The U.S. Geological Survey didn’t get much press coverage a few days ago when it announced a new assessment of a potential 49-year (or more) recoverable oil supply in shale formations of west Texas and southeast New Mexico. It projects a potential for American energy independence which is even more encouraging than existing fracking formations which are now driving hydrocarbon energy down to more affordable prices.
December 10, 2018 Commentary by Jerry Carlson — The newest announcement of huge American hydrocarbon reserves is a “generational gift” for every American farming family. Previously, estimated U.S. petroleum reserves had been projected as a 50-year supply. This new announcement roughly doubles previously known reserves.
The USGS report says: “Using a geology-based assessment methodology, the U.S. Geological Survey assessed undiscovered, technically recoverable continuous mean resources of 46.3 billion barrels of oil and 281 trillion cubic feet of gas in the Wolfcamp shale and Bone Spring Formation of the Delaware Basin in the Permian Basin Province, southeast New Mexico and west Texas.”
Here are several of the major geopolitical benefits for your future:
1. Your costs for diesel fuel, nitrogen and crop-drying energy should remain moderate through the foreseeable future. America is no longer hostage to imported oil from volatile, potentially hostile nations. We can recall reporting on the politically-propelled “energy crisis” which ignited 45 years ago in October 1973: Syria and Egypt attacked Israel and President Nixon flew munitions and arms for Israel’s self-defense. Arab countries abruptly embargoed petroleum shipments to the U.S., propelling oil prices from $3 a barrel to $12. Fuel shortages for farming were real. Gas lines formed in cities. That crisis spurred an American drive toward less dependence on imported energy.
Those old Mideast animosities remain today: Syria is arming for a possible attack on Israel again, this time with Russian technology and Iran’s backing. But America is far freer to support friends and oppose foes than in the early 1970s.
2. America can restrain the oil profits of adversary oil-exporting nations like Russia and Iran by reducing our imports and exporting energy into their markets. New technology for shipping liquified natural gas in 40-foot container cylinders — much like anhydrous ammonia tanks — could open vast overseas sales for newly abundant American natural gas. The container-sized tanks could travel on huge container ships, which would be far less costly than building fleets of supercooled, pressurized tanker vessels.
3. Energy independence fortifies all other projections of American strength, including military and economic power. It’s a foundation under this administration’s tough stance on achieving fair trade with nations like China. Further, the continental U.S. has massive untapped coal reserves awaiting clean technologies for conversion into useful energy. Current coal reserves are estimated at 475 billion recoverable tons, a 350-year supply.
4. The economic structure of the oil and natural gas extraction industry is shifting away from a few huge producers, dependent on large single fields, to hundreds of small hydraulic fracturing enterprises scattered over hundreds of square miles. This kind of innovative, entrepreneurial production is more like our farming system: near-perfect competition, rather than a few multinational majors with the implicit ability to manage prices and production like a cartel. The ripple effect of many drillers and shippers across large swaths of our Plains states could lead to more ag production in those regions, too.
The USGS full news release is at this link.
MONEY magazine published a report on the announcement at this link.
And you can read a PDF of the detailed USGS assessment at this link.