We’re witnessing a strange dichotomy during America’s energy boom. While oil and natural gas production has been increasing on private and state lands, it’s been falling on federal lands, as these two charts from the Institute for 21st Century Energy show.
Between 2009 and 2013, oil production on private and state lands has increased by 61% while decreasing by 6% on federal lands.Chart: Oil production on federal lands is declining.
In that same time, natural gas production on private and state lands has increased by 33% but decreased by 28% on federal lands.Chart: Natural gas production on federal lands is declining.
This Congressional Research Service report gets into the details.
Much of the blame stems from permitting delays by the Bureau of Land Management (BLM). A Department of Interior Inspector General report finds that while state regulators take only 80 days to approve permits, their federal counterparts at BLM take about 7.5 months. What's more BLM’s permitting process also involves a lot of uncertainty:
We found that neither BLM nor the operator can predict when the permit will be approved. Target dates for completion of individual [applications for permits to drill] are rarely set and enforced, and consequently, the review may continue indefinitely.
This “adversely affects developing the Nation’s domestic energy resources," the report states.
Federal authorities can reverse this trend by improving the permitting process for federal lands and opening more offshore areas to energy exploration.
Read the Institute for 21st Century Energy’s Energy Works for US for more policy recommendations to unleash America’s energy abundance.
Thanks to hydraulic fracturing and horizontal drilling, America is witnessing a gusher of domestic oil. One focal point is North Dakota, which recently hit a production milestone:
Oil production statistics released by the state’s Department of Mineral Resources (DMR) revealed that the state produced 1,002,445 barrels per day in April 2014, up from 793,832 the year before. The new statistics mean that North Dakota now joins the ranks of Texas, Alaska, California and Louisiana- the only states to ever generate more than one million barrels per day. (Texas is the only other one still producing that amount.)
North Dakota expects its production to climb: the DMR predicts oil production to peak at 1.5 million barrels per day around 2017.
This tracks a broader, national trend, as well: This year U.S. oil field production outpaced imports by about one million barrels a day.
The king of American oil production is still Texas, which topped the three-million barrels per day mark in April.AEI chart: Texas oil production.Source: Mark Perry, American Enterprise Institute.
Mark Perry at the American Enterprise Institute points out that “Texas would have been the 8th largest oil-producing nation in the world for crude oil output in December  (most recent month available for international oil production data) at 2.82 million bpd – just slightly behind No. 7 Iraq at 2.92 million bpd.”
Together, North Dakota and Texas produced nearly half of all the oil in the United States.EIA chart: Monthly crude oil production by state: April 2010-April 2014.Source: Energy Information Administration.
This has led to impressive levels of economic growth in both states.
Let’s not forget successful shale exploration in Colorado:
Colorado energy companies produced nearly 64.1 million barrels of oil during 2013, breaking a record for full-year production that’s stood for nearly 60 years, according to state regulators.
The 2013 production also represents a 30 percent increase over the state’s 2012 production — and is more than double the amount of oil Colorado produced in 2008, according to the Colorado Oil and Gas Conservation Commission (COGCC), which oversees the state’s multi-billion dollar industry.
However, Colorado's progress is at risk by potential moratoriums on hydraulic fracturing.
America is blessed to have the technological ability, entrepreneurship, and freedom to develop its energy abundance. If government can avoid erecting barriers to energy development, expect continued growth.
In March, hundreds of students were arrested after chaining themselves to the White House fence to protest the Keystone XL pipeline that would transport Canadian oil sands crude and Bakken shale oil to refineries on the Gulf Coast. Groups like XL Dissent and 350.org want you to believe that this proves that young people are in lockstep opposition to the pipeline. Earthguradians Youth Director Xiuhtezcatl Martinez told Politico, “I think when the public sees college students coming out and getting arrested people can say the youth came out. We were here. Because our generation will be the most impacted by whatever decision is made by the government.”
These protestors are actually outliers, a Pew Poll finds. Not only is the Keystone XL pipeline universally supported 61% to 27%, but younger people strongly support it too.
Pew broke its poll down into a number of segments, two of the youngest groups, the “Young Outsiders” and the “Next Generation Left” both support the pipeline. Keystone XL wins with Young Outsiders 59% to 29%, and the Next Generation Left supports it 62% to 28%.Chart: Pew Poll, June 26, 2014, on Keystone XL
The Washington Post’s Aaron Blake concludes that these voters “who see themselves as environmentally conscious, pro-wind and pro-solar don't believe that Keystone runs contrary to that ultimate goal.”
The State Department came to a similar conclusion in its environmental analysis of the Keystone XL pipeline. It found that it will have minimal effects on the environment.
As the American Action Forum’s Doug Hochberg writes, given the current economic conditions facing younger people, supporting a job-creating energy infrastructure project makes sense:
It shouldn’t be shocking that young people are interested in jobs when 12.6 percent of recent college graduates are unemployed in the so-called economic recovery. Young people want jobs and an economy that is moving forward, but the denial of Keystone just highlights the administration’s failure to provide either.
Construction of the southern leg of the pipeline has created thousands of jobs and given boosts to local economies. If the President finally gives the go-ahead to constructing the northern leg, it will create thousands of additional jobs and help more local economies.
Younger voters see how the building the “safest oil pipeline built in America to date” strikes the right balance between improved energy security, job creation, and environmental protection.
Colorado is a key battle ground in the debate over shale energy development. Earlier this week, voters in one community, Loveland, looked past the scare tactics of shale energy opponents and rejected a moratorium on hydraulic fracturing:
Thousands of Loveland residents voted against Question 1, the only item on the city’s special election ballot, which proposed a two-year moratorium on fracking and a study of the process’ potential health impacts.
B.J. Nikkel, director of the Loveland Energy Action Project, told the Denver Business Journal, “Loveland serves as a great example that when voters receive the right information and encouragement they see through the activists’ deception and fear tactics.”
This election should serve as a warning to those pushing similar ballot proposals statewide. Coloradans will not be manipulated by uncompromising activists peddling fear instead of facts.
A number of energy-related referendums could be on the state ballot this fall. A November 2013 poll found that Coloradans support hydraulic fracturing 51% to 34%.
Shale energy opponents’ goal is clear: Scare the public with misinformation. When informed that shale energy development results in job creation and economic growth, voters support it.
Critics like Tom Steyer’s Next Gen Climate operation wants you to believe that the Keystone XL pipeline will only create a few dozen jobs. However, after looking at the construction of the southern leg of the pipeline, the truth is far different.
A new report finds that construction of the 485-mile Gulf Coast Project, stretching from Cushing, Oklahoma to Nederland, Texas, created thousands of jobs and added billions to local economies. The Gulf Coast pipeline is the portion of the proposed Keystone XL pipeline that was able to be built because it didn't require a Presidential Permit. It is helping improve the transportation of oil sands crude to Gulf Coast refiners - the same crude that Keystone XL will carry.
The report, prepared by Southern Methodist University's Maguire Energy Institute for the Consumer Energy Alliance, found that in Oklahoma and Texas, the project resulted inOver $5.7 billion in new economic activity. Over 42,000 person years of new employment. Over $217 million in additional state and local taxes.
The authors write:
[T]he Gulf Coast Project pipeline contributed substantially to the economic health of most of the counties along the alignment during the 2012-2014 construction period. In the years ahead, recurring expenditures for operations and maintenance of the pipeline will continue to support jobs while generating income and tax revenues for Oklahoma, Texas and the 24 affected counties.
Counties in Oklahoma where the pipeline was construction saw an average per capita income increase of 78%. Three counties—Seminole, Hughes, and Coal—saw over 90% increases. For counties in Texas, the average per capita income increase was 58%.
On a press call, Bud Weinstein, an economics professor at Southern Methodist University’s Cox School of Business and one of the reports’ authors noted that "most of these counties are comparatively low-income, rural counties.” Construction of the Gulf Coast Project has been a "tremendous economic tonic." For instance, the report finds “pipeline activities averaged 31 percent of personal income” in Oklahoma.
During construction, TransCanada spent about $6 million per month directly in the local community. Here are some examples of local entrepreneurs taking advantage of the business opportunities the pipeline's construction offered:
For instance, Clifford Bryant, a local entrepreneur in Prague, Oklahoma, reports that construction of the pipeline “doubled our city sales tax receipts.” Clifford bought a mobile RV and trailer park when he heard that TransCanada would be bringing a construction yard to town for its Gulf Coast Pipeline Project. Previously, only 11 of the 57 spots in the park were occupied. Once construction began, all 57 were occupied. Clifford notes that a full RV park contributes as much as $8,000 a month in electricity fees alone to the municipal utility.
In the Southeast Texas town of Kountze, Jeremy Kunk’s Ready Ice Company sold approximately 30,000 pounds of ice per week to pipeline construction sites in its area. The ice improved safety by keeping workers cool and hydrated. Kunk expects that the economic boost supplied by pipeline projects will be long-lasting. “Pipeline construction such as TransCanada’s Gulf Coast Pipeline Project is going to feed our refineries more product and keep us hopping for the next five, 10 years at least.”
Joe Penland is another Texas business owner who benefited from TransCanada’s pipeline construction. Joe owns Quality Mat Company in Southeast Texas. His company partnered with TransCanada to make the Gulf Coast Project safer. With a patented concept, Penland fabricates more than 250,000 mats per year in his facility inside the Beaumont city limits. He leased the mats to TransCanada during construction of the Gulf Coast Pipeline in Oklahoma and Texas.
Positive benefits would extend to more states if the northern leg of the pipeline, linking Alberta to Nebraska, were approved by the Obama administration. “Similar state and local economic benefits can be anticipated should the United States give the go-ahead for construction of the Keystone XL pipeline from Hardisty, Alberta to Steele City, Nebraska,” the authors write.
"I would expect similar impacts" to those found in Oklahoma and Texas if the northern leg of the Keystone XL pipeline is approved, Weinstein said on the press call.