Oil, Natural Gas and Coal Production in the United States

By
Real Estate Agent with Keller Williams Shore Properties 1005238

I've been going back and forth with another blogger in reference to opening more federal land to drilling and what impact it would have on gas prices and in helping secure a future free of foreign energy dependence.  I showed how oil production is at 8 year highs, that natural gas production is at record levels and that the US has exported more coal in 2011 then any other time in history.  But, of course, I get the "open more land/ocean for more production."

Then I came across this article in Forbes:

"Would you believe that on this very date, just one, short year ago, the oil companies were not using one-half of the public lands they had already leased from the government for exploration and drilling? We made the public land available to the oil companies, they took the leases but left almost half of them just sitting there—unexplored, undeveloped and certainly not pumping any oil. Why would they do this?

Because the price of oil —one year ago— didn’t make it worth the oil companies’ time and money to produce the oil that rested at these locations.

The information provided in a report from the Department of Energy indicates that the Department offered substantial acreage for potential oil and gas development in 2009 and 2010 that was not subsequently leased by bidding parties. In addition, for areas that are under lease, there are tens of millions of acres currently idle – that is, not undergoing exploration, development, or production."

This, more than anything I’ve seen presented to date, would appear to give the lie to the narrative that if you make more public land available to the oil companies, they will explore it, develop it and drill it—and that this will, somehow, lower the price of gasoline at the pump.

Here's the Forbes article.

Some Stats:

Annual totals in US oil, in barrels produced, going back to 2003:

  • 2003: 2,073,453,000
  • 2004: 1,983,302,000
  • 2005: 1,890,106,000
  • 2006: 1,862,259,000
  • 2007: 1,848,450,000
  • 2008: 1,811,817,000
  • 2009: 1,956,596,000
  • 2010: 1,998,137,000
  • 2011: 2,055,646,000

Natural Gas: Last year was another record-setter for the world's largest natural gas producer, as the U.S. produced all-time record amounts. According to a study by PricewaterhouseCoopers, the global consulting firm predicts that abundant, cheap gas will spark a U.S. manufacturing renaissance over the next several years, with the potential to create a million new jobs by 2025 and reduce annual energy costs for American manufacturers by almost $12 billion over the next decade.

Oh, and coal? The United States exported 107 million short tons of coal last year, up 31 percent from 2010 and the most since 1991, according to EIA. U.S. exports of steam coal, used mainly to fuel power plants, were an estimated 37 million short tons in 2011—the highest since 2008. Metallurgical coal exports reached record levels of roughly 70 million short tons.

Of course, none of these facts will make a difference to the folks who keep complaining that we aren't doing enough for domestic energy production.

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Rainmaker
1,235,860
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

The increase in production was approved under W - Obama had nothing to do with these increased numbers.

If Obama had not shut down drilling in the Gulf, the production numbers would be LARGER as several wells that were approved have had their rigs removed elsewhere for the CHINESE!

May 21, 2012 10:15 AM #1
Rainmaker
574,927
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

Perhaps you missed this part of the blog: "the oil companies were not using one-half of the public lands they had already leased from the government for exploration and drilling? We made the public land available to the oil companies, they took the leases but left almost half of them just sitting there—unexplored, undeveloped and certainly not pumping any oil."

Sure...give Bush credit, but don't blame Obama for a non-existant reduction in domestic energy production when the opposite are the facts.

May 21, 2012 10:22 AM #2
Rainmaker
574,927
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

And this: According to WTRG Economics, the number of drilling rigs in action today are roughly twice as many as when Barack Obama moved into the White House in 2009. Indeed, the same organization reports that—with the exception of a brief spike in drilling activity in 2008—we’ve got more rigs operating on U.S. soil and water today that at any time since the early 1980s.

May 21, 2012 10:32 AM #3
Rainmaker
161,892
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

Great job Karl. I looked into this myself and came with the same set of information. My research into this is the same as Ron Paul's conclusion:

May 21, 2012 02:30 PM #4
Rainmaker
463,382
Dale Bledsoe
Crown Key Realty - Tracy, CA
Realtor in Tracy, California

Much of the public land open to exploration has had extensive geological surveys completed, indicating a low chance of discovering a cost effective production field. Lets drill in the gulf and off the california coast, where we know the oil is.

May 22, 2012 02:26 AM #5
Rainmaker
161,892
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

@Dale - As Karl pointed out, production has increased. The only logical argument supporting the argument of further production is to state that demand has increased at a greater rate, therefore we need more ability to drill.

May 22, 2012 03:22 AM #6
Ambassador
940,057
Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Northwest Tennessee Realtor

This would explain why Warren buffet bought himself a railroad.

May 22, 2012 05:01 AM #7
Rainmaker
1,023,171
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

So why aren't prices going down?  Why do we allow these companies to export public owned resources instead of using them here to force prices down?  Once again Americans get fleeced by government and big corporations.

May 22, 2012 07:28 AM #8
Rainmaker
354,788
Dale Terry
Yadkinville, NC

Karl, the debate should still be about domestic energy being enough to supply our needs.  I will agree with you on some of your points, but elect to debate others.  First off, the price of oil has to high enough to justify drilling, so of course some of the land will not be drilled on immediately.  There is also not enough equipment, manpower, and other resources available to drill everywhere at once.  And of course, you can only put through a pipeline so much oil,  we can only refine so much oil at a time.  Much of our oil goes elsewhere because of refineries and higher prices abroad.  You are correct in that. how would you want our companies to act, should they not sell to the rest of the world? 

This administrations policies have been restrictive at best, but we must also include 30 years of US policy that pushed our production down and made/makes it easier to buy oil from other lands.  It was thought by the oil companies and the Bush administration that the "liberation" of Iraq would help with oil prices.  All it did was to push them up after the Iraqs went from 10 buck a barrel contracts to 3-5 times as much.  Now oil produced in Iraq is at spot price, not low contract price.

We also have people that are trying to push natural gas.  In the last few years we have discovered vast fields and are producing more than we consume.  We ship it to Europe and other countries.

Our dollar has dropped and oil is bought with dollars.  Ron Paul is correct.  Nothing will change that.  Wall Street is still wagering against the best interests of America.  That has not changed.

Obama has spent billions pushing for clean energy and green energy.  The price of oil has to be so high that those sources make sense.  Here is where I disagree with you.  They are failing.  The technology, although better than ever is still not there yet.  And having a government trying to pick winners(solar and wind) while still giving breaks to the current winners(oil and gas), makes no sense.  What we end up with is just another politician that has been bought off by special interests. 

The only way gas prices will go down is if we stop using it.  Period.

 

May 22, 2012 08:52 PM #9
Rainmaker
574,927
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

Now this is an intelligent conversation!  Thank you for the comments.  Let's not forget what the CEO of Exxon/Mobile said, when asked if his company might build more refineries in the United States to help protect the country against possible shortages of gasoline, he said, and I quote: “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.”

May 22, 2012 09:25 PM #10
Rainmaker
354,788
Dale Terry
Yadkinville, NC

Karl, he said it correctly, he only answers to his shareholders.  Now on the other hand, if we could stop buying his product, he would change his tune.

May 23, 2012 07:03 AM #11
Rainer
191,658
Virginia Cheezum
F. C. Tucker Company - Indianapolis, IN

Look it up, Karl.  Exon/Moble pays more money in taxes to the federal government that it pays in dividends to its shareholders.  Now who are the "takers" in this scenario?  It's not the company, it's not the consumer who need the product Exon/Mobile produces.  It's the huge money-grubbing, in your pockets, leech called the FEDERAL GOVERNMENT. 

The "producers" continue to give so the "takers" can survive. 



May 25, 2012 12:12 PM #12
Rainmaker
574,927
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

Virginia, I have no problem with the oil companies making a profit...I have a problem with the right-wing description of energy production since 2008.  Which has been up, some to record levels, across the board.

May 26, 2012 12:07 AM #13
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Karl Hess

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