THE TECHNOLOGY DRIVEN OIL BOOM? This surge in domestic production would leave Iran, Kuwait and the Arab emirates combined in the rear-view mirror”

July 16, 2011
A US oil boom — unless greens abort it – By ARTHUR HERMAN

Just a year after the BP oil spill, America is on the verge of a new golden era of oil exploration and production — unless President Obama and his environmentalist friends get their way.

This surge in domestic production would leave Iran, Kuwait and the Arab emirates combined in the rear-view mirror.
The US drilling boom rests on a technique called hydraulic fracturing, or fracking, to open shale-oil reserves. It’s why wells are springing up in places like North Dakota, California and Pennsylvania, with thousands of new jobs in their wake.
Fracking has also opened up supplies of natural gas, sending prices plummeting. Now, even New York’s regulators have recommended lifting the state’s ban on the fossil-fuel gold rush that’s pushed North Dakota’s unemployment rate to 3.2 percent — the lowest in the nation.
The irony is that Obama had hoped higher oil prices would make us all drive electric cars and install backyard windmills. Instead, they’re making it profitable for US companies to expand the hunt for new reserves and to use fracking to reopen old ones.
Just last month, Exxon-Mobil announced the discovery of a vast field in the Gulf of Mexico, with as many as 700 million barrels waiting to be tapped. Other companies are using fracking to return to the Texas basin, the center of US oil production in the 1930s — which will mean millions in investment and thousands of jobs for that state. Montana and North Dakota are sitting on a shale-oil formation that could yield nearly 4 billion barrels.
Not many Americans realize we are already the world’s No. 3 oil producer, at 7.5 million barrels a day. The coming boom should add another 1.5 million by 2015. That’s closing in on Saudi Arabia’s daily total.
And oil-shale rich Canada could surpass Iran’s barrel-per-day output in a few years — so we’re looking at a major shift in the geopolitics of oil.
Easy-to-find oil is running out in the Mideast. After deliberately wrecking a multibillion-dollar deal with BP, Russia — the world’s biggest oil and gas producer — is looking more and more like a bad bet for foreign investors. If you want to make money in the oil biz, America will be the place to go.
But the environmental lobby is bent on preventing it — waging an all-out war on fracking, claiming (against all evidence) that it contaminates ground water. The ideologues hope to use memories of the BP spill and a more recent one on the Yellowstone River to dam up all exploration and pipeline construction.
Never mind that fracking goes on thousands of feet below groundwater sources, and that Obama’s moratorium on offshore drilling did more damage to the Gulf economy than the BP spill ever did — or that the Yellowstone accident has affected an area of less than 10 miles on the edge of a national park of 3,500 square miles.
The promise of prosperity and jobs was enough to get even a blue state like New York to ignore the green lobby’s fearmongering. But Obama may yet derail the boom.
The president has had the oil industry’s two most important tax incentives — the percentage-depletion allowance and the deduction for intangible-drilling costs — in his cross hairs for a long time.
Both help oil and drilling companies recoup the heavy capital investment they need to look for oil, even when they turn up nothing. The White House argues that we must end both “tax breaks for Big Oil” to close the budget deficit.
This is nonsense. Manhattan Institute oil guru Robert Bryce notes that the entire value of the industry’s tax advantage comes to $4.4 billion a year. The notion that scrapping tax abatements that have been around since the 1920s will put a dent in a deficit of $1.4 trillion is laughable — and dangerous.
Besides, those few billions in savings would be washed away in rising oil prices if the impending rebirth of the US oil industry is aborted.
So there’s more at stake in the debt-ceiling impasse than just how we pay for our government. It’s also about whether America will dictate its own energy and economic future — or whether it’s left in the hands of sheiks, dictators and the EPA.

Arthur Herman is a visiting scholar at the American Enterprise via ibloga.blogspot.com


Gulf of Mexico oil spill: BP sues Transocean for $40bn

April 22, 2011
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BP said safety systems on Transocean’s Deepwater Horizon rig had failed.
Separately, BP also sued the maker of the rig’s blowout preventer, alleging the device failed to stop the huge oil spill that followed the explosion.
Both lawsuits were filed on Wednesday on the first anniversary of the explosion, which killed 11 workers.
Overnight on 20 April 2010, Transocean’s Deepwater Horizon burst into flames while drilling a well for BP.
In the months that followed, more than 200 million gallons (780 million litres) of oil flowed in the Gulf of Mexico from the well, soiling hundreds of miles of coastline in the worst US oil spill in recent history.
In federal court in New Orleans on Wednesday, BP said Swiss-based Transocean and Cameron International, the Houston company that supplied the blowout preventer (BOP), should help it pay for tens of billions of dollars in liabilities resulting from the spill, which include clean-up and compensation costs.
BP also wants the court to declare that Cameron caused or contributed to the disaster.
“The Deepwater Horizon BOP was unreasonably dangerous, and has caused and continues to cause harm, loss, injuries, and damages to BP (and others) stemming from the blowout of Macondo well” and resulting spill, the BP lawsuit said.
Cameron has filed counter-claims and defended the integrity of its products. Transocean did not immediately comment on the BP lawsuit but has also requested court judgements against BP, Cameron and others.
BP has estimated its liability at $40.9bn, but could face tens of billions more in fines and penalties.

it is important to find the real cause of this disaster. I support petroleum, but it is important that this kind of disaster is diverted in the future. I feel the same way about other forms of energy development.


Obama Making Oil Recovery Harder by rejecting Dutch Cleanup Help

June 10, 2010

Heritage Foundation
Five weeks ago Escambia County officials requested permission from the Mobile Unified Command Center to use a sand skimmer, a device pulled behind a tractor that removes oil and tar from the top three feet of sand, to help clean up Pensacola’s beaches. County officials still haven’t heard anything back. Santa Rosa Island Authority Buck Lee told The Daily Caller why: “Escambia County sends a request to the Mobile, Ala., Unified Command Center. Then, it’s reviewed by BP, the federal government, the U.S. Army Corps of Engineers and the Coast Guard. If they don’t like it, they don’t tell us anything.” Keeping local governments in the dark is just one reason why the frustration of residents in the Gulf is so palpable. State and local governments know their geography, people, economic impacts and needs far better than the federal government does. Contrary to popular belief, the federal government has actually been playing a bigger and bigger role in running natural disaster responses. And as Heritage fellow Matt Mayer has documented, the results have gotten worse, not better.
And when the federal government isn’t sapping the initiative and expertise of local governments, it has been preventing foreign governments from helping. Just three days after the Deepwater Horizon explosion, the Dutch government offered to provide ships outfitted with oil-skimming booms and proposed a plan for building sand barriers to protect sensitive marshlands. LA Gov. Bobby Jindal (R) supported the idea, but the Obama administration refused the help. All told, thirteen countries have offered to help us clean up the Gulf, and the Obama administration has turned them all down.
According to one Dutch newspaper, European firms could complete the oil spill clean up by themselves in just four months, and three months if they work with the United States, which is much faster than the estimated nine months it would take the Obama administration to go it alone. The major stumbling block is a protectionist piece of legislation called the Jones Act which requires that all goods transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens. But in an emergency this law can be temporarily waived as DHS Secretary Michael Chertoff did after Katrina. Each day our European allies are prevented from helping us speed up the clean up is another day that Gulf fishing and tourism jobs die.
And then there are the energy jobs that the Obama administration is killing with its over-expansive ban on offshore energy development. Experts–who were consulted by Interior Secretary Ken Salazar before he issued his May 27 report recommending a six-month moratorium on all ongoing drilling in waters deeper than 500 feet–now tell The New Orleans Times-Picayune that they only supported a six-month ban on new drilling in waters deeper than 1,000 feet. A letter from the experts protesting the use of their names to support a ban they actually oppose reads: “A blanket moratorium is not the answer. It will not measurably reduce risk further and it will have a lasting impact on the nation’s economy which may be greater than that of the oil spill. We do not believe punishing the innocent is the right thing to do.”
And just how many innocent jobs is Obama’s oil ban killing? An earlier Times-Picayune report estimated the moratorium could cost Louisiana $2.97 billion in revenue and 7,590 jobs directly related to the oil industry. President Obama still has the power to save many of the jobs. He could reverse his decision and lift the ban. But political considerations make that impossible. According to the Center for Responsive Politics, the President was the largest single recipient of campaign contributions from BP and its employees over the past twenty years. Therefore, the President has to put distance between himself and BP, which may be why President Obama has not spoken with BP CEO Tony Hayward one single time since the Deepwater Horizon rig exploded in April. The problem is, vilifying BP’s corporate leadership does nothing to stop the spill or quicken the cleanup.
After the Obama administration refused help from the Netherlands, Geert Visser, the consul general for the Netherlands in Houston, told Loren Steffy: “Let’s forget about politics; let’s get it done.” It’s sound advice, Mr. President. Let’s free local governments to clean up their shores, waive protectionist laws that keep out foreign help, and let the oil workers who can safely do so get back to work. Let’s get it done.

Decreasing Defense No Solution for Debt Disaster

QUICK HITS

The Democratic Party will launch a national cable television ad campaign today daring Republicans to repeal health care.
A new report by the Troubled Asset Relief Program’s Congressional Oversight Panel blasts the Federal Reserve and the Treasury for creating the too-big-to-fail problem by bailing out AIG.
Federal Reserve Chairman Ben Bernanke testified yesterday that Congress must prepare to address an “unsustainable” level of debt in the federal budget.
As part of their stepped up campaign of assassinations, the Taliban executed a seven-year-old boy in southern Afghanistan after accusing him of spying for the government.
President Obama urged the Israeli government to loosen its blockade of Gaza and promised a $400 million aid package for the West Bank and Gaza.