U.S. CHAMBER OF COMMERCE

Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth An oil tanker in the Anzoategui State in Venezuela.Oil-rich Venezuela is importing U.S. oil. Photo credit: Juan Carlos Hernandez/Bloomberg.

A big part of public policy debates involves countering misleading claims. In this regular feature, I highlight important facts about the key issues being debated around Washington, D.C.

Claim: With low oil prices, there’s little incentive to export U.S. oil.

What you need to know: After forty years, the oil export ban was lifted in December. Now, global markets can directly benefit from America’s energy renaissance.

Because of low oil prices—partly due to hydraulic fracturing generating tremendous increases in domestic oil production--some energy analysts thought there would be little interest in exporting oil.

However, soon after the ban was lifted, companies quickly loaded a tanker with Texas shale oil and sent it to Italy.

And in an remarkable turn, oil-rich Venezuela is importing U.S. oil:

Petroleos de Venezuela SA received a cargo of West Texas Intermediate crude at the end of January at a terminal on the island of Curacao, where PDVSA operates a refinery, according to two people familiar with the shipment. It was the first delivery since export restrictions on U.S. crude were lifted last year.

...

Venezuela’s state-owned oil company, despite having access to the world’s largest petroleum reserves, uses lighter crude from abroad to blend with its heavier production. In 2015, the company imported about 40,000 barrels a day from countries including Russia, Nigeria and Angola, according to data compiled by Bloomberg.

“They’re desperate, they’re really desperate,” said Carl Larry, head of oil and gas for Frost & Sullivan LP. “It’s well known PDVSA has had issues running their refineries in recent years. It really raises a red flag about their economic situation and where their oil company is situated."

This is just the beginning. World demand for U.S. crude is out there. 

Ending the ban will encourage investment in the energy industry and create jobs--as many as 859,000 jobs annually.

Sean Hackbarth Power transmission lines are suspended from an electricity pylon in Clifton, New Jersey.Photo credit: Steve Hockstein/Bloomberg.

A big part of public policy debates involves countering misleading claims. In this regular feature, I highlight important facts about the key issues being debated around Washington, D.C.

Claim: EPA’s carbon regulations will save people money.

What you need to know: EPA Administrator Gina McCarthy claims her agency’s Clean Power Plan, a forced reengineering of America’s power grid, will “save us billions of dollars every year.”

The Supreme Court put a break on its implementation until the plan’s legality is settled.

The truth is the Clean Power Plan will make electricity more expensive. NERA Economic Consulting found that 40 states could see an average retail electricity price increase of 10% or more.

Two states, North Dakota and Utah could see rate increases of 43%.

clean-power-plan-will-mean-higher-electricity-bills-average-electricity-rate-increase-2022-2033-_chartbuilder.png  These states will see average electricity rate increases of at least 30% because of EPA's Clean Power Plan Chart: These states will see average electricity rate increases of at least 30% because of EPA's Clean Power Plan


Even EPA admits its regulations will cause electricity prices to rise.

Despite what EPA says, its carbon regulations will mean higher electricity prices.

Sean Hackbarth Gas-drilling site on top of the Marcellus Shale in Lycoming County, PA. Photo credit: Nicholas A. Tonelli. Licensed under a Creative Commons Attribution 2.0 Generic license.

Hydraulic fracturing’s safety record is so good that not even a study funded by an anti-hydraulic fracturing foundation could find evidence that it contaminates drinking water.

The technology, which breaks up shale rock thousands of feet below the earth to release trapped oil and natural gas, has driven down energy prices and transformed America’s energy economy.

In 2012, the University of Cincinnati started testing Ohio wells to see if hydraulic fracturing was causing water contamination. The project was partly funded by a $20,000 grant from the Deer Creek Foundation.

The Deal Creek Foundation is no fan of hydraulic fracturing. In 2014 it gave $25,000 to the Media Alliance in Oakland, Calif., to help fund a documentary on the “rise of ‘extreme’ oil and gas extraction - fracking, tar sands development, and oil drilling in the Arctic.” In 2009, the foundation gave $20,000 to the Northern Plains Resource Council, a Montana activist group that falsely claims, “Fracking damages water, land and wildlife.”

Earlier this month, Professor Amy Townsend-Small, the head of the project, announced her team’s findings to the Carroll County Concerned Citizens, a group of local anti-fracturing activists, The (New Philadelphia) Times-Reporter reports [emphasis mine]:

“The good news is that our study did not document that fracking was directly linked to water contamination,” said Dr. Amy Townsend-Small of the University of Cincinnati, who presented the findings Thursday at a meeting of Carroll Concerned Citizens.

Then things got interesting, noted Mike Chadsey with the Ohio Oil and Gas Association:

It was shortly after Dr. Townsend-Small released that statement that a pin drop on the carpet would have been overheard. The silence was so obvious that even the leader of the group Mr. Paul Feezel said: “You all are very quiet tonight.”

Then things got really interesting. Back to The Times-Reporter story:

An audience member asked if the university was going to publicize the results of the study, noting that had the findings been unfavorable to drilling, that would have been national news.

“I’m really sad to say this but some of our funders, the groups that had given us funding in the past, were a little disappointed in our results,” Townsend-Small said.

Why? Townsend-Small continued:

They feel that fracking is scary and so they were hoping our data could point to a reason to ban it.

The funders quietly slipped away, hoping news of the study’s results remained confined to a local newspaper.

The University of Cincinnati researchers’ findings match what other experts have found: Hydraulic fracturing, when done properly, is safe for the environment:

A Yale University-led study didn’t find evidence that hydraulic fracturing natural gas wells contaminates ground water. An Energy Department laboratory found that neither natural gas nor hydraulic fracturing fluid traveled upward through the rock in wells tested in Pennsylvania. In 2014, Interior Secretary (and former petroleum engineer) Sally Jewell told lawmakers, “I do believe [hydraulic fracturing] can be done safely and responsibly, and has been in many cases.” Even EPA has looked at the science and concluded that hydraulic fracturing has not had “widespread, systemic impacts on drinking water.”

Not even well-heeled opponents of hydraulic fracturing can base their opposition to the technology on science.

It may have been an awkward moment for fracturing opponents, but it was good news for supporters of safe, effective American energy development.