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U.S. Oil-Production Rise Is Fastest Ever
The Wall Street Journal ^ | 18 January 2013 | TOM FOWLER

Posted on 01/18/2013 4:28:46 PM PST by MinorityRepublican

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, 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.

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.

(Excerpt) Read more at online.wsj.com ...


TOPICS: News/Current Events
KEYWORDS:

1 posted on 01/18/2013 4:28:49 PM PST by MinorityRepublican
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To: MinorityRepublican

Not that the Obamatrons haven’t tried to stop it.


2 posted on 01/18/2013 4:32:56 PM PST by Nachum (Back on the Google blacklist- www.nachumlist.com)
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To: Nachum
Not that the Obamatrons haven’t tried to stop it.

I can only imagine how much American energy would be produced if the current regime weren't blocking it at every turn! We'd be independent of the middle eastern goons if a pro-energy, pro-business administration were in power. Instead, Obama fights the oil producers with absurd regulations and confiscatory taxes to keep his muzzie kinfolk enriched. And, We the People, suffer pain at the pump year after year with the pretender and his gang in charge.


3 posted on 01/18/2013 4:43:23 PM PST by re_nortex (DP...that's what I like about Texas.)
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To: MinorityRepublican

When prices go up, so does supply. When oil producers begin to rely on a $100/bbl price that has remained that way for two years straight now, they begin to make the investments that result in more production.


4 posted on 01/18/2013 4:54:17 PM PST by Hoodat ("As for God, His way is perfect" - Psalm 18:30)
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To: MinorityRepublican
Can't be. I had a country club Republican tell me that peak oil was in 2007.

/johnny

5 posted on 01/18/2013 4:56:02 PM PST by JRandomFreeper (Gone Galt)
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To: Hoodat
When prices go up, so does supply. When oil producers begin to rely on a $100/bbl price that has remained that way for two years straight now, they begin to make the investments that result in more production.

In spite of obama there are some interesting developments in the shale plays. One is the rapid development of technology to recycle water. Potentially, the total cost of water and treatment may be reduced on average from 1.2 million USD to 200 thousand USD per well. Funny, regulation was not the driver of this technology change. This will also drive the development of the Four Corners plays. In addition, many hopeful developments are coming out of the UTICA shale with Hess for one, committing billions in development of infrastructure.
6 posted on 01/18/2013 5:10:05 PM PST by PA Engineer (Liberate America from the Occupation Media.)
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To: Hoodat
When prices go up, so does supply.

Eggsackly.

7 posted on 01/18/2013 5:19:02 PM PST by hinckley buzzard
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To: MinorityRepublican

I just came from the BP Whiting, Indiana refinery modernization project. They are building a refinery inside the existing refinery just to handle Canadian Tar Sands.

It is a massive and very impressive project.


8 posted on 01/18/2013 5:33:52 PM PST by Erik Latranyi (When religions have to beg the gov't for a waiver, we are already under socialism.)
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To: Erik Latranyi
I just came from the BP Whiting, Indiana refinery modernization project. They are building a refinery inside the existing refinery just to handle Canadian Tar Sands.

It is a massive and very impressive project.

Just goes to show, when private industry does something , you get a cost effective modern profitable project. When 0bama and the progressives try to produce energy you get Solyndra and windmills.

9 posted on 01/18/2013 5:55:22 PM PST by YankeeReb
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To: hinckley buzzard

This is true.

There is nothing new about fracking. It’s been around 30 years. But it wasn’t economical to do it until oil prices exploded as they have from sub $20 a decade or so ago to about $100 now (that’s WTI’s price, not the real price of oil, which is Brent at $112).

With price rise, more oil flowed because the frantic, desperate drilling necessary to overcome the steep decline rates in horizontal wells could be paid for. On a joules in vs joules out basis, the ratio is horrible, but the money (which is defined by man, not nature) generates the flow — and it would even if the joules ratio were negative.

The bad news is this works in reverse, too. If you dare let price fall, fracking becomes uneconomic and capitalism works again and the flow stops. Bakken output in November (the latest month for which we have data) was down as WTI dropped under $90.

With WTI up from $82 about 2 months ago to today’s $96 and Brent nudging along at the same rate, we can expect about 1.5% GDP drag. Lots of drags on GDP upcoming this year.


10 posted on 01/18/2013 5:56:45 PM PST by Owen
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To: PA Engineer

The Cline Shale formation in the Permian basin of west texas will probably get press in the next year or two as being in the same league as Baaken and eagle ford.


11 posted on 01/18/2013 6:04:32 PM PST by ckilmer
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To: Erik Latranyi
I have a friend who's a refinery safety officer (I think I have his title right..) not far from me in Romeoville, IL. He says they're growing and modernizing like gangbusters - they can't get upgrades done quick enough.

As much as I hate these high gas prices, I'll pay 'em as long as it means AMERICANS are working, and driving AMERICAN ingenuity.

12 posted on 01/18/2013 6:11:29 PM PST by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: MinorityRepublican

And you know zero deplores every barrel of it.


13 posted on 01/18/2013 6:17:18 PM PST by txhurl
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To: ckilmer
The Cline Shale formation in the Permian basin of west texas will probably get press in the next year or two as being in the same league as Baaken and eagle ford.

Wow. That one was off my radar because of what is happening locally. This is very interesting:

Estimates are the Cline could hold more than 30 billion barrels of recoverable oil, exceeding both the Bakken fields in North Dakota and Eagle Ford in South Texas by nearly 50 percent. With the Cline projected to be 200 to 550 feet deep, that would be the equivalent of 10 Eagle Ford shales stacked on top of each other. The shale contains 85 percent oil and liquids-rich gas.

The United States could easily be energy self-sufficient as well as a major player in the export market for years to come. The only things I see holding it up are qualified manpower mobilization and green utopianism.
14 posted on 01/18/2013 7:07:21 PM PST by PA Engineer (Liberate America from the Occupation Media.)
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To: PA Engineer
And the extended Monterey Shale...

California has long been an oil-producing state, but it’s getting renewed attention because of the Monterey Shale, the country’s largest shale oil resource. It stretches under a large part of Central California. In places like Southern Monterey County, where new oil leases are being offered, the battle for fracking is heating up.

On December 12th, the federal Bureau of Land Management is opening 18,000 acres for oil leases in Monterey, Fresno and San Benito Counties.

The Monterey/Santos shale play in southern California was estimated to hold 15.42 billion barrels, or 64 percent of the total. By comparison, the Bakken Shale was projected to hold 3.59 billion barrels of shale oil resource and the Eagle Ford 3.35 billion.

So the Monterey could hold twice as much recoverable shale oil as the Bakken and Eagle Ford combined.

15 posted on 01/18/2013 8:23:52 PM PST by spokeshave (The only people better off today than 4 years ago are the Prisoners at Guantanamo.)
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To: PA Engineer
And the extended Monterey Shale...

California has long been an oil-producing state, but it’s getting renewed attention because of the Monterey Shale, the country’s largest shale oil resource. It stretches under a large part of Central California. In places like Southern Monterey County, where new oil leases are being offered, the battle for fracking is heating up.

On December 12th, the federal Bureau of Land Management is opening 18,000 acres for oil leases in Monterey, Fresno and San Benito Counties.

The Monterey/Santos shale play in southern California was estimated to hold 15.42 billion barrels, or 64 percent of the total. By comparison, the Bakken Shale was projected to hold 3.59 billion barrels of shale oil resource and the Eagle Ford 3.35 billion.

So the Monterey could hold twice as much recoverable shale oil as the Bakken and Eagle Ford combined.

16 posted on 01/18/2013 8:24:48 PM PST by spokeshave (The only people better off today than 4 years ago are the Prisoners at Guantanamo.)
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To: spokeshave

And the Green River Formation ...estimated at 3 TRILLION barrels of oil, with 1 Trillion barrels of oil recoverable with today’s technology ...(equal to the total known reserves of oil in the rest of the world)


17 posted on 01/18/2013 8:28:01 PM PST by spokeshave (The only people better off today than 4 years ago are the Prisoners at Guantanamo.)
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To: MinorityRepublican

I wish they’d stop saying hydraulic fracturing is new technology, we’ve been doing it for over 50 years and have been fracing for over 100 years. My grand fathers brother was killed outside of Hobbs New mexico back in the 20’s when the 40 quarts of nitro he was hauling to a well site for a frac job blew up. Lets just say they never found him.


18 posted on 01/19/2013 3:44:14 AM PST by Dusty Road
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To: PA Engineer

We don’t talk about it much.


19 posted on 01/19/2013 3:52:28 AM PST by Dusty Road
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To: usconservative

BP Whiting Refinery Modernization Project has over 15,000 contractors on-site.

The safety program is rigorous and they throw violators out left and right.


20 posted on 01/19/2013 6:45:17 AM PST by Erik Latranyi (When religions have to beg the gov't for a waiver, we are already under socialism.)
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To: Erik Latranyi

I’ll bet they do. My friend who works at the refinery I described above says much the same thing. There’s zero tolerance for safety violations.


21 posted on 01/19/2013 7:43:00 AM PST by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: PA Engineer

the other thing about the cline formation is that its much cheaper to extract the oil and get it to market. by how much? not sure. they say its the oil is shallower and nicely stacked in layers. plus the infrastructure to get it to market is available. likely the innovation with reusing water will lower costs too.


22 posted on 01/19/2013 3:18:12 PM PST by ckilmer
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To: ckilmer
the other thing about the cline formation is that its much cheaper to extract the oil and get it to market. by how much? not sure. they say its the oil is shallower and nicely stacked in layers. plus the infrastructure to get it to market is available. likely the innovation with reusing water will lower costs too.

Texas actually has many of the waste injection wells. This brings their average cost per well down substantially. In the Northeast, it adds about $800K average. We do have a substantial amount of infrastructure available for both Marcella and Utica. The problem here is the gathering lines are more like transmission.
23 posted on 01/19/2013 4:47:18 PM PST by PA Engineer (Liberate America from the Occupation Media.)
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To: ckilmer

Ohio seems to have plenty of oil more oil condensates. but isn’t Pennsylvania mostly about natural gas?

The point about cost is that sometime between now and 2016 the price of oil is going to swoon under supply pressure. the high cost drillers especially in the Bakken will have to lay off new drilling.


24 posted on 01/20/2013 12:03:12 PM PST by ckilmer
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