This week, the U.S. broke yet another energy record. For the first month in almost twenty years, we produced more oil here at home than we imported. This has been a remarkable turnaround in our nation’s energy sector. Just a few years ago, Peak Oil theory reigned, and these theorists had convinced most of the country that it was only a matter of time until the U.S. ran out of oil completely. People scoffed at the idea of lowering America’s oil imports, let alone getting to a place where our country could become increasingly energy secure. So much for that.
Now, we are in the midst of what’s now called being called the “shale revolution,” brought on by advancements in the technologies of horizontal drilling and hydraulic fracturing. And this has unleashed a surge of production in the United States. Guess who are the pioneers of these technologies? You got it — independent producers, the wildcatters. These companies, such as Mitchell Energy which was acquired by Devon Energy, an IPAA member, risked everything to combine and develop horizontal drilling to a point where producers could extract oil and natural gas from tight, shale rock.
That risk paid off. Other independents followed suit, opening up oil and natural gas plays that the industry elites doomed were offline forever. Now, the majors are in on the game, with companies like ExxonMobil focusing increasing on the U.S. shale plays.
Now, the Energy Information Administration announced Wednesday that crude oil production, from the Bakken in North Dakota to the Eagle Ford in Texas, has topped more than 7.7 million barrels per day. The decreased imports and increased production has great implications for America’s economic and national security picture. For one thing, it is decreasing our trade deficit as we buy more energy here at home. Also, because of increased natural gas production and its associated low cost, manufacturing is coming back to the United States, which means thousands more jobs on top of the millions of jobs created by both oil and gas directly and the indirect jobs that come from development.
Of course, this week, White House Press Secretary Jay Carney has been touting these numbers as a demonstration of the administration’s own energy policies. But IPAA knows and has informed the country that increased production is occurring in spite of the President’s policies, not because of it. Take the President’s new proposed rule from the Department of Interior, which would impose a federal standard on hydraulic fracturing on federal lands, which the states have successfully regulated for years. This bodes major trouble for independent producers who have already been driven from federal lands because of additional burdensome regulations there.
One of IPAA’s major priorities is to fight this encroachment of federal government on the shale revolution and ensure that production increases and our imports continue to decrease. IPAA has submitted comments pushing back on this misguided rule and this was a major topic at IPAA’s 84th Annual Meeting last week, when our members gathered in San Antonio. After all, development of onshore oil and natural gas is occurring safely and responsibly and is already subject to many federal environmental regulations. Let’s not jeopardize this energy achievement with more bureaucracy from Washington.