D. Dowd Muska

 

Finding Common Ground on Crude

March 07, 2013

Amidst the squabbling of red, blue, and purple America, here’s something that can bring us together: oil.

In 1970, U.S. petroleum production topped 9.6 million barrels per day (mbd). By 2008, volume had plummeted to a paltry 5.0 mbd. It appeared, to many, that “peak oil” was for real, and that further decline was inevitable.

The naysayers were wrong. Innovation made the downward trajectory quite evitable. Production rose in 2009, again in 2010, and again in 2011. Economist Mark J. Perry, who closely monitors domestic energy, found that “oil production increased by 1.139 [mbd]” between 2011 and 2012, and The Wall Street Journal reports that it is “set to surge even more in 2013.” If demand remains flat (thanks, Bush-Obama economic implosion), and extraction continues to balloon, within a decade or so the U.S. might produce all the oil it consumes. (If it doesn’t, Canada will make up the difference.)

Belatedly, the legacy media are reporting the good news. “Fracking,” “the Bakken,” and “the Eagle Ford” are now terms in common use, as more and more Americans learn that their nation’s petroleum industry is experiencing a resurgence akin to the one enjoyed by its natural-gas business.

But while Texas and North Dakota deservedly garner most of the coverage, suddenly accessible oil deposits can be found in many other spots. And with the right policy shifts, additional states will begin -- or return to -- impressive oil production.

In Virginia, there’s bipartisan support to overturn the Obama administration’s 2010 decision to block lease sales in the Old Dominion’s waters. Late last year, The New York Times reported that the Eastern Seaboard “was once connected to the coast of West Africa before the continent split in two and the pieces drifted apart, creating the Atlantic Ocean. Nigeria alone has more than 37 billion barrels of proven reserves, much of it off the coast in deep water.” The feds claim that not much oil is to be tapped below the Atlantic, but as the American Petroleum Institute’s Andy Radford reminded the Times, “Initial estimates in the [Gulf of Mexico] were five billion barrels of oil. We’ve already produced over 20 billion, and current estimates are that there are 48 billion more.”

To the southwest, the Tuscaloosa marine shale, as described by a Louisiana State University study, is “a potentially significant commercial oil reservoir under a large area straddling the Mississippi-Louisiana boundary south of McComb, Mississippi and covering the Florida Parishes of Louisiana, the southwestern counties in Mississippi and extending westward through central Louisiana to the Texas border.” LSU’s researchers speculated that the formation holds 7 billion barrels, but as exploration continues, expect the figure to rise. In the Gulf of Mexico, where production will soon surpass the output reached before the Deepwater Horizon disaster, tens of billions of barrels lie off Florida’s coast. It’s time for state and federal officials to ditch their scaremongering, and finally allow drilling in the eastern Gulf. (Even global-warming paranoiac John McCain, during his 2008 presidential campaign, endorsed the idea.)

The Niobrara formation, which stretches across Wyoming, Nebraska, Colorado, and Kansas, is a tricky but sizable play. It helped the Centennial State, according to an analysis by the Denver Business Journal, produce “more than 40 million barrels of oil in 2012, the highest … total since 1962.” The Mississippi Lime trend, beneath the Oklahoma-Kansas border, is another budding performer.

Sales of Stetsons and giant belt buckles could soon spike in Ohio. The U.S. Geological Survey projects that the Utica shale, located in the northeastern part of the state, contains nearly a billion barrels of oil, plus 200 million barrels of natural gas liquids. The nearby Great Lakes offer additional opportunities. (Anything that U.S. Sen. Debbie Stabenow is against must be a good idea.)

California was once a petroleum powerhouse, but a severe production decline began in 1985. If La-La Land’s greenies can be bested, the state’s Monterey shale field contains billions of barrels -- the U.S. Bureau of Land Management has already leased thousands of acres to drillers.

Oil deposits don’t care whether you enjoy NASCAR or Downton Abbey, Budweiser or appletinis, gun racks or man purses. Black gold can be found in nearly every corner of the country, and with the proper safeguards, the stuff can be extracted with little risk to workers and negligible impact on the environment. The industry compensates its employees well, and pays a tankerful of taxes at the local, state, and federal levels.

“Saudi America,” some are calling it. Can we all agree to support it?

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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