Why "drill, baby, drill" was right

It’s always a pleasure returning to the beautiful Lone Star State. This week I’m in Houston speaking with the industrious men and women of America’s oil patch at the North American Prospect Expo. These are the unsung heroes of our nation’s energy renaissance.

In the brutal economic environment of the last six years, one sector had good news to report, and it came straight out of America’s oil patch. From 2007 to 2012, employment in the energy industry rose a dramatic 31.6 percent while employment nationwide fell 2.7 percent. U.S. oil production increased from 6.5 million barrels per day in 2012 to 7.4 million barrels per day in 2013, and in December, the Eagle Ford Shale in South Texas produced its billionth barrel of oil. Thanks to American energy entrepreneurs’ drive and innovation, we’ve surpassed Russia and Saudi Arabia to become the world’s largest oil and gas producer. This truly is a great American success story, and it’s a proud moment for those of us determined to educate D.C. bureaucrats on the link between energy and our security and prosperity.

Apparently, the president is pretty proud, too. In his State of the Union address last month, he boasted about the surge in oil and gas drilling, saying, “We are as free from the grip of foreign oil as we’ve been in almost 30 years.” From the way he’s talking, you’d think he coined the phrase “drill, baby, drill.” But it was just three years ago while campaigning in Miami that he lectured, “We can’t just drill our way to lower gas prices.” Respectfully, Mr. President, “yes we can.” And yes we did. Average gas prices were well over $3 in 2012, but in the first months of 2015, they’re near $2, with some states enjoying even lower prices.

Despite his newfound appreciation for drilling, the president fails to mention that most production is on private and state lands out of his control rather than on federal lands he can over-regulate and lock up. In fact, under the Obama administration, natural gas production on federal lands — onshore and offshore — has fallen an astonishing 28 percent while production on private and state lands, many sitting atop prolific shale plays like the Bakken and Eagle Ford, thankfully increased by 33 percent. Similarly, under Obama, oil production on federal lands has fallen 6 percent but increased by 61 percent on nonfederal lands.

Though they like to take credit for this energy renaissance, politicians weren’t the ones who searched the shale formations for resources to extract. It was our private sector, and its responsible use of hydraulic fracturing and horizontal drilling, that spearheaded the shale gas surge.

Our nation is blessed with the natural resources, the knowledge and the workforce to now take this energy renaissance to the next level. What we lack is the political leadership and courage to do so. T. Boone Pickens summed up the problem by observing that “a five-minute conversation on energy can’t happen in Washington, because within three minutes, you’ve run out of everything they know.” The private sector’s natural adversary has always been the market forces of supply and demand, so the last thing it needs is the artificial adversarial forces of political machinations.

Alaskans understand both of these frustrations. We know the challenges of wildly fluctuating oil prices. During the heyday of our trans-Alaska oil pipeline, oil prices were high, the boom was on and state government spent fast. Then the bottom fell out: $9 per barrel. Alaskans drove around with bumper stickers that read, “Dear God, give us another oil boom and we promise not to piss it away this time.” Alaskans also know the frustration of fighting against politicians in D.C. who constantly attempt to lock up huge swaths of our resource-rich Arctic land and water. Just last month, the Obama administration released a plan to potentially expand offshore drilling in Virginia and the Carolinas while placing millions of acres in Alaska off limits to future development. The president’s advisers would have you believe he’s being pragmatic, but to those in Houston and Anchorage, it looks like pretzel logic.

If the administration sincerely wanted to help our domestic energy sector, it would lift the four-decade-old ban on exporting crude oil. American producers shouldn’t have to beg permission of our own government to export our resources while the White House negotiates increased oil exports with Iran. For an administration not shy about acting on its own, it has no excuse to ignore this and not even consider lifting the ban. I challenge the watchdog press to ask why this is so.

The energy sector has been a star athlete, and Washington is scrambling on the sidelines, unaware of how to react. Let’s remind them that our government is supposed to work for us, not get in our way. Let’s tell them, “Just watch.” Watch how America’s oil patch fuels our nation’s economic engine. Watch how continued investment, innovation, exploration and production allow the U.S. to remain the global economic powerhouse. Watch the men and women of America’s new energy boomtowns in states like Texas show the bureaucrats in D.C. that no matter what roadblocks are placed in their way, they’ll find a way through and build a stronger America.

In the 1970s Jimmy Carter touted shale as a possible energy source to get out from OPEC. Plus many other things like tides, wind, geothermal, ‘nucular’, coal gasification. Sigh.

Shale was the only approach that scaled economically, 40 years later.

My contention is that the collapse in the economy in 2008 would not have happened as violently, if at all, if energy prices remained stable or went down. The 2008 shock of $4.00 gas with no end in sight of future increases caused a hunker down effect that collapsed the financial system. And allowed Obama’s election.

The shale Jimmy Carter was talking about is the Green River Shale. It was mined and had to be baked to get the oil out of it. Expensive, in a word, and the major project ended when the price of oil went down. In today's environmentalist beleaguered world, that development would likely not have happened (especially in Western Colorado) at all. Unocal To Suspend Production At Parachute Creek Shale Oil Project and Colony oil shale project

SAnother attempt at extraction, Project Rulison was also deemed to be a failure.

But that was oil shale, not 'shale oil'.

Most of the current projects involve oil generated in shale source rock, but the Bakken, for example, has the oil trapped in the low porosity dolomite, sandstone, limestone, and siltstone in between the source shales, and the Three Forks gets its oil from the lower Bakken Shale.

If you buried the Green River Shales under a few thousand feet of rock and squeezed the oil into tight reservoir formations next to it, it would be similar to what is going on, geologically, with the Bakken.

The Green River Formation, however is at or near the surface, and does not lend itself to the same production methods.

Instead, attempts have been made to bake the oil out of the shale near the surface and drive it into other wells, but the results have been mixed and generally not economically feasible.

As a former Colorado resident, Parachute Creek was controversial to say the least.

I did not know the difference between oil shale and shale oil. I doubt many others do.

From what I read, the Bakken shale is so tight, that it could pass for construction purpose rock. I would expect it to ooze, but apparently it is dry to the touch. Is that how you understand it?

Oddly enough (or maybe not, because I am a geologist) I have handled both the Green River Shale near Parachute Creek and the Bakken in core samples. The Bakken isn't quite dry to the touch, but nearly so. In core it looks like roofer's asphalt when you peel the paper off, at least in the places I have seen it cored.

The Green River Shale I have seen ranges from blue gray to a light grayish brown, and up near Rio Blanco, has scads of insect fossils in it. (mostly gnats, bot fly larvae, and the occasional mosquito). There are supposed to be better bugs up near Douglas Pass, but the ones I found up there were weathered somewhat and not as nice as the small ones near Rio Blanco.

The deposit is considered to be lake bed sediments, and feathers and small plant fronds and leaves can be found in the Rio Blanco area as well.

For more information, this article is a start.

By contrast, the Bakken Shales (upper and lower) were laid down in a marine basin, and do not outcrop anywhere. They are completely contained in the subsurface. Considering the area of the Williston Basin, it is a huge area where oxygenation stopped and the organics were preserved to generate oil. Pressure and temperature, both a function of depth of burial, provided the mechanisms of oil and gas generation, with true vertical depths between roughly 8000 ft. and 10500 ft. being ideal in North Dakota. In the Elm Coulee Field in Montana the depths are a bit shallower, but the oil is there (there is only one Bakken Shale in most of the Elm Coulee field, the other having pinched out before you get that far west. The shale looks much the same as that in the deeper part of the Basin in North Dakota, black, vitreous to waxy, and breaks readily into small chunks, which can cause problems in a horizontal well because the hole will slough if you stray from the middle Bakken into either shale (upper or lower) and the drill string can get stuck--an expensive problem, necessitating drilling a sidetrack, and possibly causing the loss of a million or more dollars worth of downhole tools.

For more info on the Bakken, check out this website and wikipedia, which have pretty good basics.

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