Skip to comments.Europe left behind as shale shock drives America’s industrial resurgence
Posted on 10/29/2012 12:21:12 AM PDT by bruinbirdman
The wonders of US shale gas continue to amaze. We receive fresh evidence by the day that swathes of American industry have acquired a massive and lasting advantage in energy costs over global rivals, demolishing assumptions about US economic decline.
Wind turbines will supply 17pc of UK electricity by 2020, equal to all other
off-shore wind projects in the world combined
Royal Dutch Shell is planning an ethane plant in the once-decaying steel valley of Beaver County, near Pittsburg. Dow Chemical is shutting operations in Belgium, Holland, Spain, the UK, and Japan, but pouring money into a propylene venture in Texas where natural gas prices are a fraction of world levels, likely to remain so for the life-cycle of Dow's investments.
Some fifty new projects have been unveiled in the US petrochemical industry. A $30bn investment blitz in underway in ethelyne and fetilizer plants alone.
A study by the American Chemistry Council said the shale gas bonanza has reversed the fortunes of the chemical, plastics, aluminium, iron and steel, rubber, coated metals, and glass industries. "This was virtually unthinkable five years ago," said the bodys president, Cal Dooley.
This is happening just as other clusters of manufacturing - machinery, electrical products, transport equipment, furniture, etc - are "re-shoring" back from from China to the US. A 16pc annual rise in Chinese wages over the last decade has changed the game. PricewaterhouseCoopers calls it the "Homecoming".
The revival of the chemical industry is a spin-off from the greater drama of Americas energy rebound, though a very big one. As many readers will have seen, US energy department said last week that the country will produce 11.4m barrels a day (b/d) of oil, biofuels, and liquid hydrocarbons next year, almost as much as Saudi Arabia
(Excerpt) Read more at telegraph.co.uk ...
Being a shale oil producer means an end to boom and bust economy cycles.
Every one will be very happy. Conservatives won't need to fret over cutting spending and raising taxes and liberals won't have to worry about pension liabilities or rolling back the welfare state.
With an expanding economic pie, America could be a less polarized country and Americans could live very happily together for a long time.
Maybe America can say a a la hasta vista to its Chinese financiers in the future.
Obama has plans, if elected, to put the clamps down on shale fracking. Lets hope that if Romney gets elected these same new EPA laws don’t get pushed through in some bill.
This is by far one of the most exciting stories I have read about our country in a long time.
Why can’t the worthless American media do stories like this?
Now I understand Romney’s energy plan more comprehensively.
He knows what he is doing and Obama is an idiot.
We need to get Obama out so our country can be on top once again in energy development and be off the Muslim oil teat.
This is the important part of the article:
America produced 81pc of its total energy needs in the first six months of this year, the highest since 1991. Citigroup thinks US ouput of crude and eqivalents will top 15.6m b/d by 2020, adding up to 3.6m jobs through multiplier effects. North America as a whole will reach 27m b/d - with Canadas oil sands and Mexicos deepwater fields - making the region a “new Middle East”.
The implications are momentous. America will no longer need a single drop of oil from the Islamic world. The strategic burden will fall on Europe, which is meekly disarming itself to meet Wolfgang Schauble’s austerity targets. Russia and China will be pleased to help.
The Middle East will then become Europe and China’s problem, not ours. Add that to the industrial renaissance (the name of the game is cheap energy, cheap resources and having them in close proximity) that should come about as well, and you can see why the Middle East and liberals are so desperate to support someone like Obama.
Without Obama or the course prescribe by the left in this country, and with everyone else committing industrial suicide in the name of the Green Religion or Islam (take your pick), the US *could* conceivably become a dominant industrial power the likes of which have never yet been seen because we’d be rocketing forward while the rest of the world is scuttling their industry.
Off topic: In four years, I still haven't come up with or heard or read a term that adequately conveys my bottom of my soul disdain, contempt and desire to see all the worst that can happen to a human being befall this destructive monster. I want to watch him sobbing in eternal torment, and asking forgiveness on his knees on his very own 24 hour cable channel. Really, tho, it's not racial.
Just because you are raking in revenue now is no reason to spend like a drunken sailor.
Sure we have infrastructure projects going great guns in the oil producing areas of the State (to the envy of regions which already have 4-lane highways or interstates and a fraction of the truck traffic), and those investments needed to happen anyway and have been on the drawing board for decades, where they languished until the last few years.
That is an investment, and (actually) the cost of doing business.
Indirectly, the oil companies are paying via production taxes and through the pass-through costs of truck licensing and haulage permits, all of which end up factored into the cost of drilling a well eventually.
As populations increase in the region, demands on other infrastructure increase as well, and those needs must be met, or the increase in tax revenue will not be sustainable. One hand washes the other, in a good way.
Unfortunately, though, there are those agencies left on the sideline in all this who are seeking desperately to get a slice of the pie, to justify their presence, to expand even when not needed, and to grab a share of money that need not be spent.
The time to be ever vigilant is not so much when times are tight, but especially when there is plenty to go around. That is when aspects of government will grow far beyond their intended size and scope and liberty is especially threatened.
"Vengeance is mine saith the Lord."
I trust Him to reward all the traitors to this country as they so richly deserve, for only He can adequately do so.
Three points to consider.
The obvious one is this is being rolled out as a smoke screen to bolster Obama’s claim of being the “pro energy” cheerleader when the opposite is true.
“Biofuels?” Still pushing the ethanol and “diesel” green propaganda?
Last but not least, Obamas destabilizing in the middle east will ensure that the US consumers won't see any price reliefs because world markets will still gobble up supply and we still have the EPA and unfrocks making sure we don't have any increased refining capacity.
You don’t get it, Democrats don’t fret over pensions and the welfare state because they fear the loss of the “safety net”. Democrats use the pension liabilities as part of their organizing technique.
I believe it was Calvin Coolidge who said, “The business of America is business”.
This story just makes me feel good and gives me hope for the future for my kids and grand kids.
Welcome back America.
No, most boom and busts happen not as a result of market problems but because of government interference in the market. I see no sign that this will change.
>>>>”Being a shale oil producer means an end to boom and bust economy cycles.”
Absolutely untrue. We had boom-bust cycles when we were primarily an oil producer (even throughout the 19th century); we shall continue to have boom-bust cycles as a shale-oil and shale-gas producer (throughout the 21st century).
Boom-bust cycles are not caused by resources. They are the inevitable outcome of inflationary monetary policies primarily caused by the Federal Reserve’s expansion of fictitious money and credit. They are also caused, to some degree, by a practice of commercial banks (apart from any Federal Reserve policy) called “fractional reserve banking”, which also inflates the supply of money with a fictitious medium of exchange (economists call it “fiduciary media”). The “boom” is the period of inflation; the “bust” is the inevitable consequence of the boom, because as it turns out one of the unfortunate aspects of an inflationary boom is that it misleads investors into making erroneous judgments regarding the expected future profitability of large-scale ventures. Thus, the “bust” is that part of the cycle which exposes to everyone (the investor, the newly hired managers, the newly hired workers, etc.) the fact that the original investors misread the direction in which the market for their product or service was actually moving; and, additionally, is that part of the cycle that “unwinds” that original error . . . generally by means of liquidating as much of it as possible.
The “bust” is thus correctly compared to the hangover period after a “boom” period of being on a heavy binge.
So I think fracking is fantastic, and good for the economy in every way, BUT: so long as we have a Federal Reserve, and so long as commercial banks can lend out more than they have on reserve, there will always be some degree of inflation; and so long as there is some degree of “boom”, there will always be some degree of “bust.”
Because they contradict the liberal agenda. We must still prepare for the cataclysm of Global Climate Change, remember? That means "green energy", not energy dependent on hydrocarbons.
Besides which, fracking destroys the environment!
No self-respecting liberal in the media wants to report a story that speaks of strong economic growth fueled by energy independence due to shale gas and shale oil.
Excellent interview by Peter Robinson of the Hoover Institution with Trevor Rees-Jones, CEO of Chief Oil & Gas, mainly discussing fracking.
It's worse than that for the Europeans. The Chinese recent threatening behavior towards their neighbors in the South China Sea is because they want to have the vast oil reserves in the are to themselves. The area is believed to have 4 or 5 times the oil of the Gulf of Mexico. China can do without the ME, Europe cannot. Furthermore, the Saudis may become a net importer of energy within 20 years. The Europeans better hope the winds increase to turn those windmills faster.
>>>>”Besides which, fracking destroys the environment!”
A number of years ago, the US flipped the bird to Europe and Asia regarding the Kyoto Protocols on “global warming” and reducing the so-called “carbon footprint” (CO2 emissions) of the signatories. Guess what? The US which is NOT a signatory has reduced its CO2 emissions more than any country in the EU; conversely, the countries in the EU that are signatories, have increased their own CO2 emissions!
I believe the “carbon footprint” mantra is nonsense anyway; but it’s interesting to see the reaction of lefty environmentalists who are concerned about such things when you tell them the US’s carbon footprint has fallen dramatically precisely because of a new technology that they are protesting against.
Actually, it’s even worse than *that* for the Euros. Much of their continent is already dependent on natural gas sent in from Russia for winter heating. Russia doesn’t need the Middle East at all, and the Euros may decide better Red than dead (because they have no military to ensure their energy supply from the Middle East) and essentially become client states in a new Russian economic empire.
I don’t think those windmills can spin fast enough to get them out of the hole they are jumping into.
Liberalism has very little to do with reality.
It's all about an agenda. <
And there are the "useful idiots", the "true believers"...and the power structure that uses them.
I’m sure Obama’s EPA already has plans to but the brakes on any American comeback from this source.
Re: New Obama EPA rules - I guess even when Romney gets elected Obama STILL has almost 3 months to empty his bowels of all the crap he has built up.
Thanks for posting
Here is something FR’s can use and pass around in support for their conservative senatorial and congressional candidates
Let’s Get Fracking..
We have the sand * and oil and gas lay deep within our land.
Elect(insert candidate name and district) Ray Boland to Wisconsin’s Congressional 3rd district with US he ‘ll stand.
No forward progressive against progress toward energy independence but a conservative who believes in America and its greatness. He will fight the federal delays, restrictions, and prohibitions on coal, oil, and gas, exploration, extraction, and use ordered by Obama and supported by democrats like (insert names) Baldwin and Kind which has resulted in semiloads full of dollars of cost and waste, hurting everybody epecially those on fixed incomes dealing with double and tripple cost increases rapidly contributing to a collapsing economy.* (if this applys to your area personalize it)Note All of Adams county is ln the 3rd Congressional district and loaded with fracking sand.
VOTE NOV 6TH FOR ( INSERT NAME)
LETS GET CRACKING AND DO SOME FRACKING AND GET OUR OWN GAS AND OIL
Low energy prices, low regulatory burdens and low taxes are the winning trifecta.
Romney could simply cripple the EPA, et al. by demanding that Congress approve all the regs.
I remember a bumper sticker from Houston in the 80’s
” Lord if we have another oil boom I promise not to piss it away this time”
Build the Keystone pipeline and another 600,000 barrels/day of secure oil will flow into America. Keystone will pass through the Bakken field and get that oil to market also.
Energy is needed to produce and transport virtually every good and service. North America has a comparative advantage in energy and that advantage is growing daily.
Elect Romney and America will be saved from poverty by the wealth beneath your feet.
That is a fantasy hope not based in reality.
The want to compare to Saudi Arabia, but neglect to point out that most of Saudi's output is crude oil. Our current crude oil output, with all the expansions into shale, is 6.27 mmbpd.
All this wonderful oil and gas production despite Obama’s green obstructionism.... Imagine how this will play out with a fair president. The straight shooter Mitt Romney
“Just because you are raking in revenue now is no reason to spend like a drunken sailor.”
Thank you, Sir!
You are exactly right. An increase of that nature in the national production wealth would create tax revenues that should be used to pay off debt, trim government and build savings. The ultimate goal should be to get government out of the way of private business so that private business can earn income from their endeavors.
It’s our Ace in the hole. Assuming Obama doesn’t foul things up.
EPA, probably the most effective tool obama has used to crush private enterprise can be erased with the stroke of a pen - the whole agency!
It was created by Nixon with an exec order, it could be eliminated the same way. I hope Mitt has the guts to do it.
The envro-whackos would go nuts.
For those who want to see a short 6 minute video showing how horizontal drilling and fracking is done Northern Gas and Oil has done a great video.
This includes a piece on how groundwater contamination is avoided: http://www.northernoil.com/drilling
Knowledge is power, keep the link and pass it on.
I would just send a memo around to the effect that anyone in the EPA who has written or assisted in writing a regulation in the last four years has seven days to resign or retire.
Then I would assign all EPA enforcement actions to the individual States by Executive Order.
Then I would cut their budget to 10% of the 2008 level.
That way, really serious matters could still be addressed.
“Being a shale oil producer means an end to boom and bust economy cycles.”
Boom and bust are natural cycles. The governement trying to artificially control them makes them worse. Nothing will make them go away.
Increasing domestic energy production will help our country, but have no doubt, the libs can spend every dollar coming in and cry about how selfish we are for not spending more.
......The Middle East will then become Europe and Chinas problem-——
Increasingly as petrochemical production increases in the Gulf states and Iraq, Europe will be unable to buy feed stock and compete. The industrial states will wither as progress and growth occur elsewhere.
That’s PittsburgH, Brits. To paraphrase the old song, if you try to knock the H out of Pittsburgh it will surely knock the “H” out of you!
Thank you - I didn’t know that it was an EO. I was just telling my kids that when the EPA was created there WAS a huge pollution problem (the Illinois(?) River near Chicago would burn occasionally due to all the gas and oil, many rivers WERE dead of fish, etc.).
But, just like the unions and labor laws were needed back in the 1800’s, they have gone so overboard that it is bad for the workers (no jobs) and our economy. I recall when the limits in air for Benzene came out, there weren’t even instruments on the market yet that could measure that small!
Heck, even if some of the EPA rules were relaxed by only 25% it would be a huge incentive to our economy. Even if those rules were only relaxed for 10 years or whatever to get us back on track.
So far, so good...
That would be the U.S. Senate which did not approve the Kyoto Treaty.
President Bill Klinton said at the time that his EPA and his executive orders, with the blessing of the Democrat Party, would adhere to Kyoto.
The Obammunist and his EPA are far worse than the Klintoon Administration, having appointed Carol Browning, a director of Socialists International, as the EPA political commissar with a mandate to enforce the green socialist agenda.
The communist Val Jones was a smokescreen green energy nominee.
Carol Browner required no Senate confirmation.
As for the Federal Government, the current administration's hostility toward issuing permits (onshore and off) has created a situation where federal royalty revenues are dropping. Nothing like liberals to figure out how to starve in the land of plenty.
Perhaps more sane management in Washington can help with that problem and increase revenue without increasing the burden to taxpayers by opening up areas closed to exploration and production and collecting the Federal share (production royalties) of oil and gas produced on Federal land instead of releasing token amounts of oil from the SPR to 'show they care'.
Legislating Innovation is much easier than Engineering it.
Why he just didn't make them 1000 MPG is beyond me. If he had, we wouldn't need much Oil at all.
First, it can be done.
Second, the resources exist which can make it profitable.
Third, the price exists which makes that work.
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