Wintery Knight

…integrating Christian faith and knowledge in the public square

Good news: Venezuelan President complains that fracking is “flooding” oil markets

Gas prices vs domestic oil production

Gas prices vs domestic oil production

(Click for larger image. Source)

Why are gas prices so low all of a sudden?

Well, let’s ask the communist President of Venezuela:

The broadcast networks may not want to give credit to hydraulic fracturing for increasing U.S. oil production and lowering global oil prices, but at least one angry world leader did just that.

Venezuelan President Nicolas Maduro complained that fracking in the U.S. has “flooded” the world market and contributed to lower oil prices, a connection that broadcast networks’ evening news reports barely made recently.

“The oil they’re taking from (shale deposits) and the gas. They’ve flooded the international market to batter the Russian economy …, Iran and to hurt us, Venezuela,” Maduro said in a broadcast on VTV, a state-run TV channel in Venezuela, according to Fox News Latino.

Fracking has been one cause of increased oil production in the U.S. That increased production helped lower oil prices by more than 30 percent since September 29. The decline in oil prices since June has severely impacted Venezuela, since oil exports were a major source of government income. “Some estimates put the break-even price for Venezuela to balance its budget at around $121 a barrel,” CNBC reported on December 7. That’s more than double current oil prices. Oil closed at $59.15-per-barrel on December 11.

As of January 2014, Venezuela’s state-run oil company brought in 96 percent of foreign earnings, according to The Economist. Maduro announced on December 2 that the government would cut spending by 20 percent.

[…]Venezuela was experiencing particular difficulties. That economy was on the verge of collapsing, CNBC said on Dec. 1. If low oil prices continued, Venezuela may face a “game over” situation and “barbarity and people looting.”

Do you know who else is hurt by this? Russia. I sure hope they don’t do anything aggressive to their neighbors while their economy feels the pinch of lower gas prices.

It’s a good thing when villains shake their fists at us, but it’s a better thing when consumers pay less for gas:

Thanks in part to the widespread use of technologies like hydraulic fracturing and horizontal drilling, global oil prices plummeted in 2014. Energy experts even predicted the U.S. could be the top oil producer in the next several years.

[…]Fracking and other advanced technologies helped the U.S. nearly double its average daily output of oil, from 5 million barrels in 2008 to an expected 9.42 million barrels in 2015. The huge supply increase was one factor sending crude oil prices down. Crude fell by more than 32 percent, from $93 to $63 just since Sept. 29. This already drove gas prices down to a national average of $2.66 for regular on Dec. 9, according to AAA.

This is great news for consumers and businesses which could save as much as $1.3 trillion worldwide because of lower oil prices, according to Julian Jessop, chief global economist at Capital Economics in London. Here in the U.S., Americans could save $230 billion if prices remain low for the next year, The Washington Post said on Dec. 1.

The only bad side to this story is that fracking is an expensive way of drilling, so as the price of oil drops, energy companies will be scaling back fracking until it becomes profitable again.

I think this story is important, because it helps to explain what the people who oppose the Keystone XL pipeline are concerned about. They know that there are two results to allowing that pipeline to be built. First, a hell of a lot of jobs will be created, reducing dependency on government. Second, the price of gas at the pump will go down further. That’s what the environmentalists (and their Democrat allies in Washington) are seeking to avoid. They want more government dependency, and higher gas prices.

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New PNAS study finds fracking emissions far lower than EPA estimates

From Investors Business Daily. Before you read the article, you should know that “fracking” is short for hydraulic fracturing. This is a technique for extracting shale oil by creating fractures in rocks.

Excerpt:

Whether naturally occurring or not, environmentalists claim that fracking would release huge amounts of what they consider the most potent heat-trapping greenhouse gas, far outweighing the value of producing huge quantities of clean-burning natural gas.

Now comes a study, conducted by scientists at the University of Texas and published in the Proceedings of the National Academy of Sciences — and co-financed by one of the highest-profile environmentalists in the country — that shows much smaller amounts of methane emissions associated with fracking, far less than environmentalists and the Environmental Protection Agency have contended.

[…]The study, billed as the first to measure the actual emissions of methane from natural gas wells, finds these emissions were, in some cases, only about 2% of the most recent national estimate by the EPA in 2011. An upcoming EPA rule, effective January 2015, requires all methane to be captured when liquids are removed after drilling.

Seen by many as an attempt to stop fracking, which has boosted the economy through its ability to tap previously inaccessible oil and gas riches, the rule might be redundant. Two-thirds of the wells studied already were capturing or controlling the methane to reduce emissions.

“For those wells with methane capture or control, 99% of the potential emissions were captured or controlled,” the study notes.

This proves once again there is no problem technology can’t solve and that when decisions are made based on technology, rather than ideology, good things happen.

An interesting aspect of the study is that it was funded in part by Tom Steyer, a billionaire environmentalist who has become highly active in national politics in the past year, backing environmentalist Democrats such as Massachusetts Sen. Ed Markey and Virginia gubernatorial candidate Terry McAuliffe.

Steyer’s support for the University of Texas came by way of the Environmental Defense Fund, which helped finance the study. He and his wife Kat Taylor are listed among individuals who provided “major funding for the EDF’s 30-month methane research series, including their portion of the University of Texas study.”

[…]Thanks in large part to fracking, energy-related carbon dioxide emissions in 2012 were the lowest in the U.S. since 1994, at 5.3 billion metric tons. With the exception of 2010, emissions have declined every year since 2007.

Back in May 2013, Associated Press reported that the EPA had already lowered their estimates before this study completed.

Excerpt:

The new EPA data is “kind of an earthquake” in the debate over drilling, said Michael Shellenberger, the president of the Breakthrough Institute, an environmental group based in Oakland, Calif. “This is great news for anybody concerned about the climate and strong proof that existing technologies can be deployed to reduce methane leaks.”

The scope of the EPA’s revision was vast. In a mid-April report on greenhouse emissions, the agency now says that tighter pollution controls instituted by the industry resulted in an average annual decrease of 41.6 million metric tons of methane emissions from 1990 through 2010, or more than 850 million metric tons overall. That’s about a 20 percent reduction from previous estimates. The agency converts the methane emissions into their equivalent in carbon dioxide, following standard scientific practice.

So there’s no harm to the environment, but about the economics benefits of fracking? Well, when states have embraced fracking, their economies have greatly benefited.

Here’s what happened when North Dakota lowered its regulatory barriers to energy development.

This:

North Dakota had the highest payroll-to-population rate (P2P) and the lowest underemployment rate in 2012, thanks mostly to the state’s booming oil & gas industry.

According to Gallup’s “State of the States” analysis released today, North Dakota ranked number one among the lower 48 states, with a payroll to population rate of 53.6 percent.

Gallup said it measured each state’s P2P rate by the percentage of the adult population aged 18 and older employed full-time by an employer for at least 30 hours per week.

The analysis noted that the numbers are not seasonably adjusted and variations across states reflect a number of factors, including the overall employment situation for each state as well as the demographic composition of that state’s population. P2P rates in Alaska, Hawaii, and the District of Columbia were not considered in the analysis.

Factoring in the most recent unemployment data is key to the Gallup analysis. North Dakota reported just a 3.2 percent unemployment rate, well below the national average unemployment rate of 7.9 percent, according to the U.S. Bureau of Labor Statistics.

The number one ranking should not come as much of a surprise given the Peace Garden state’s rise in oil and gas production and the subsequent rise in jobs over the past few years.

According to North Dakota Jobs Service data from 2011, the most recent available, the number of oil and gas jobs in North Dakota has risen 57.5 percent since 2010 – going from 10,660 jobs in 2010 to 16,786 jobs in 2011, with the oil and gas payroll nearly doubling — going from $852 million in 2010 up to $1.5 billion in 2011.

North Dakota now produces more oil than any other state, including Alaska, which ranked number one in 2011, according to the U.S. Energy Information Administration.

In New York, Chesapeake Energy just decided to pull up stakes and leave the state.

Excerpt:

After more than five years of a fracking moratorium, a leading energy company walks away from its leases, leaving New York, its natural gas riches — and the jobs and wealth they could generate — unrealized.

In 2000, people from Chesapeake Energy began arriving in Broome County, New York, a few miles north of the Pennsylvania border. Broome had seen better economic days but was lucky to be sitting right atop the natural gas-rich Marcellus Shale formation, which stretches through much of the Northeast.

[…]Interestingly, New York’s very own Department of Environmental Conservation website on Marcellus drilling says, “No known instances of groundwater contamination have occurred from previous horizontal drilling or hydraulic fracturing projects in New York.”

A recent Department of Energy study has concluded that fracking chemicals do not taint drinking water.

After a year of monitoring wells in western Pennsylvania, researchers found these fluids stayed thousands of feet below the areas that supply drinking water.

A 2010 Pennsylvania Department of Environmental Protection report concluded that “no groundwater pollution or disruption of underground sources of drinking water have been attributed to hydraulic fracturing of deep gas formations.”

But Pennsylvania allows fracking, and they are seeing the same economic boom as North Dakota:

A recent study by the Manhattan Institute highlighted the economic impact of fracking in New York’s neighbor to the south, Pennsylvania, which has had 5,000 wells fracked since 2002.

The data are compelling, as counties with more than 200 wells, drilled between 2007 and 2011, saw a 19% increase in per-capita incomes, versus just 8% income growth for those with no wells fracked.

Further, the number of county jobs grew by 7% in those with more than 200 wells fracked, against a 3% contraction in counties with no wells drilled.

According to the Manhattan Institute’s Diana Furchtgott-Roth, “Income of residents in the 28 New York counties above the Marcellus Shale has the potential to expand by 15% or more over the next four years if the state’s moratorium is lifted.”

In Pennsylvania, according to the report, each well in the Marcellus Shale formation creates $5.5 million in direct economic benefits and 62 jobs, and the wells endanger no one. Pennsylvania’s Department of Labor and Industry estimates that fracking in its part of the Marcellus created 72,000 jobs from the fourth quarter of 2009 to the first quarter of 2011, as New York’s job- and growth-killing moratorium got underway.

Now tell me again why progressives are supposedly smarter than conservatives.

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New EPA report: natural gas production is even cleaner than previously thought

From the liberal Associated Press. (H/T Hot Air)

Excerpt:

The Environmental Protection Agency has dramatically lowered its estimate of how much of a potent heat-trapping gas leaks during natural gas production, in a shift with major implications for a debate that has divided environmentalists: Does the recent boom in fracking help or hurt the fight against climate change?

Oil and gas drilling companies had pushed for the change, but there have been differing scientific estimates of the amount of methane that leaks from wells, pipelines and other facilities during production and delivery. Methane is the main component of natural gas.

The new EPA data is “kind of an earthquake” in the debate over drilling, said Michael Shellenberger, the president of the Breakthrough Institute, an environmental group based in Oakland, Calif. “This is great news for anybody concerned about the climate and strong proof that existing technologies can be deployed to reduce methane leaks.”

The scope of the EPA’s revision was vast. In a mid-April report on greenhouse emissions, the agency now says that tighter pollution controls instituted by the industry resulted in an average annual decrease of 41.6 million metric tons of methane emissions from 1990 through 2010, or more than 850 million metric tons overall. That’s about a 20 percent reduction from previous estimates. The agency converts the methane emissions into their equivalent in carbon dioxide, following standard scientific practice.

The EPA revisions came even though natural gas production has grown by nearly 40 percent since 1990. The industry has boomed in recent years, thanks to a stunning expansion of drilling in previously untapped areas because of the use of hydraulic fracturing, or fracking, which injects sand, water and chemicals to break apart rock and free the gas inside.

Wow, when you have the EPA on board with responsible energy development, then you know it’s solid.

See my previous post in which I talked about how the EPA had exonerated fracking in Dimock, Pennsylvania.

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Fracking propels North Dakota to 3.2% unemployment rate

What happened when North Dakota lowered its regulatory barriers to energy development?

This:

North Dakota had the highest payroll-to-population rate (P2P) and the lowest underemployment rate in 2012, thanks mostly to the state’s booming oil & gas industry.

According to Gallup’s “State of the States” analysis released today, North Dakota ranked number one among the lower 48 states, with a payroll to population rate of 53.6 percent.

Gallup said it measured each state’s P2P rate by the percentage of the adult population aged 18 and older employed full-time by an employer for at least 30 hours per week.

The analysis noted that the numbers are not seasonably adjusted and variations across states reflect a number of factors, including the overall employment situation for each state as well as the demographic composition of that state’s population. P2P rates in Alaska, Hawaii, and the District of Columbia were not considered in the analysis.

Factoring in the most recent unemployment data is key to the Gallup analysis. North Dakota reported just a 3.2 percent unemployment rate, well below the national average unemployment rate of 7.9 percent, according to the U.S. Bureau of Labor Statistics.

The number one ranking should not come as much of a surprise given the Peace Garden state’s rise in oil and gas production and the subsequent rise in jobs over the past few years.

According to North Dakota Jobs Service data from 2011, the most recent available, the number of oil and gas jobs in North Dakota has risen 57.5 percent since 2010 – going from 10,660 jobs in 2010 to 16,786 jobs in 2011, with the oil and gas payroll nearly doubling — going from $852 million in 2010 up to $1.5 billion in 2011.

North Dakota now produces more oil than any other state, including Alaska, which ranked number one in 2011, according to the U.S. Energy Information Administration.

Hydraulic fracturing, or “fracking” which uses high-pressure water, sand, and chemicals to force oil from underground rock formations, has largely contributed to the recent boom in North Dakota’s fossil fuel industry.

North Dakota, as you might expect, is a very, very conservative state.

What about the US as a whole, under Barack Obama and the Democrats? Well, Obama killed the Keystone XL pipeline, which would have created 20,000 jobs. His administration has introduced many burdensome regulations on energy development, as well. Democrat energy policies have been a disaster, and it explains, in part, why we have a huge number of people not in the work force. We could have allowed North Dakota’s success to spread across the United States, if we had only approved that pipeline and removed barriers to energy development imposed by high taxes and regulations. But we didn’t. There’ll be another chance to vote for jobs in 2016.

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EPA study finds that water in Dimock, PA is safe to drink despite fracking

Here’s an excerpt from the EPA press release that exonerates fracking:

 The U.S. Environmental Protection Agency announced today that it has completed its sampling of private drinking water wells in Dimock, Pa. Data previously supplied to the agency by residents, the Pennsylvania Department of Environmental Protection and Cabot Oil and Gas Exploration had indicated the potential for elevated levels of water contaminants in wells, and following requests by residents EPA took steps to sample water in the area to ensure there were not elevated levels of contaminants. Based on the outcome of that sampling, EPA has determined that there are not levels of contaminants present that would require additional action by the Agency.

[…]Overall during the sampling in Dimock, EPA found hazardous substances, specifically arsenic, barium or manganese, all of which are also naturally occurring substances, in well water at five homes at levels that could present a health concern. In all cases the residents have now or will have their own treatment systems that can reduce concentrations of those hazardous substances to acceptable levels at the tap. EPA has provided the residents with all of their sampling results and has no further plans to conduct additional drinking water sampling in Dimock.

The Washington Times explains the context of this report.

Excerpt:

Closely watched tests by the Environmental Protection Agency have found that the drinking water in Dimock, Pa., is safe to drink, despite concerns from some residents and environmentalists that nearby fracking had contaminated supplies.

For the past seven months, EPA sampled water at private wells serving 64 homes in the small northeastern Pennsylvania town, the primary setting of the anti-natural-gas documentary “Gasland.”

EPA found hazardous substances such as arsenic and manganese in water supplies at five of the homes in question, but said Wednesday that the residences have or will soon have treatment systems “that can reduce concentrations of those hazardous substances to acceptable levels at the tap.”

Agency officials also said EPA will conduct no further testing and will stop delivering fresh water to Dimock residents.

“The sampling and an evaluation of the particular circumstances at each home did not indicate levels of contaminants that would give EPA reason to take further action,” EPA Regional Administrator Shawn M. Garvin said in a statement. “Throughout EPA’s work in Dimock, the agency has used the best available scientific data to provide clarity to Dimock residents and address their concerns about the safety of their drinking water.”

[…]In its Wednesday announcement, EPA made clear that the pollutants it identified occur naturally in the area.

Remember the EPA is one of the most politicized, anti-business agencies in the government. If I were President, the first two agencies I would eliminate are the EPA and the federal Department of Education. And yet even the EPA could not find anything wrong with fracking. That means that there is nothing wrong with fracking.

Why do people think that secular leftists are guided by reason and science? It seems to me that they are always embracing fashionable nonsense that isn’t proven out by the experimental data. Let’s make our policy based on what the experimental evidence shows.

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