President Obama has been flitting around the country intimating that U.S. natural gas reserves have tripled in the last three years as a result of his administration’s policies. His chutzpa is astonishing.
U.S. natural gas reserves have tripled in recent years, alright (the last six actually), but it’s in spite of the Obama administration, not because of it.
Within its first weeks, the Obama administration derailed plans to open up the Atlantic outer continental shelf for drilling. It cancelled already-awarded leases on federal lands in the western U.S. It slowed the pace of new lease sales, both on shore and off shore, from Alaska to the Gulf of Mexico to a crawl; ditto for the issuance of drilling permits.
Obama routinely calls for junking oil and gas industry tax incentives and subsidies, which amount to about $4 billion a year. That’s not a particularly large amount of money in the greater scheme of things — but it’s a dumb thing to do if you want more oil and gas. If you want more of a commodity, you subsidize it. That’s why the U.S. has had gigantic agricultural surpluses since World War II.
Most of the natural gas and oil found in the U.S. in the last six years has been found on private land, including the massive discoveries in the Barnett, Haynesville, Marcellus, Eagle Ford and Bracken shales, where the Obama administration couldn’t interfere. Oil and gas production from public land has actually dropped since Obama took office.
The Obama administration can defend these actions — barely — on environmental grounds. But for Obama to intimate that his administration had anything to do with the increase in U.S. gas reserves is a brazen lie of epic proportions — about as brazen as Mitt Romney’s claim that RomneyCare isn’t the prototype of ObamaCare.
And then there’s this statement the president keeps repeating:
“Anybody who tells you we can drill our way out of this problem [high gas prices and dependence on foreign oil] doesn’t know what they’re talking about — or just isn’t telling the truth.”
The belief that “we can’t drill our way out of it” has been an article of faith among environmentalists, Democrats and, above all, journalists, for decades.
But the truth is that the American oil and gas companies, using a combination of three-dimensional seismology, horizontal drilling and hydraulic fracturing, have already made a mockery out of that proposition. Since 2006 they have tripled U.S. natural gas reserves — to 2,170 trillion cubic feet, a 100-year supply at present rates of consumption. The gas boom has already produced so much gas that the price has fallen from over $10 per thousand cubic feet to about $2.50 a thousand today.
The same technology that has produced the gas glut allows oil and other liquid hydrocarbons to be produced from shale and other non-porous formations. As a result, the industry is shifting its focus from pure gas plays (called dry gas) to crude oil, and to gas deposits that have large quantities of the other liquid hydrocarbons associated with them (wet gas).
The most common natural gas liquid is called condensate, or natural gasoline.
Horizontal drilling and fracking in North Dakota’s Bracken shale has driven oil and natural gas liquids production past 500,000 barrels a day (and climbing fast) in that state. It’s now doing the same thing in half a dozen other regions, including the Denver-Julesburg basin.
But the real game-changer is the natural gas itself. The gas can be used to fuel cars and trucks directly, as T. Boone Pickens advocates, or it can be turned into gasoline, diesel and petrochemicals, using updated versions of the same 90-year-old technology (the Fischer- Tropsch Process) that is used for turning coal into gasoline. The technology to do this is commercially mature, but up to now it has been very capital intensive. But a new generation of smaller, cheaper, more efficient units is starting to reach the market that promises to make turning natural gas into gasoline as routine as fracking. If they live up to their billing, the natural gas glut will turn into a gasoline and diesel glut in a few years.
The U.S. has had aircraft carrier battle groups steaming around the Arabian Sea lately in case Iran tries to close the Straits of Hormuz, so you would think the prospect of the U.S. slashing its dependence on oil imports by developing domestic oil and gas would be seen as a blessing.
But that isn’t how a lot of Obama’s supporters see it. Fox example, the Boulder County Democratic Party will consider, and almost certainly pass, a resolution at its assembly calling for a county, statewide and national ban on hydraulic fracturing — which essentially endorses the country’s continued dependence on foreign oil for another generation.
Seems that progressives are cool with the blood-for-oil thing these days.
This opinion column does not necessarily reflect the views of Boulder Weekly.