Thanks, oil companies!
Two of many things to be grateful for today are that:
1. America's oil companies are creating, in Bloomberg's headline, "OPEC's worst nightmare," and
2. Barack Obama is no longer in office and able to prevent them from liberating us from dependence on hostile powers for our energy.
Those who have driven any distance to celebrate Thanksgiving realize that oil prices are dramatically down, and, while there will be fluctuations ahead, the outlook is positive for dramatically increased American oil production. Via Bloomberg, we learn that the Permian Basin in Texas alone is set to disturb sleep in Caracas, Tehran, and Moscow:
In Houston, the U.S. oil capital, shale executives are trying out different superlatives to describe what's coming. "Tsunami,'' they call it. A "flooding of Biblical proportions'' and "onslaught of supply'' are phrases that get tossed around. Take the hyperbolic industry talk with a pinch of salt, but certainly the American oil industry, particularly in the Permian, has raised a buzz loud enough to keep OPEC awake.
"You've got an awful lot of production that can come in very economically,'' said Patricia Yarrington, Chevron Corp.'s chief financial officer. "If you think back four or five years ago, when we didn't really understand what shale could do, the marginal barrel was priced much higher than what we think the marginal barrel is priced today.'' ...
August saw the largest annual increase in U.S. oil production in 98 years, according to government data. The American energy industry added, in crude and other oil liquids, nearly 3 million barrels, roughly the equivalent of what Kuwait pumps, than it did in the same month last year. Total output of 15.9 million barrels a day was more than Russia or Saudi Arabia.
By the way, "shale" refers to oil liberated via "fracking."
Bloomberg correctly points out that not only oil production, but pipeline infrastructure to get it to market is being put in place. These massive investments can pay off because fracking technology has improved so drastically that even at low oil prices (as low as OPEC can tolerate), production and distribution is profitable.
OPEC's bad dream only deepens next year, when Permian producers expect to iron out distribution snags that will add three pipelines and as much as 2 million barrels of oil a day[.]
In a slightly longer time frame, even more American oil production is going to be coming onstream far from Texas, as the Anchorage Daily News reports:
The North Slope oil patch is generating a surge of interest not seen in more than a decade, as investors eye new opportunities and companies plan billions of dollars in new projects, observers say.
Near-term, the upcoming winter exploration season is expected to be the busiest in five years, with ConocoPhillips leading the way, said Chantal Walsh, director of Alaska's Oil and Gas Division.
Long-term, oil companies are looking to complete projects by 2024 that could cost more than $10 billion. They could produce thousands of jobs, if developed.
"The North Slope is back," said Mark Myers, who formerly ran the U.S. Geological Survey and Alaska's Natural Resources department. "It was never gone in my opinion, but it's getting recognized now."
Helping spark "The New Alaskan Oil Rush," in the words of one trade publication, are two giant discoveries on the western side of North Slope development. Officials say there's potential for more discoveries in the region where those were made, in a long-overlooked geological formation called the Nanushuk.
Barack Obama was dead wrong on a lot of subjects, but his dismissive attitude toward increasing oil production is one of his most consequential positions that was foolish, harmful to America, and logically impossible:
In 2012, no less an authority than Barack Obama told us that calling for increased production by increased drilling – "drill, baby, drill," he called it – was not a plan, but rather "a bumper sticker." Mr. Obama assured us, "You know, we can't just drill our way to lower gas prices," as if all the people who disagreed with him were simply refusing to admit that, deep down, they were wrong and he was right.