Wednesday, October 24, 2012

US EPA Standing By to Shut Down US Energy Boom

This article was previously published on Al Fin

Today we bring you some good news, and some bad news, about the US shale revolution -- which has been the saving grace in the US economy over the last few years.

First, the good news:
Image Source
The U.S. shale boom... has transformed the U.S. energy sector. Shale gas alone is now 10 percent of the overall energy supply in the country.

A surge in unconventional oil and gas extraction nationwide will trigger more than $5.1 trillion in capital spending and support a total of 1.7 million jobs this year, a number that will swell to almost 3 million by 2020, a leading consultant said in a study released Tuesday. _IBT

Now, the bad news:
...the Obama administration is working to increase federal control over hydraulic fracturing in the United States. In April of this year, President Barack Obama issued an Executive Order on hydraulic fracturing that created a working group of 13 executive branch departments to coordinate policies between departments, share research and information on hydraulic fracturing, and ensure that the federal government spoke with one voice on the subject. This was in response to actions being undertaken by the Environmental Protection Agency to release new air pollution regulations for shale gas drillers and by the Department of Interior to release new hydraulic fracturing regulations for drilling on public lands.

In April, the Environmental Protection Agency (EPA) required drillers to capture emissions of certain air pollutants (volatile organic compounds and methane) from new wells. Drillers can burn the pollutants at the wellhead until the start of 2015, when EPA expects that enough equipment will be available to capture the pollution.[ii] The original proposed rule issued by EPA in 2011... was estimated to reduce oil production from hydraulically fractured wells by up to 37 percent and reduce federal royalties by $8.5 billion and state severance taxes by up to $2.3 billion due to reduced drilling and production.[iii]

While other countries are using hydraulic fracturing to increase production and revenues, the United States – which pioneered the technological breakthroughs that led to the practice — is looking to lower oil and gas production and increase costs by increasing regulations on the technology. To date, hydraulic fracturing has helped to reduce our dependence on imported oil and natural gas, lower natural gas and electric utility bills, and increase employment in states where shale oil and natural gas are produced. It looks like hydraulic fracturing should be a win-win relationship for domestic production and consumption of oil and natural gas, but the Obama Administration has proposed changes that threaten that through increased regulations, despite the fact that the states have successfully regulated that industry for half a century or more. _IER

Obama conveniently (and duplicitously) claims credit for the shale revolution, while his administration works behind the scenes to clamp down on the technologies which made the revolution possible.

Plentiful oil & gas opens the door to a wide range of other industries to grow -- and to return to the US from overseas. No wonder Obama wants to stop it.

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