It's a shame about our energy policy

At least one other huge shale may be out there, yet the government remains unsupportive of natural gas.

By Jim Cramer Jan 31, 2013 9:51AM

thestreet logoUS Capitol Donovan Reese Getty ImagesIn the U.S. there could be not just one, but maybe two huge oil shales that we don't even know about yet -- and Core Labs (CLB) is doing the work to find out how big they will be.

Wednesday night on my Mad Money show, Core Labs CEO David Demshur said we aren't yet discovering the big shales in this country.

Core Labs is the most profitable oil service company, if you go by the return on investment metric, and some major clients are studying its results right now in order to see if these two prospects could be as bountiful as the Eagle Ford or the Bakken.

The Eagle Ford is drawing comparisons to Saudi Arabia by EOG Resources (EOG), the biggest factor in the field. Continental Resources (CLR), the most aggressive driller in the Bakken, analogizes that field to Prudhoe Bay. Demshur says he's confident that at least one of these new shales will be equal to the scale of those gigantic fields. It's another U.S. game-changer -- maybe two -- and it will be electrifying for whoever owns these fields. This, of course, remains a secret, as Core is not allowed to disclose for whom it is working.

Demshur ought to know: His company maps out reservoirs and figures out how much gettable oil there is under the ground. You would bring in Core if you thought you had something huge and imminent. I sense we will be learning about these fields within the year, after the clients buy up as much land as possible around them in order to be sure the acreage will be worthwhile. As soon as Demshur told me about this, I had two thoughts in mind. One is that our country has far more recoverable oil in it than anyone thought it did five years ago.

Second, because President Obama doesn't want to be identified with any fuel that isn't renewable, this kind of find most likely won't mean much to anyone except for the shareholders of the companies that finds the oil.

In another country, the nation's leader would be trying to figure out how to get more people to work on this kind of project, how to bring it to market quickly, how to get the price of gasoline lower with it and how to redo the defense budget in order to configure the possibility of energy independence. He or she might even have a task force that deals exclusively with new oil finds.

But the processes of even exploring and producing oil are antithetical to the ethos of many environmentalists, because they feel strongly that anything that depresses the price at the pump is something that will create more pollution. I believe the president shares those concerns above all others. Witness the emphasis he placed on climate control in his inaugural speech. The other imperatives -- national security, affordability, jobs, account balances -- are all trumped by this environmental gospel.

It's a significant roadblock when even cleaner fossil fuels like natural gas don't get considered in the mix of what could go right in this country.

I know, I know -- the market's taking care of it. The market's working. We will all make money if we can figure out whom to back and how long to back them.


But if we had an energy policy that was above the market's greedy hands and integrated new finds like what Demshur is talking about, we could fundamentally change the budget of the nation and the creation of new jobs.

I can just imagine a motivated energy secretary calling the president of another country saying, "We have to harness all of this oil coming in and bring the heads of private industry in here to figure out what we can accomplish as a nation with this bounty." We did not have that kind of energy secretary in the first Obama term. I bet the second secretary won't be any more enthused with these prospects, and that those prospects will be ignored.

Anyway, right now these two plays are well-kept secrets. Let's see if we hear the names of any new shales during the upcoming reporting period.

They might just be the next Bakken or the next Eagle Ford, and we may have the next Continental Resources or EOG on our hands and we don't even know it yet. In the meantime, it just might pay right now to bet on Core Labs. It's got the best return on investment of all service companies. It's also racking up huge contracts from the government of Mexico, which is finally putting its reserves to work -- and Demsure has got a colossal amount of Iraq business now that that country has unleashed its land to big oil companies.

It's good to know there are some winners here. I just wish the public -- the ones who don't own the stocks -- could get a chance to win, too, with lower oil prices and a more rational distribution of jobs. Instead folks must suffer amid huge job-wanted geographies and a much bigger no-jobs section of the country, with no government to change the picture for the positive.

 

Cramer's face

 


Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.

 

 

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47Comments
Jan 31, 2013 11:02AM
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Energy policy is dictated by the same things as farming policy, health care policy and every other policy; big business, campaign donors and lobbyists.  Corruption is one and only thing that matters, fix it and see the country rebound, fail to and see it death spiral.
Jan 31, 2013 10:36AM
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What energy policy ???? The USA does not have one . Only lobbyist in Congress , the best money can buy....Only in the USA...
Jan 31, 2013 12:20PM
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Obama does not support anything that benefits this country. He is a deceptive class divider and manipulator that preys on the naive and ignorant which is, unfortunately, the majority of Americans.  
Jan 31, 2013 11:41AM
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The Public will never win.  Do you folks see the unbelievable amounts of cash these Internationals are now hoarding.  They have been given a free pass to completely gorge themselves on the backs of the American middle class and were never asked to contribute anything back.  This coddling must tell us more about the plan for the New World Order.  They have so much money stuffed everywhere you gotta ask yourselves why.  You know the meetings where these CEO's meet every year to collude and make a game plan on how best to lower wages and escape taxes.  No I guess I must be weird or something to concern myself with why.  Because they are clearly busting labor over the entire world.  Thye can hire Zero folks and prosper quite well thank you.  This is not going to be just a waiting out period it is a proactive assault from many different sides as they first smash any resistence and then set in place International laws that will carry them forward through years to come.  You and I are merely being appeased with fiat inflated dollars as they finish readying the noose for the necks of all the workers of the world.  You see it is no longer about America that they will control, it will be the world. JMHO
Jan 31, 2013 10:56AM
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OPEC sets the prices and the world producers are fine with that. 

 

we'll never see the price at the pump go down regardless of how much oil is produced in USA. 

 

we're already the largest exporter in the world. 

 

meanwhile, be aware that "WE" do not own the oil. 

 

we simply pay for it in cash and war death lives. 

Jan 31, 2013 12:24PM
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It doesn't matter if we use the domestic production to reduce prices at the pump. Let them be set by world market demand. All you free market folks should agree with this. What oil independence really buys us is the ability to decide who our friends are in the world. No more having to prop up arab dictators and despots to ensure cheap gasoline. It actually means we can support Israel unequivocally if we want, among others. This is a global game changer. No one on the political scene wants to acknowledge this because the ramifications are huge, and not even close to being understood.
Jan 31, 2013 11:35AM
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Wrote an explanation about the Keystone PL yesterday, didn't ,couldn't post....My opinion..

 

Really didn't have as much to do with Obama, as some would like to convince...

Although it is a given, he is a Democrat, along with being somewhat enviro-friendly and then there is that voting block..? He said he would take it up after the elections..

We have pipelines everywhere, and many are being built or expanded as we speak...

We are are investors in Pipelines and I have family & friends that are "Pipeliners."

 

Keystone was mostly held up by the Powers and Enviromentalist in the State of Nebraska..

I'm sure there are many other issues from others. One being about the Elections.??

 

Major fear was enviromental impact on the State and the Large Aquifer(Oogalaha(sp)) under the area...

Other problem is the oil being transported to Gulf refineries or being "exported", without and major benefit to Americans..

Except initial jobs...building,maintenance and refinery operations.

Not all the Canadian Oil was going down to the Gulf area, some would be dropped off along the way..

Another Caveat, was Canada has been in other discussions about building the pipeline or another straight West to the Coast and selling the Oil out of Vancouver or nearby area...

I believe the Chinese and Japanese had a "great interest".

If this were to happen, there would be "little or no benefit" to Americans..

So we have a conundrum, and "energy policies are not as easy as one might think."

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Cramer -- why do you think we have been burning up Arab oil??? Our past leaders were smart enough to be into power dictators in the middle east to sell us cheap oil and use only dollars to buy and sell oil giving us huge trade advantages.

 

Why should we burn US oil when we can burn cheap Arab oil???

 

It is silly for us to use this oil and we blew it when we tried to use our military to secure Iraqi oil and then attack Iran and secure it's oil for us.

 

Now we are having to rediscover the oil that we have always know was under ground.

 

There is still a lot of forgotten oil in Texas where they closed the taps when the governement put windfall profit taxes on the oil and everyone but the owners of the oil have forgotten about them.

 

Pretty much there is still an ocean of oil under the ground in the US

 

But why should we tap into it when we can burn other people's oil and reduce their countries to meaningless back water countries in 10 to 20 years from now when we bleed them dry.

 

Saudia Arabia is about ready to drop it's oil output a lot because they are running out now thanks to us getting it out of the ground all these years.

 

The sad thing is there is a cheap and easy way to have fussion energy and they know how to produce it they are just not willing to let lose than much cheap energy into the world right now.

 

 

 

 

Jan 31, 2013 1:36PM
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let's not let the smoke screen fool us, this criminal just scored ANOTHER gap down pump and dump with STZ...........pumped on 1-25-2013 ..........gapped down 8 dollars today. BEWARE THIS SCUMBAG 

Jan 31, 2013 3:01PM
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Energy has two broad subsections; transportation and electricity.  Fortunately the US has bountiful amounts of coal, gas, shale oil and renewables.  What is becoming a greater constraint is the amount of water required to convert these resources into useable fuels.  The burning of coal for electricity is the greatest consumer of water other than farming.  Coal burning also produces more Carbon Dioxide, a greenhouse gas.  Natural gas is forecast to be abundant, but we have heard that several times over the past few decades.  The good news is that natural gas can be converted to very clean diesel fuel.  Getting oil out of the ground also consumes large volumes of water.  Water will replace all these fuels as the most valuable resource in the future.  The USA has more than enough natural energy resources to be energy independent, but in y view the political courage does not exist to make it all happen.  Plus, we do elect the most ignorant people to public office and then can't get them out.   If we can get the obstructionists and ignorant politiciaosn out of the way, all these resources can be respponibly developed.  Water consumption should be a critical variable in deciding what the course should be.
Jan 31, 2013 12:51PM
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The great renewable energy is an attack on the environment! 

Have you seen the 500 foot turbines?

 

We have them now within 750 feet of property lines...towering over everything for miles around, thousands of them.  No compensation for loss of property values, noisy, with red lights flashing, causing shadow flutter for miles around and rotating.

 

We're told they aren't industrial so they can put them anywhere.   

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Let's see energy policy -- no new refineries in the US in the last 30 years yet produciton has more than doubled ?? How did they do that ?? by doubling the size of existing plants mainly in Houston and New Oreleans areas increasing the polution in those areas to dangerous levels

 

The air and ocean around these places are so toxic that every year tens of thousands of birds and fish die fro the polution and cancer rates are the highest in the country.

 

And now that the Texas oil and Gulf of Mexico oil is running out they want to build huge pipelines to bring oil down to the refineries here instead of doing the logical thing and more the refineries to the oil deposits. The savings in transportation would reduce the cost of gas by at least $1.50 a gallon.

 

Time to tear down those old poluting refineries along the Gulf Coast and let the people and birds and mamals and fish breath clean air and water once again.

Jan 31, 2013 11:41AM
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I'm not going to read the whole Article...Read too many like it.

 

It seems to me that most of our "energy policy" revolves around, How much "Black Gold" our Politicians can stuff in their pockets...??

 

It doesn't seem to matter whether it's a Repub or a Dem...? IMO

SO don't bother trying to make that ARGUMENT with me...

 

Jan 31, 2013 11:14AM
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I remember when the DOW crossed 10,000 for the first time.  All of CNBC folks were glued to the ticker.  Maria was as giddy as a new bride.  It was the moment.  Maybe she will flip her skirt as we cross 14,000. Oh what a sight.
Jan 31, 2013 3:15PM
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Prelude to a Bust ! Great spin by the Masters !  (TO THE TO BIG TO FAIL)  DIE BANK OF AMERICA DIE  !!

Jan 31, 2013 2:14PM
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The enegry gods are laughing all the way to the bank, same as the drug makers
Jan 31, 2013 12:01PM
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Yeah, what energy policy?  We've killed the alternative energy industry twice before for lack of one, and may do it again.

Jan 31, 2013 12:07PM
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I listen to how youngsters characterize the stupidity of unions without an ounce of forethought as to how and why they came about.  They came about because of what is happening right now.  We have a massive contrived process where arrogant CEO's around the world are organizing, plotting, bribing, and salivating at the demise of organized labor and the ensuing benefit they will have with little to no resistance to lowering wages to the most basic subsistence level.  Only the most naive could believe these folks would consider offering a fair wage as some sort of "correct" or responsible action. These Arrogant SOB"S are salivating at the thought of crushing all of us. They see their job as getting the cheapest least cost for their shareholders.  Their only concern is the bottom line.  And as our political system is in a shambles there will be no safety net or pushback offered up by our corrupt electerds. The system is out of balance but in the opposite direction of the 70's when too much labor influence skewed power away from enterprizes.  We need responsible balance to grow an economy and prosper.  This we are seeing now is not the answer.   JMHO
Jan 31, 2013 4:59PM
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Oil, as a transportation fuel is a great waste as of the resource and can be replaced, mostly, over a reasonable period of time with nat gas. A barell of oil, refined into consumer products-paint, tape, lubricants, glass, cosmetics, medicines, plastics, synthetic fibers and materials, rubber, asphalt  etc etc is worth at least 3 times more than transportation fuel at the market. Allowing for inflation, we pay about what we paid in the 1930s for gas, and thats a miracle in itself.

For all you consiracy theorists that big oil is colluding to keep prices high, it just aint so. OPEC may do that but not big oil. High prices for crude so diminishes their refining profits it is not in their best interests. Also, the major oil companies only own less than 10% of the known reserves. OPEC and Russia and Brazil own by far most of the reserves.

If we didnt have an admin hell bent on destroying our economy through high energy prices to aqccomodate renewables,this country, while not totally independedent, could certainly cut off OPEC in 7-10 years. If you factor the costs of our military presence to protect the flow of middle east oil, it is about $180/barell e are actually paying.I AM SICK OF TRANSFERRING OUR WEALTH TO OUR ENEMIES. ARENT YOU?

High energy prices suppress the economy and weigh most heavily on low or no income people. the poorest countries in the world have high energy prices, sometimes accounting for over 50% of their GDP. Low energy prices stimulate ecenomic well being and security. High prices prevent nations from growing out of poverty.

Get with it Washington.   

Jan 31, 2013 10:25AM
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My god BoBo...... You really do wake up in a different world every day. I wish you would decide who and what you are.
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