action.

Global Shale Resources Shaking Up Energy Scene

Previously published on Al Fin blog


The Earth has barely been explored in terms of its vast energy potential. New sources of energy are cropping up in unlikely places, on an almost daily basis.

Shale and other unconventional gas resources have been identified in France, Germany, Hungary, Italy, Netherlands, Poland, Romania, Spain, Sweden, Switzerland and the UK. Land and license acquisition, and even some early stage exploration, is already underway or foreseen in a number of these countries. _New Shale Frontier

South Africa, for example, is now moving ahead to develop its significant native shale resource.

News from Japan's new shale discoveries
Notice that the map of shale resources above is incomplete, with large areas "greyed out". The map below reveals a broader view of the presently known global shale resource, but even that map is woefully incomplete.

JOHN Howard has warned that the development of the shale gas industry in the US could shake up the global energy scene and have a dramatic impact on China and Australia.

... "I think the potential for gas and oil from shale to transform the world energy scene, including the energy scene in China, is quite significant," Mr Howard said. _Global Shale Shakeup via Australia

Australia is yet another energy-rich country that has just begun to discover its potentially huge shale resource.

We should not forget China, which is thought to possess a gargantuan resource of shale gas. While China is unlikely to ramp up shale production rapidly, it is already using the threat of its shale gas to negotiate much tougher terms with Russian gas company Gazprom.

On Tuesday, Chinese sources told Platts in Astana that price remains the key issue in the negotiations, echoing earlier statements by the Russian side.

Russia wants a price close to that paid by its European customers, while China is insisting on a lower price, similar to what it pays to Middle Eastern LNG suppliers, according to the Chinese sources. _Platts

Left unsaid in most press reports is the profound impact of North American shale oil & gas development on the energy hopes and dreams of other nations possessing large reserves of shale hydrocarbons.

Energy and Its Sworn Enemies in Government

Brian Westenhaus presents an interesting look at natural gas prices around the world, and wonders why the US government is dragging its feet on LNG exports to the gas-hungry nations of Asia and Europe.

For one answer to that question, one needs to look at the policies and behind-the-scenes machinations of the Obama administration and the US Democratic Party controlled Senate.

One must assume that the Obama DOE and the US Senate have good reasons for obstructing policies that would increase prosperity for companies in the US private energy sector, but rational reasons for Obama's actions do not readily jump into the conscious mind.

New Energy and Fuel

North America and much of the rest of the world are poised to begin producing significant new hydrocarbon resources -- beginning somewhere around the year 2020 -- assuming that today's governments (such as Obama's) move away from current policies of "energy starvation":

By 2020 or so...a flood of new oil and gas production will begin to wash over the world. Rather than general economic mayhem, there will be an economic shift: some rich countries will weaken, and hitherto marginal nations will take center stage.

Under this new scenario, oil prices could average $80 a barrel, compared with $110 for Brent benchmark crude today. Gulf monarchs untouched by the Arab Spring could face unrest, as shrinking oil revenues limit their scope for giving handouts. Mozambique—yes, Mozambique—could become one of the most important petro-states on the planet. China could more congenially assume a top rung among global powers. And the US could untether itself from some tyrants.

This vision of energy abundance stems from a series of new finds. Already, a natural gas revolution is under way in the US, where drillers armed with the new technology of hydraulic fracturing, or “fracking”, are pumping enormous volumes of natural gas from dense shale rock. America, on the verge of a gas deficit a few years ago, now has a century-long supply of the fuel. And fracking has now spread to shale oilfields. In states like North Dakota and Texas, it has brought an astonishing boost to US petroleum production.

But shale is only the beginning. There has been a flurry of discoveries and new production elsewhere—in Canada’s oil sands, the deepwater Gulf of Mexico, the Equatorial Margin of eastern South America, in offshore Brazil, deepwater Angola, west and east Africa, the eastern Mediterranean waters offshore from Cyprus and Israel, and more. Some of these new reserves may not start producing oil and gas until the 2020s, but when they do, they could spark the types of geopolitical disruption described above. _Quartz

Obama is closing hundreds of coal powered electricity generating plants in the US -- creating the potential for dangerous instabilities in the 3-part national power grid structure. Obama has devastated the US offshore oil & gas industry, has stonewalled pipeline projects that would boost energy production from new US shale oil and Canadian oil sands projects, and has blocked a large number of proposed energy projects on federal lands. While talking in favour of shale gas out of one side of his mouth, his EPA is moving to make shale oil & gas production much more expensive.

Across the board, the US Obama administration has blocked viable energy projects from hydrocarbons and nuclear sources -- while wasting many billions of stimulus dollars on big wind and big solar crony companies that are either already bankrupt or soon to become so.

The long term effects of such energy starvation policies will result in widespread economic slowdowns and unnecessary human suffering. Is that what the Obama administration wants to happen? No one knows, or if they do, they are not telling.

Betting Against Shale Gas is a Dummy Play

We know that Russia's Gazprom and President Putin would like for the rest of the world to forget all about fracking for shale gas -- despite the fact that Russia is beginning to develop what is perhaps the most massive tight oil & gas play on the planet. France and Germany seem to be prohibiting fracking for oil & gas -- for now -- and Exxon has walked away from a chance to frack for shale gas in Poland.

But other big companies are moving into Poland and Eastern Europe almost faster than Exxon can remove itself.

Oil and gas investment is flooding into the region in amounts not seen since the fall of the Berlin Wall. Anglo-Dutch giant Royal Dutch Shell RDSB.LN -0.32% PLC, France's Total SA TOT -1.01% and ConocoPhillips COP +0.15% of the U.S. have acquired exploration rights in Poland, where current estimated reserves equal 35 to 65 years of the country's demand for natural gas, according to the Polish Geological Institute.

Ukraine is heating up as well. TNK-BP Holding, a joint venture of BP BP.LN +0.29% PLC and a group of Russian investors, plans to invest $1.8 billion in shale projects at a half-dozen sites around Ukraine. In June, Italy's Eni SpA E -1.37% paid an undisclosed amount for a stake in Ukraine-based LLC Westgasinvest, which holds about 1,500 square miles of land with potential shale-gas reserves. And Chevron Corp., CVX -0.09% which has acquired more than 6,250 square miles of potential shale gas leases in Central Europe since 2009, says it is working with Ukraine to negotiate a production-sharing agreement. _WSJ

It is rather clear that what happened with Exxon is that Russia offered it a piece of the huge Bazhenov fracking play if Exxon would abandon its Eastern European fracking -- at least the part of it that lies outside of Russia.

Gazprom is suffering some reverses due to mismanagement and a corrupt involvement with the Russian government. It will be more difficult for top Russian government functionaries to siphon profits from Gazprom as profit levels drop in response to more competitive gas prices offered to Europe from other suppliers. Gazprom's (and Putin's) hellfire sermons against fracking are being exposed as self-serving ways of trying to cover up a worsening balance sheet.

Germany is beginning to pay a price for its rejection of shale gas and nuclear power. German industry is falling behind in global competitiveness and is being forced to move more and more plants overseas as a result of its government's horrendous Energiewende policy.

South Africa first banned fracking, but is now rapidly back-stepping from its earlier stance. As noted before, Russia is now adopting fracking for its huge tight oil & gas resources after first condemning it. More and more nations are certain to follow suit.

North America was first out of the gate adopting newer, more efficient methods of getting at tight petroleum resources. But the technology is spreading rapidly, and is likely to significantly impact global energy markets for at least 2 to 3 decades.

By the end of that time, several new advanced nuclear fission reactors -- safer, cleaner, cheaper, scalable, factory - produced to order -- are likely to be coming onto the market internationally. These new sources of high quality industrial heat & power are likely to radically change the energy landscape, and push oil, gas, and coal to the margins -- more suited as chemical feedstocks for the future.

As for big wind and big solar? They were never a good match for modern industrial societies, and should probably be limited to third world villages and remote island locations.

Fracking Suddenly Becoming More Economically Affordable

Schlumberger's Hiway Flow Channel Hydraulic Fracturing increases production by 20%, reduces water use by up to 60%, and reduces proppant (sand, fibre, chemicals etc) by 40%. All of this adds up to significantly lower expense per unit of production, making tight oil & gas production more economical.

Schlumberger LTD FAQs

[Besides Hiway,] Schlumberger and other innovators are also using sophisticated seismic techniques, combined with data from pilot wells, to reduce the number of fracks along a drill pipe and target only the "sweet spots" in the field.

Together, these new techniques and smart rugged sensor kit from National Instruments can also reduce the production pace variability that plagues the unconventional industry.

And according to one senior executive at one of the world's major oil companies, these cost-saving innovations may only be the beginning.



Oilfield services company Schlumberger has devised a new fracking system called "Hiway" which promises to slash the costs of tight gas production.

So how does Hiway work?

Hodenfield, who grew up in North Dakota where the Bakken field is at the centre of the U.S. shale gas boom, brightens at the opportunity to explain a process that adds a proprietary fiber to the traditional sand and fluid mix, and uses a "pulsing" system to send globs of the fiber in between each injection.

The dissolvable fiber globs create more effective channels for the gas to flow, and the pulsing rhythm can be made to match the geological structure of the rock, also pushing the sand deeper into the cracks and resulting in more effective openings that conduct gas better for every liter pumped in.

Hiway is not the only new technique on the scene as oil companies look to use fracking to reach more lucrative oil as well as gas.

Schlumberger and other innovators are also using sophisticated seismic techniques, combined with data from pilot wells, to reduce the number of fracks along a drill pipe and target only the "sweet spots" in the field.

Together, these new techniques and smart rugged sensor kit from National Instruments can also reduce the production pace variability that plagues the unconventional industry.

And according to one senior executive at one of the world's major oil companies, these cost-saving innovations may only be the beginning.

"It's mostly brute force up to now," he said. "When the oil majors get serious about investment in fracking the cost could fall by half."

U.S. fracking expenditure is not pocket change. Hodenfield cites data from analysts Spears & Associates saying the total onshore oil and gas industry drilling and completions spend, boosted mainly by unconventional work, has soared to $150 billion a year from $20 billion in 2002.

This eclipses the offshore spend, which was at a similar $20 billion level 10 years ago and has only recently recovered to that level after the Macondo oil spill disaster of 2010.

Hodenfield says smarter technology is also the key to reducing the environmental impact of fracking in shale rock, tight gas, coal bed methane and other unconventional gas fields. _Reuters

Tight oil & gas is not an infinite source of hydrocarbon energy, but it is a truly massive resource --- particularly on a global scale. While vast conventional oil & gas resources remain to be discovered, the same is doubly true for unconventional hydrocarbons. This is because up until now, exploration has not focused upon the unconventional resources. Due to an increasing ability to produce this resource more economically, more exploration will take place looking specifically for unconventional deposits.

h/t GWPF

Where the US Jobs Are

This article was previously published on Al Fin blog

In towns and counties across the North American oil patch, there are so many jobs that employers cannot find enough people to fill them. The shortage of employees applies not only to service jobs, but also to government jobs that offer good pay, benefits, and a lifelong pension after 20 years.

In Montana and North Dakota:

Rapid oil and gas development in the “oil patch” of western North Dakota and northeastern Montana has created huge demand for workers—not just in the oilfields, but also in a range of non-oil industries. But so far, the supply of labor—from within and outside the region—has responded slowly to demand. In recent years, job openings have soared and unemployment has dropped to very low levels—below 3 percent in a number of counties. _Desperately Seeking Workers

In Texas:

A freshly graduated petroleum engineer can make $80,000 a year, sometimes with a $10,000 to $20,000 signing bonus tacked on. Roughnecks and truck drivers willing to work killer hours can gross over $100,000 a year. _Chron

In Oklahoma:

Many businesses and government agencies now struggle to find enough workers. Most able-bodied people can double or triple their income in the oil patch.

“If you can walk and breathe out here, you can get a good job,” said LaVern Phillips, president of the Industrial Foundation in Woodward. The county’s unemployment rate hovered around 3 percent in June, 5 percentage points lower than the national average. In some nearby counties, the rate has dipped below 2 percent.

In towns like Woodward, which is home to dozens of oil and gas companies, housing is scarce, hotels are booked solid and vacant jobs are everywhere. _Many Jobs Go Unfilled

Don't get me wrong. There are plenty of Obama administration officials who would like to shut down the oil & gas boom. Many of these spoiled sports work at the US EPA, but some of them work in the White House itself.

But Obama and his anti-private sector activists and energy starvationists have been warned by his re-election strategists that Obama cannot afford to destroy any more private sector jobs -- at least, not until after the election. After the election, they are willing to allow Obama to do his worst.

Just in case Obama is defeated in November, real estate developers across the oil patch are making plans to build thousands of units of rental properties, to take advantage of the swollen populations of oil workers -- and consequent housing shortages -- across the oil boom towns and counties.

The US oil & gas boom has the potential to add almost 4 million new jobs to the US economy, both directly and via add-on stimulatory effects to local economies.

Imagine the state of the US economy, had Obama not gone all-out to shut down offshore oil drilling, coal mining and coal power plants, nuclear power plants, energy production on public lands, and a number of other industries which would have been key to re-building a healthy economy? Instead, Obama drove the US deeper into debt by the $trillions, to pay off crony supporters across the board from unions to trial lawyers to green ripoff lobbies and corporations.

Most people who will vote for Obama, are doing so due to dependency on government payoffs of one type or another. Certainly far more are dependent on government checks now, than when Obama first campaigned for the presidency. Imagine how many people would be dependent on the government after a second Obama term?

It is almost as if Obama is creating a nation of crack ho's, dependent upon a steady supply of government crack.

Without Obama, in 2013 the US economy would have a chance to rapidly re-build, on a more solid basis than an addiction to government handouts and corruption.

Of course, after Obama, the US government debt is so high that even very slight rises in interest rates could put catastrophic stresses on the US federal budget. And once interest rates do inevitably go up, the rate of growth of the federal debt will make it difficult for even a booming economy to pay it down.

But then, with more of Obama, the end result will necessarily be default. And you don't want to know what that would do to the world economy.