US oil production grew more in 2012 than in any year in the history of the domestic oil industry back to the Civil War
From Saturday’s WSJ:
U.S. oil production grew more in 2012 than in any year in the history of the domestic industry, which began in 1859, and is set to surge even more in 2013. Daily crude output averaged 6.4 million barrels a day last year, up a record 779,000 barrels a day from 2011 and hitting a 15-year high, according to the American Petroleum Institute (API), a trade group. It is the biggest annual jump in production since Edwin Drake drilled the first commercial oil well in Titusville, Pa., two years before the Civil War began (see chart above).
The U.S. Energy Information Administration predicts 2013 will be an even bigger year, with average daily production expected to jump by 900,000 barrels a day. The surge comes thanks to a relatively recent combination of technologies—horizontal drilling and hydraulic fracturing, or fracking, which involves pumping water, chemicals and sand at high pressures to break apart underground rock formations.
Together, they have unlocked deposits of oil and gas trapped in formations previously thought to be unreachable.
That has meant a resurgence of activity in well-established oil regions, such as West Texas’s Permian basin, as well as huge expansions in areas that had been lightly tapped in the past, such as North Dakota’s Bakken shale region. The Bakken has gone from producing just 125,000 barrels of oil a day five years ago to nearly 750,000 barrels a day today.
The benefits of the surge in domestic energy production include improving employment in some regions and a rebound in U.S.-based manufacturing.
MP: Actually, the API’s estimate of a 779,000 barrel per day (bpd) increase in domestic oil last year is pretty conservative compared to year-end comparisons of EIA data for weekly US oil production. Compared to oil output at the end of 2011 (5.846 million bpd), US oil production increased by 1.139 million bpd last year to almost 7 million bpd during the last week of December 2012. Alternatively, using the EIA’s four-week production averages show an increase of 1.063 million bpd from December of 2011 to December 2012. The reason that the yearend comparison shows a much higher annual increase in US oil production (about 1 million bpd vs. 779,000 bpd) is that domestic oil production accelerated during the second of last year – crude oil output increased 14.6% during the second half of 2012 compared to the 4.2% increase during the first six months.
The record increase in oil output last year reminds us the US oil and gas industry continues to be at the forefront of the otherwise sub-par economic recovery, and without that sector’s strong growth in output and jobs, the economy’s sub-par performance would be even more lackluster. The 1 million bpd increase in domestic oil production last year has delivered a powerful energy-based economic stimulus to the economy, creating thousands of new direct, shovel-ready jobs in oil and gas activities, and igniting many spinoff business and indirect jobs throughout the oil and gas supply chain like the “oil-by-rail shipping boom.” The future of the US economy over the next few years looks a lot brighter because of America’s surging domestic energy production.
- US oil production grew more in 2012 than in any year in the history of the domestic oil industry back to the Civil War (aei-ideas.org)
- Energy facts of the week: oil production highest since 1994, oil imports lowest since 1992, and oil jobs highest since 1988 (aei-ideas.org)
- Eagle Ford Shale helps boost U.S. oil production to 15-year high (transwestern-sa.typepad.com)
- Oil Industry Beats Buffett in Railroad Investments Surge: Energy (bloomberg.com)
President Barack Obama’s decision to delay approval of the Keystone Pipeline project is hurting job creation opportunities in the United States, particularly among Hispanics, said officials with the American Petroleum Institute (API) on Tuesday.
The Keystone Pipeline will not only help lower oil prices for U.S. consumers, but have a ripple effect spreading outward from Nebraska and neighboring states to create jobs and help small businesses.
This job creation will be helpful in particular for the U.S. Hispanic population, the unemployment rate for which is one to two points higher than other demographic groups in the United States.
The Los Angeles Times reported in 2010 that the unemployment rate among U.S. Hispanics rose because of their disproportionate unemployment in industries and regions significantly impacted by the economic downturn.
According to a U.S. Department of Labor report, the unemployment rate among Latinos in the United States averaged 11.5 percent in 2011; the most recent unemployment report in February 2012 shows improvement for all Americans, including Latinos, who have seen their unemployment rate decline to 10.7 percent in February from a high of 13.1 percent in November 2010.
In 2011, 5.8 percent of Latinos were self-employed compared to 7.2 percent among whites, partly due to lower educational attainment and less access to financial wealth.
The entry rate of Latinos into self-employment compares favorably to that of non-Latino Whites and their entry rate is even higher compared with whites in low-barrier sectors, according to the Department of Labor report. However, Latinos tend to have lower success rates with their new businesses and exit self-employment at a higher rate than whites.
People of Hispanic or Latino ethnicity represented 15 percent of the U.S. labor force in 2011, or nearly 23 million workers. By 2020, Latinos are expected to comprise 19 percent of the U.S. labor force, according to the U.S. Department of Labor.
API ‘Disappointed’ in Keystone Delay, Impact on Jobs
“We’re disappointed that the current administration doesn’t see how this project doesn’t add up,” said Hispanic Leadership Fund President Mario Lopez during a conference call with reporters, noting that the project appears to be delayed for political reasons.
“Four years ago, Obama promised to push unemployment lower and lead us out of the depression,” Lopez said. “Approval of the Keystone pipeline would demonstrate to all Americans and to Latinos across the country that he cares about jobs and domestic energy.”
API has committed significant resources to support all aspects of the Keystone project.
“The earth hasn’t moved and the geology hasn’t changed,” said API Executive Vice President Marty Durbin, adding that the Keystone pipeline project is “as ready as it can get.”
Durbin said that imports of Canadian oil sands supply to the U.S. Gulf Coast would not create a supply glut, but would displace oil imported from other countries.
Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at firstname.lastname@example.org.
- Republicans say Obama is running out of excuses to delay Keystone pipeline (gds44.wordpress.com)
- Obama to get do-over on Keystone pipeline (cajunconservatism.wordpress.com)
The Obama administration is undermining domestic fossil-fuel production, say Republican Party officials.
They point to comments by EPA Regional Administrator Al Armendariz, who resigned Sunday as agency administrator for the south-central region, suggesting that the agency’s “general philosophy” is to “crucify” oil and gas companies as being symbolic of the administration’s attitude.
The Washington Free Beacon reported in a March 13, 2012 article that Obama Interior Department officials have intentionally “slow walked” drilling permits, reducing the number of annual permits by two-thirds from 157 before the 2010 drilling moratorium to 51 after. The GOP argues that small- to medium-sized businesses are the ones getting hurt, not “Big Oil” as Democrats like to argue.
As a result, half of all Gulf of Mexico businesses have laid-off workers and a further 39 percent have cut salaries and/or hours. A further 46 percent of affected businesses have moved their operations out of the gulf.
EPA regulations could result in a 11 percent drop in gas production and a 37 percent drop in domestic oil production.
The same attitude carries over to coal, where the Washington Post reported that looming EPA regulations would end the construction of conventional coal-fired power plants nationwide. Thirteen percent of all coal-fired power plants are likely going to shut down because of EPA regulations.
This has hit too close to home for a traditional Democratic constituency – coal miners.
By John Rossomando /// April 30, 2012
- Obama officials rip into GOP gasoline bills (mb50.wordpress.com)
- EPA Official: EPAs “philosophy” is to “crucify” and “make examples” of US energy producers (mb50.wordpress.com)
- EPA Official on How To Deal With Non-Compliant Companies: ‘Hit Them as Hard as You Can’ & ‘Make Examples Out of Them’ (nicedeb.wordpress.com)
- EPA Official Quits Over Remark (myfoxchicago.com)
- EPA Is Sorry for the Analogy But Not the Context of Crucifying the Oil & Gas Industries (independentsentinel.com)