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How North Dakota Became Saudi Arabia

Stephen Moore, Wall Street Journal
Harold Hamm, discoverer of the Bakken fields of the northern Great Plains, on America’s oil future and why OPEC’s days are numbered.

Harold Hamm, the Oklahoma-based founder and CEO of Continental Resources, the 14th-largest oil company in America, is a man who thinks big. He came to Washington last month to spread a needed message of economic optimism: With the right set of national energy policies, the United States could be “completely energy independent by the end of the decade. We can be the Saudi Arabia of oil and natural gas in the 21st century.”

. . . Mr. Hamm calculates that if Washington would allow more drilling permits for oil and natural gas on federal lands and federal waters, “I truly believe the federal government could over time raise $18 trillion in royalties.” That’s more than the U.S. national debt, I say. He smiles.

This estimate sounds implausibly high, but Mr. Hamm has a lifelong habit of proving skeptics wrong. And even if he’s wrong by half, it’s a stunning number to think about. So this America-first energy story isn’t just about jobs and economic revival. It’s also about repairing America’s battered balance sheet. Someone should get this man in front of the congressional deficit-reduction supercommittee.
(1 October 2011)
Suggested by EB contributor and petroleum geologist Jeffrey J. Brown who writes:

“The latest Cornucopian fantasy du jour in the WSJ follows. As a Peak Oiler, I am beginning to feel like one of the defenders of the Alamo–surrounded on all sides by vastly larger Cornucopian forces.

“Imagine if you will, that in 2005 I predicted that average global crude oil production for 2006 to 2010 would be less than the 2005 rate (following a very rapid increase in global crude oil production from 2002 to 2005) and that Global Net Exports would show a measurable decline, with China & India taking an increasing share of what is net exported, and that because of all of the following annual oil prices would all exceed the $57 level that we saw in 2005, with four of the five years showing year over year increases in oil prices. And that the US in 2011 would remain dependent on oil imports for two out of every three barrels of oil that we process in US refineries. And I then I told you that the dominant theme in the media in 2011, given all of the foregoing, would be forecasts for steadily rising global oil production, with the only question being when, not if, that the US would meet all of its energy needs from domestic sources. “
(1 October 2011)

Deepwater Gulf of Mexico: Reserves versus Production – Part 1: Thunder Horse & Mars-Ursa

Jean Lahérrere, The Oil Drum
Jean thoroughly analyses field production data for the Gulf of Mexico (GOM) in several posts. The goal of this series is to compare the evolution of reserves estimates in the GOM with the actual production figures that show the oil decline. Thereby the reliability of reserve estimates can be investigated. This first installment shall look into Thunder Horse and Mars-Ursa fields.

… Conclusions to this installment

Regarding Thunder Horse, there is not enough public data from the operator on future drilling to get a reliable extrapolation from the past production. But it is likely that the latest MMS estimates (MMS 2009-064 for 2006 reserves) are optimistic. It will be interesting to see the new estimate by BOEMRE, lacking data for the last two years!

As for the Mars/Ursa complex, the monthly oil production versus cumulative production with watercut shows a decline in line with the reserves ultimate of 1208 Mb estimated by the MMS in 2006. Shell indicates that the new Mars B will bring secondary recovery (by waterflood as in Ursa) and access to new fields.

(30 September 2011)

‘Peak Oil’ Takes A Deadly Blow

Alexander Cockburn, Truthout
I’ve never believed in “peak oil.” (The notion held with religious conviction by many on the left here, that world production is topping out — and will soon slide, plunging the world into economic chaos.) There’s plenty of oil, with the constraints, as always, being the cost of recovery. Witness the vast new North Dakota oil shale fields. I regard oil “shortages” as contrivances by the oil companies, allied brokers and middlemen to run up the price. I fill my aging fleet of 50s and 60s era Chryslers with a light heart. The 59 Imperial ragtop and the 62 Belevedere wagon get around 18 mpg, which is still way ahead of the SUVs.

Contrary to the lurid predictions of declining U.S. oil production, disastrous dependence on foreign oil and the need for new offshore drilling, not to mention the gloom-sodden predictions of the “peak oil” crowd, the big crisis for the U.S. oil companies can be summed up in a single word that drives an oil executive to panic like a lightning bolt striking a herd of snoozing Longhorns: glut.
(30 September 2011)
Alexander Cockburn can act like the Left’s equivalent of Glenn Beck (self-indulgent, lack of respect for facts). Cockburn not only does not get peak oil, but also rails against climate change. His writings on these subjects are an embarassment – like a garrulous old uncle. He is worth pointing to as evidence that peak oil and climate denial is not restricted to any part of the political spectrum.

In his favor, Cockburn has helped run the muckraking Counterpunch for about 15 years — quite an achievement. And when Cockburn does get something right, he is fearless in pursuing it.
– BA

Winnow out biases in energy issues tome

Matthew E. Havens, Winnipeg Free Press
Energy, Security, and the Remaking of the Modern World
By Daniel Yergin
The Penguin Press, 816 pages, $38

ASTUTE readers may detect the biases of an oil-industry apologist in this heavyweight tome that tackles many of the top energy issues of the last decade, among them terrorism, the 2003 invasion of Iraq and climate change.

American author Daniel Yergin won a Pulitzer in 1992 for his epic and detailed history of the global oil industry, The Prize. Since then, the Washington-based guru has made a pile of money as the head of a firm that consults for energy companies and government.

The Quest, unfortunately is not as ground-breaking or timely as The Prize.

The geopolitical energy overview that Yergin attempts here has been undertaken recently by scores of authors, some of whom, such as Michael Klare in Rising Powers, Shrinking Planet and the lesser-known but brilliant Dilip Hiro in Blood of the Earth, arguably do a better job.

Yergin shows that he is still among the masters of the craft when narrating the histories of the post-Soviet oil industry, climate-change science and policy, and the renewable energy industry.

But there is an evident change in Yergin’s approach to geopolitics since the early ’90s. When he moves into more controversial subject matter, his historical objectivity becomes questionable.
(24 September 2011)