Obama's energy blind spot

Robert Bryce:

...It’s not the size of your reserves that counts, it’s what you do with them. And the U.S. oil and gas sector has been remarkably proficient at exploiting this country’s vast mineral wealth. Over the past century or so, oil and gas drilling has gone from a business dominated by wildcatters armed mainly with a hunch and a prayer to one where the latest seismic and “geosteering” technologies allow drillers to steer their bits so accurately that they can arrive within inches of their target zone two miles (or more) beneath the Earth’s surface. 

Add in ongoing improvements in horizontal drilling—and yes, in hydraulic fracturing, the bugaboo of many environmental groups—and the changes are easily seen. For instance, over the last five years, Southwestern Energy, a Houston-based company drilling in the Fayetteville Shale in Arkansas, has halved the number of days it takes to drill an average well while nearly tripling the amount of gas it gets during the initial phase of production. Southwestern has done it by tweaking the fracturing process while more than doubling the length of the horizontal segments, so that more of the well is in contact with the source rock. 

These improvements are allowing drillers to extract enormous amounts of both oil and gas from rock formations (like shale) that only a few years ago were thought to be uneconomic. The result: Drillers are unlocking vast quantities of hydrocarbons and in doing so, they are adding lots of new reserves.... 

As a result, we see the same kind of numbers when it comes to domestic production of natural gas, the cleanest of the hydrocarbons. The United States sits atop only 4.1 percent of the world’s natural gas reserves. But the United States is, by a wide margin, the world’s biggest gas producer. In 2011, the nation produced a record quantity of the fuel, some 23 trillion cubic feet, or about 20 percent of the world total. Compare that performance with Iran, a country that sits atop 16 percent of the world’s known gas reserves (only Russia’s reserves are larger) and yet produces just 4 percent of the world’s natural gas. In fact, as recently as 2009, Iran was a net natural gas importer. 

Obama has repeatedly made the claim that “clean” energy is the way of the future. But the president dares not admit the obvious: Over the past few years, the oil and gas sector has out-innovated the political darlings of the moment: solar and wind energy. Four years ago this month, natural gas prices were over $10. Today, the price is about $2. Despite all of the hype—and billions of dollars in subsidies doled out to solar and wind energy projects over the past few years—the clear reality is that horizontal drilling and hydraulic fracturing and the incremental production gains that have resulted from them, have resulted in a tidal wave of new natural-gas production that is pricing wind and solar energy out of the market....If anyone doubts how the shale revolution has changed the domestic oil and gas sector, they need only visit Midland, Texas, a town that is in the midst of an unprecedented boom. New construction is visible all around the city. Truck traffic is constant. And much of that construction and traffic is to support surging oil and gas production from geologic zones like the Sprayberry and Wolfcamp that were thought to be uneconomic just a few years ago. 

...  Indeed, the shale revolution has so fundamentally changed the global energy equation that last month, analysts at Citigroup led by Ed Morse predicted that U.S. oil production could exceed that of Russia and Saudi Arabia within the next three years or so....

It was not that long ago when it was difficult to sell a home in Midland and other areas of West Texas.  That is no longer the case.  The ignorant argue that there is not that much in the way of spin off jobs from the oil and gas business, but they will find in Midland and all over south Texas where drillers are poking holes in the Eagle Ford formation there are jobs from drivers to construction to retail that are getting difficult to fill.

Bryce's larger point is that Obama has been using a deceptive statistic in an attempt to justify his administration's anti oil and gas policies.  Obama's politics of fraud is getting harder to sustain.