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January 28, 2013
In the black days following the Obama administration's inaugural revels, some good news is always welcome. And the WSJ has just furnished us with some good news, indeed.
The news concerns the growth of American oil production. Last year it increased by the largest amount since we started domestic production back in 1859. In fact, production was up by nearly 780,000 barrels per day (bpd), making our average production the highest in 15 years at 6.4 million bpd.
The result is that our total net oil imports dropped by almost 7%, which is also a 15 year low. And Valero Energy has announce that it will expand its refining facilities in Texas to refine the new product, the first expansion of refining in years.
This is in addition to our record high natural gas production, reflected in its record low prices.
The additional good news is that next year will be even better -- the projection is for an increase in oil production of 900,000 bpd. In fact, Exxon Mobil -- one of the heroes of the story -- now projects that our energy production soaring together with Canada's as well will make North America energy independent in 12 years.
Who should be given credit for this explosion of production? In his re-election campaign, Obama boasted that it was his administration that made this possible. Of all the outrageous lies he has told, this has got to be the biggest.
The primary reason for the explosive growth of North American fossil fuel production is the innovation in extraction technology -- not big government. In the U.S., the technological innovation is two-fold: fracking, i.e., hydraulic fracturing of shale rock to release its treasures of natural gas and petroleum. (In the case of Canada, it is due to their new techniques for extracting oil from their immense tar-sands formation).
Our new technologies have enabled old fields (such as the Permian Basin in Texas) that were thought to be essentially played out to flourish once again, and opened previously unusable formations (such as the massive Bakken shale field in North Dakota) to produce new supplies. Production from the Bakken field in particular has shot up from 125,000 bpd in 2007 to 750,000 bpd last year.
None of this technological innovation is due in any way to the Obama administration. It has not given any financial support to these innovations; indeed, they were developed long before his benighted regime assumed power. No, Obama corruptly chose to squander the vast majority of federal R&D spending on grotesquely inefficient so-called "green energy" sources, including proven losers such as solar and wind power (which produce their inconsistent and comparatively feeble streams of energy only with massive taxpayer subsidies), and new bizarre losers such as algae-derived biofuel.
Nor has the Obama administration in any way lessened or even just held constant the onerous regulatory barriers the oil and gas producers have to overcome to extract and refine their products. On the contrary, Obama has increased massively those regulations across the board, with the especially aggressive EPA fighting fracking all the way. Of course, this is nothing compared to the fury it has directed against coal!
Nor yet has this green administration shown any willingness to open up more of the huge expanse of federally-owned land -- the federal government owns about 650 million acres, or about 30% of the land in this country -- to leasing for fossil fuel production. No, quite the reverse: it has locked up even vaster stretches of the country as wilderness areas, and clamped down on Gulf leasing. The explosion of production is taking place on predominantly private property.
The credit for the growth in our energy production goes solely to the private corporations that have surmounted all of the hurdles this green regime has put in its way.
Imagine what a truly honest and pro-energy administration could accomplish. It could develop a gusher of revenues from dramatically increasing the leasing and-even better-the outright sale of modest amounts of public lands to energy developers that could eliminate our budget deficit without raising taxes.
Gary Jason is a senior editor of Liberty and author of the recent book Dangerous Thoughts.
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