The resurgence of production in the US in recent years has given new hope to long-standing cornucopians. At a minimum, it's certainly important in driving the spread between WTI and Brent oil prices. I remain uncertain at this time how far this trend can go - there's little doubt that there's a huge amount of oil in the ground in the Bakken rock formation, for example, but there remains huge uncertainty in how much will be eventually recoverable given the very poor properties of the rock and I, at least, am not yet clear on what the long-term sustainable economics of these projects looks like.
If we take the state data above and do invidual lines, we get this:
You can see that the upsurge in the last couple of years comes entirely from North Dakota (Bakken) after 2007 and then Texas even more abruptly since 2010 - Texas has added something like 600kbd in two years.
3 comments:
Interestingly, the Texas line looks to be about 1.75. However, the actual field data from the Texas Railroad Commission seems to put the crude total at something like 1.1 or 1.2 (depending on whether you use 2011 or 2012 to date). I'm not sure why the EIA data is so different, but the difference represents almost the entire stated gain from Texas.
Thanks for commenting on this study. Page 14 has a fairly obvious "tell" as to the author's biases:
"The principal difficulty ... is the effect of hydraulic fracturing on the environment, which is perceived as contributing to water and land contamination, natural gas infiltration into fresh water aquifers, poisoning of the subsoil because of the intensive use of chemicals, and even minor earthquakes. Even if those problems cannot be eliminated, after more than one million hydraulic fracturing operations in the United States since 1947 (hydraulic fracturing is not a new technology), the evidence shows that only a tiny percentage of these accidents occurred, and that they can be managed with appropriate best practices and adequate enforcement, rather than by over-regulating the activity."
The problem is the "perception" not the reality. The only alternative to self-regulation (ie NO regulation) is "over-regulation".
As a Texan I am proud - Drill baby drill. Now if those evil oil companies would just lease that family ranch in East Texas
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