According to a Reuters article written by Tom Doggett that ran in mid-February, not expanding domestic drilling could cost the US $2.4 trillion over the next two decades. And US imports of oil, petroleum products, and natural gas could increase by $1.6 trillion over the period without access to these energy resources. These numbers come from a report prepared for the National Association of Regulatory Utility Commissioners by SAIC Corp., a consulting service based in McLean, Virginia. The report also says that the US is expected to pay OPEC $607 billion for an extra 4.1 Bbbl of crude over that twenty-year period. Congressional and presidential bans on drilling in most US offshore areas outside the western and central Gulf of Mexico ended in 2008, and the Department of the Interior is now considering whether to expand exploration in a very small part of the formerly closed areas. The article quotes President of the American Gas Association David Parker’s view that something needs to change. “It’s clear from this report that the status quo on energy production simply won’t suffice. We encourage lawmakers to heed the results of this study and take a closer look at the energy-rich areas in our country that are currently off limits.” Unfortunately, at a juncture where an informed decision could make the difference between ensuring energy dependence and approaching energy independence, the US is about to head down the wrong path. According to the Reuters article, this study raised estimated US oil and gas resources available in all areas based on advanced drilling technology and easier development of shale gas. Crude oil estimates were increased by 43 Bbbl to 229 Bbbl, and natural gas was raised by 286 Tcf to 2,034 Tcf. Though many within the US like Republican Governor of Virginia, Robert McDonnell, want to increase offshore drilling, (see last week’s blog) legislators continue to stand in the way. Perhaps a serious look at the numbers could alter our course.
Recommended Reading
Feds Approve Preliminary Restart of Freeport LNG’s Texas Facility
2023-01-26 - Freeport has yet to seek permission from federal regulators to restart the liquefaction trains, and analysts have said they expect most of the plant's production to remain offline until March or later.
Freeport LNG Seeks US Approval to Restart Loading at Texas Export Plant
2023-02-03 - "Reinstatement of Dock 1 LNG loading services will allow Freeport to recommence normal LNG ship dockage and loading operations," according to the company's U.S. Federal Energy Regulatory Commission filing.
Freeport LNG Says Texas Plant Repairs Completed, Seeks to Restart Some Operations
2023-01-24 - According to the U.S. Federal Energy Regulatory Commission, Freeport LNG asked for permission to begin introducing LNG into its Texas plant's piping system.
Natgas Stops Flowing to Freeport LNG Export Plant in Texas
2023-02-07 - The plant is not expected to return to full power until at least March and is still waiting for permission from federal regulators to start loading LNG on ships to free up storage tank space.
Fire-idled Freeport LNG Seeks U.S. Approval to Start One Unit
2023-01-31 - Freeport LNG's request represents a milestone in efforts to restore production after a seven-month outage at the second-largest U.S. LNG.