US to become world's largest gas and oil producer

The fracking boom could move the country into first place as early as this year, according to a government agency. But how long will it last?

By Benzinga Oct 8, 2013 1:34PM

Natural gas tanks at a site in North Dakota (© Rich LaSalle/The Image Bank/Getty Images)By Jim Probasco


The U.S. could become the world's largest single producer of oil and natural gas this year, the Energy Information Administration said Friday.


This flies in the face of much conventional wisdom that most of the world’s fossil fuels come from Russia and the Middle East. Conventional wisdom, in this case, hasn’t been correct for a while. The United States surpassed Russia in the production of petroleum and gas fuels in 2012. It only lagged behind Saudi Arabia in oil.


Thanks to hydraulic fracturing (fracking), the U.S. will move into first place in 2013. At that point, the country will be the world leader in both gas and oil production.


As the EIA pointed out, comparing oil and gas production in different countries is difficult. Energy content differences, the inclusion (or exclusion) of biofuels and refinery gains as well as other factors all play a role.


The prime driver of the increase in U.S. production over the past five years has been the extraction of shale-based oil reserves in Texas and North Dakota via fracking. Natural gas production has seen an increase due to fracking-based production in Pennsylvania and other parts of the eastern U.S.


There is no question that the United States will be the top oil and gas producer by the end of 2013. But, how long will it all last? In 2012, the EIA said U.S. natural gas reserves would last about 92 years, at current rates of consumption.


This, of course, doesn’t mean that the rate of production will remain constant. Production rates are a product of available technology and the cost of developing that technology. Profitability is also a major factor.


Public sentiment is another. Fracking is controversial. Coinciding with the EIA report that the United States would soon be the world’s number one energy producer was one from an environmental group calling for a complete ban on fracking.


Environment America’s report, Fracking by the Numbers, is filled with statistics related to fracking in the U.S. For example, the report said fracking produced 280 billion gallons of toxic wastewater in 2012, along with 45,000 tons of air pollution and 100 million metric tons of CO2-equivalent global warming pollution.


The Wall Street Journal reported on a Pew Research Center for the People and the Press poll in September that found opposition to fracking rose from 38 to 49 percent in six months.


So far, however, companies seem to be forging ahead with financing and production of both oil and gas in the United States.


As Ken Hersh, chief executive of NGP Energy Capital Management LLC, told The Wall Street Journal, "It is not a supply question anymore. It is about demand and the cost of production. Those are the two drivers."


Top companies with a stake in U.S. oil and gas production, such as C&J Energy Services (CJES), The Carlyle Group LP (CG), and US Silica Holdings (SLCA), hope Hersh is right.


At the time of this writing, Jim Probasco had no position in any mentioned securities.


Read more from Benzinga

74Comments
Oct 8, 2013 4:21PM
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What a joke. Too bad the US consumers will not benefit from it because we will also export more then we ever have so good ole Wall Street and Big Oil can keep raping the consumers at the pump.
Oct 8, 2013 9:10PM
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Will it mean lower prices ... I don't think so ... US oil companies will make a killing ... what is the benefit for Americans ... nothing.
Oct 8, 2013 4:10PM
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This is terrible news for Obama. He has tried every which way to hamper the energy business, except for that old reliable wind and solar energy, and , criminally,wasted billions of dollars on that BS.  Working with Obama/Reid is like playing chess with pigeons. Obama lands on the chess board and schitts all over it, and then prances around yelling I won, I won! 
Oct 8, 2013 6:48PM
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And on a side note, Our local electric provider is currently attempting to up- charge

FOR A SOLAR TAX         

Make up my mind, are we going with nuclear with  tax, or solar with tax ?
Oct 8, 2013 6:32PM
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IS THAT LIKE """DRILL BABY DRILL""" ?

Canada drilled their way out of a recession         LOL

Those evil people that want to keep our economy ""FUELED""    How dare them !
Oct 8, 2013 10:55PM
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Haven't built a refinery in 20 years. Don't plan on any either(to my knowledge). The Keystone pipeline is for EXPORT. Now, tell me again about all that cra* making us "energy independent".
Oct 8, 2013 5:59PM
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My problem is with fracking ,when ground water ignites in areas where fracking occurs ,That is not a good thing. Pretty soon ,if this continues, water will take the place of gas and cost us $4.00/gallon.

And don't think this can't happen .Water is far more precious than gasoline or natuarl gas,Ask the people in Pensylvania,where fracking is going on .

Oct 8, 2013 9:00PM
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Biggest pipe dream (no pun intended) and fallacy under this administration. Never happen. This country loves putting square pegs in round holes. You can scratch off things that make sense.
Oct 9, 2013 9:50AM
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We need to turn this into a long term strategy to move out of the middle east.  The only reason we're there militarily is because of oil.  They've been fighting amongst themselves for 100's of years, our involvement there is useless.  In addition we need to take Wall Street out of the mix, that's the reason oil/gas is so high in the first place.  They drum up all kinds of fear in the market which causes prices to skyrocket, & who gets rich because of that, Wall Street - us consumers always lose!
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The story should be tittled "US NUMBER ONE ENERGY USER IN THE WORLD"!...
Oct 8, 2013 3:18PM
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close the E.P.A.  Bunch of damned comunists!

Oct 9, 2013 11:34AM
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Great, more contaminated water and enormous sink holes all over America. Just what we need.
Oct 9, 2013 4:27AM
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If this is really true then why are our gas prices so high????? BECAUSE WE GIVE IT ALL TO CHINA!!!!!!!! Hey dummy that calls himself president. Stop tearing our country apart , get off your sorry dead **** and quit supporting other countries. Take care of business here and then say how great you are!

NOT!!! we need to tell the world to kiss off and get OUR country great again. Stop the stupidity fom the white house and his supporters.

Oct 9, 2013 6:54AM
Oct 8, 2013 7:46PM
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Now the tree humping lunatic liberals will be whining and convulsing.
Oct 9, 2013 7:09AM
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This is largely due to private industry getting dirty and keeping us working in the right direction. Seems that those who do not have shares are most likely not in support, but really is good business for the USA collectively as a whole.
Oct 9, 2013 9:32AM
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Great, just another reason to let the huge oil cartels do whatever the hell they want, they basically have free reign of this country thanks to the greed set for by previous administrations.  Hopefully, one day soon, you "people" will see how truly screwed this country has become.  But that is like trying to stop the sun from setting.
Oct 9, 2013 1:49PM
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Oil... gotta love that stuff.  It's in our cars, our smartphones, our sporting equipment, our medical equipment, our public transportation, our homes, our schools... The list could keep going and going.

 

So what if we found new ways of extracting the stuff?  Fracking, we are not the only country using this technique.  Take a look at South America and Africa.  We need to find clean ways for producing things from said oil.  The old refineries need to be torn down and new ones built to EPA spec and not just patched up-to-code.  Old oil rigs in the sea needs to be torned down and rebuilt with new tech else would would have more BP/Gulf of Mexico issues because of cheap patches here and there to be up-to-code.

 

But, hey, what do I know.  I'll just type way on my oil-base plastic keyboard and stare blankly at my mostly oil-base plastic display.

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