1. Just before Thanksgiving, Reuters ran this report detailing a process now in use by Apache Corporation that is enabling it to perform hydraulic fracturing operations in one of its Permian Basin operational areas without using any fresh water resources at all. Apache recycles and reuses 100% of its returned water and mixes it with brackish water drawn from the deep Santa Rosa aquifer. In this way, Apache avoids competing with local communities and famers for fresh water resources.
Throughout its 160+ year history, the oil and gas industry has always addressed major issues and problems through rapid advancement in technology. This has been one of the most consistently enduring realities that has enabled this great industry to provide so many benefits to our society. Apache Corporation is at the leading edge of an industry-wide movement to reduce the use of fresh water in frac jobs and other areas of operation. That's good for Apache, good for the industry, and good for the country.
2. On November 30, Dr. Mark Perry of the American Enterprise Institute reported that oil production in the state of Texas had risen in September to levels not seen since 1980. At a daily production rate of 2.726 million barrels, Texas today produces roughly 35% of all the oil produced in the United States. Remarkably, the state’s oil production has doubled in just 29 months, and September the 25th consecutive month that Texas production rates increased by more than 25% on a year-over-year basis.
This is all thanks the massive oil reserves contained in the Eagle Ford Shale in South Texas, and the Permian Basin in West Texas. In the coming years, these two regions are likely to find themselves in a competition with one another to determine which will become the single largest oil reservoir ever discovered in the North America.
3. The beleaguered lobby for corn-based ethanol continued to find itself on the short end of the stick after EPA decided to reduce its mandate for 2014. A good example is this report detailing the major problems that ethanol forced by the EPA to be added to gasolines causes in the small, high-compression engines that run snow blowers, lawn mowers and other outdoor equipment.
It’s the kind of unintended consequence that inevitably follows stupid policy decisions, and there is no more stupid and useless government policy in America than forcing refiners to blend corn-based ethanol into our gasolines. Rather than simply reducing the mandate for 2014, the smart thing for EPA to have done would have been to abolish the program altogether. But that would have just made too much sense.
4. This terrific piece from Deroy Murdock ran in several major media outlets during the past week. In it, Mr. Murdock chronicles the many environmental advantages of natural gas produced through hydraulic fracturing techniques from shale formations. But given all the often hysterical focus on water usage from Fracking protesters and in some of the news media, we found this passage the most interesting of all:
Water is a precious resource: So, conservationists should smile at how little water fracking requires versus other energy sources. According to the U.S. Energy Department and the Ground Water Protection Council, it typically takes three gallons of water to produce 1 million British Thermal Units of energy from deep-shale natural gas/fracking. Nuclear power requires 11 gallons/million BTUs. Coal: 23 gallons. Corn ethanol? A whopping 15,800 gallons. And soy biodiesel requires nearly triple that amount: 44,500 gallons per million BTUs — 14,833 times the water needed for fracking.
All you environmentalists who love to promote “green” alternative fuels, please note which two come out far, far on the tail end of that particular equation.
No, the ‘news’ here is that the news media in California appear to be catching onto the gag, as evidenced by this editorial run by the Fresno Bee on December 3. Rather than just run the typical report on the fact that the protesters were there, with the obligatory accompanying photo that is carefully cropped in order to avoid showing readers just how tiny this group really is, The Bee instead examined what exactly these folks want to do, and analyzed how utterly absurd their views are.
Thus, the title of the piece is “Call for fracking moratorium is sheer nonsense”, which is likely the nicest thing the editors of the Bee could think to say about it. Here is the key passage:
Brown's reward for trying to reduce dependence on foreign oil while putting people back to work is the scorn of environmentalists. For the past three months, they've been following the governor to events, heckling him and demanding a moratorium on fracking. How far from the mainstream are the people seeking a moratorium? Gina McCarthy, who was confirmed as the new administrator of the Environmental Protection Agency in July, opposes a moratorium while the federal government studies fracking's impacts.
Editorials such as this certainly won’t stop the protesters, most of whom, after all, make their livings in this way, and have no real clue at all what it is they are actually protesting. But this kind of smart, truthful and blunt rebuttal of their absurd ideas can help the average person on the street understand exactly how far out of the mainstream and frankly, beyond the pale of civil discourse these mindless professional protesters lie.
All of which sums up what has been a very interesting – and positive – couple of weeks for America’s oil and natural gas industry.
