Yesterday the Houston Chronicle posted a story about some changes in the methods we use to access our energy sources in America. One of the things we have to keep in mind as we strive for energy independence that is environmentally sound is that we are a carbon-fuel-based society. It would be nice to depend on 'clean' energy overnight, but the countries that have attempted that have found that it was extremely expensive and cost thousands of jobs rather than creating them. If you doubt that, google "Spain + wind energy" and see what you come up with. There have also been previous stories on the subject on this website.
Innovation is one of the hallmarks of the American economy. Now, a new drilling technique has been developed that will allow America to access its vast oil and natural gas resources scattered across North Dakota, Colorado, Texas and California. As usual, environmentalists are suspicious, but so far they have not stopped the production of oil.
The article reports:
"Environmentalists fear that fluids or wastewater from the process, called hydraulic fracturing, could pollute drinking water supplies. The Environmental Protection Agency is now studying its safety in shale drilling. The agency studied use of the process in shallower drilling operations in 2004 and found that it was safe.
"In the Bakken formation, production is rising so fast there is no space in pipelines to bring the oil to market. Instead, it is being transported to refineries by rail and truck. Drilling companies have had to erect camps to house workers.
"Unemployment in North Dakota has fallen to the lowest level in the nation, 3.8 percent -- less than half the national rate of 9 percent. The influx of mostly male workers to the region has left local men lamenting a lack of women. Convenience stores are struggling to keep shelves stocked with food."
That is good news. The article reports on current and future implications:
"Still, a surge in production last year from the Bakken helped U.S. oil production grow for the second year in a row, after 23 years of decline. This during a year when drilling in the Gulf of Mexico, the nation's biggest oil-producing region, was halted after the BP oil spill.
"U.S. oil production climbed steadily through most of the last century and reached a peak of 9.6 million barrels per day in 1970. The decline since was slowed by new production in Alaska in the 1980s and in the Gulf of Mexico more recently. But by 2008, production had fallen to 5 million barrels per day.
"Within five years, analysts and executives predict, the newly unlocked fields are expected to produce 1 million to 2 million barrels of oil per day, enough to boost U.S. production 20 percent to 40 percent. The U.S. Energy Information Administration estimates production will grow a more modest 500,000 barrels per day.
"By 2020, oil imports could be slashed by as much as 60 percent, according to Credit Suisse's Morse, who is counting on Gulf oil production to rise and on U.S. gasoline demand to fall.
"At today's oil prices of roughly $90 per barrel, slashing imports that much would save the U.S. $175 billion a year. Last year, when oil averaged $78 per barrel, the U.S. sent $260 billion overseas for crude, accounting for nearly half the country's $500 billion trade deficit.
""We have redefined how to look for oil and gas," says Rehan Rashid, an analyst at FBR Capital Markets. "The implications are major for the nation.""
The two solutions to the current recession are very simple--less government and more innovation.
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