3 ways we're botching the US oil boom
These mistakes are creating the worst energy policy that the myopic environmentalists and short-sighted industry executives can buy.
We just can't seem to keep up with the energy revolution in this country. It's happening too fast. But because of the velocity of change and the lack of interest in Washington, D.C., about what to do with it, the increases have had very little impact beyond job creation in a handful of states.
What do I mean by the velocity of change? Three years ago, North Dakota was producing 350,000 barrels of oil per day. The projections by all but the most wild-eyed of oil people, namely Harold Hamm from Continental Resources (CLR), was that this production number could double over the next four to seven years.
Last month, oil production hit 1 million barrels a day. North Dakota has now left California and Alaska in the dust with its astounding output.
The boom has made North Dakota one of the richest states in the union. It has brought unemployment down to 3 percent, and the average wage earner in the patch brings home more than $90,000 a year.
That's huge, but more important, perhaps, is that the surge is totally unexpected, and therefore -- because of no coordination whatsoever and a total hands-off policy on fossil fuels by the administration -- this bounty has meant not much at all to the country. We know that now more than ever, because we know the price of gasoline in our country is going to spike and spike badly if the southern Iraqi oil fields are taken by the radical rebels of ISIS.
It's not all on Washington. The infrastructure to use all of the oil isn't ready, because of a combination of speed and disbelief.
First, 63 percent of the oil is shipped by the ridiculously inefficient and dangerous rail cars instead of pipelines. You can lay pipe fast and the average pipe layer makes $63,000. A pipeline job requires thousands of people.
But because of spills and a fractured political environment, pipelines in non-oil states take a tremendous amount of political will to build, and the pipeline companies aren't run by politicians, they are run by pipeline people. The populace seems split among people who want the oil flow stopped in its tracks, those who want very limited pipe building, and those who grudgingly accept it.
The result? We end up shipping it by rail to do an end-run around the mess.
Second, because so few people saw the revolution coming, the power system is totally misconfigured. As anyone who has been to North Dakota can tell you, there's more natural gas just being burned off than used. Much more. Flaring, the by-product of the more than 10,000 wells, is a huge environmental problem. The gas needs to be shipped by pipeline to where it can be used. Yet the energy situation in North Dakota shows how truly screwed up things are, as 79 percent of its power comes from coal!
Third, the one bit of long-range planning the oil and gas industry seemed to do during this period was build refinery capacity in the Gulf to handle the thicker, more noxious Canadian tar sands oil. But North Dakota's oil is of much higher quality. We don't have the refinery capacity to handle it. That's partly why Iraq matters more than North Dakota to gasoline. Now, it is possible, you could say, that some greens want it this way. It keeps gasoline prices higher, which makes for a more environmentally friendly regime.
But it also makes for a less energy-independent regime, thus making our involvement in Iraq much more problematic and necessary for our energy security and for our economy. No one in the government has sat down with anyone in the industry, at least visibly, and tried to figure out how to harness the natural gas and oil we have to make us independent. That's how thick the hatred is for fossil fuels, particularly among Democrats in Washington.
So, in the end, North Dakota gets a lot of jobs, the oil gets lost in the system and we care more about Basra than Bismarck. The hardcore oil and gas haters seem not even to care about this trade-off. And that's why the million-barrel mark means almost nothing to our nation unless you are looking for a job in the Bakken or Williston basins.
This is the worst energy policy that the myopic environmentalists and short-sighted industry executives can buy.
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It's really scary. Because of pols and tree huggers we are pissing away jobs and suffering the from the "Law of Ill-advised Intended Consequences".
HE WANTS MUSLIMS AND MEXICANS!!!!!!!!!!!!!!!!!!!!!!!!!!!
MORE LIBS TO SINK THE COUNTRY!!!!!!!
- Two senators unveiled a bipartisan plan Wednesday to raise federal gasoline and diesel taxes for the first time in more than two decades, pitching the proposal as a solution to Congress' struggle to pay for highway and transit programs.
The plan offered by Sens. Chris Murphy, D-Conn., and ,Bob Corker R-Tenn., would raise the 18.4-cents-a-gallon federal gas tax and 24.4-cents-a- gallon diesel tax each by 12 cents over the next two years, and then index the taxes to keep pace with inflation. The increase would be applied in two increments of 6 cents each.
HERE COMES THE PART WHERE WE GET SCREWED THE REST OF THE WAY
Say, Jimmie Boy, I see the Canadians took the $7.2BB offer from Enbridge just yesterday to build a CANADIAN Pipeline-ostensibly to boost their Own Export Income, as Obama sits around today dividing up the Pacific Ocean to-what was it he's doing-trying to prevent the Japanese from consuming more Sushi????? Instead of promoting our energy Exports and that other old and arcane concept-at least at CNBC-JOBS!!!!!
"ridiculously inefficient and dangerous rail cars"
Ha Ha........... Bobo is busting his hero Warren's balls on railroad transport. You can't talk without putting your foot in your mouth.
This is a very good article. Good job Jim.
Can you run an electric power generating plant with natural gas instead of coal?
Who's that man behind the curtain,
It isn't the Wizard of Oz, it's Warren Buffett
Months after Buffett and his Baboons buy Nevada Energy or "Nevada Power"
the "Board Governing the Use of Electricity" or "Public Utilities Commission" is given a proposal from Nevada Energy to place a bill on Nevada's Books.
This bill would challenge the present statue stating in short : "Home Owners with Solar Panels"
who are receiving a deduction in their "Cost of Electricity" would now be FINED for
creating a disadvantage for non-solar homes and that this practice must stop..
Thus disallowing any benefits for having or installing "Solar Panels" on future homes..
Solar Power in the Western States would SAVE AMERICA ..
Warren Buffett and his Goons will not allow this to happen without a fight..
Hey Beav.......... If Obama is so great like you say why is his ratings on a one way ticket to crapville? It must be some Democrats have wised up since no republican ever thought much of him.
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The idea of US crude being a shelter from turmoil abroad may not be as far fetched as it seems.
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