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A word er lie from the The National Petroleum Council

America can be 100% energy independent just ask just ask the National Petroleum Council

North America could become energy self-sufficient, and possibly even an exporter of natural gas.

http://www.rigzone.com/news/article.asp?hpf=1&a_id=111687&hmp=1

Just ask Newt.

AN AMERICAN ENERGY PLAN

“Contrary to popular belief, America has more energy than any nation on earth. All that’s keeping us from becoming energy independent is a lack of political will to do so.” – Newt Gingrich

http://www.newt.org/solutions/american-energy-plan

 

All that’s keeping us from becoming energy independent is a lack of political will to do so.” .

Just don’t ask the National Petroleum Council or Newt what making America 100%energy independent  would cost you the consumer  or how much it costs to create a Tar Sands  Oil or Natural Gas from fracking job.

The Right is forgetting is that just because we have oil and gas does not mean it makes economic sense to get that oil and gas.

Lets list all the reasons why!

1)   Below $90 a barrel, non-OPEC oil would stay in the ground because it could not be produced economically–despite the fact that global subsidies for oil companies are over half a trillion dollars (2).

https://plus.google.com/u/0/108077530448434441501/posts/DFbsaMN8PXb#108077530448434441501/posts/DFbsaMN8PXb

Oil industry officials say that the tax breaks, which average about $4 billion a year according to various government reports, are a bargain for taxpayers. By helping producers weather market fluctuations and invest in technology, tax incentives are supporting an industry that the officials say provides 9.2 million jobs.

http://www.nytimes.com/2010/07/04/business/04bptax.html

 

When the Right talks about oil jobs lets remember that it takes $4 billion dollars a year to pay for jobs for 9.2 million jobs. Then lets imagine  a 100% Energy Independent America  business model that relies on Canadian Tar Sands that only makes a profit at $90 a barrel.

Lets remember that

«“As with GDP and U3, there also is a historical relationship between oil price and GDP. According to the US Energy Information Administration, a ten-dollar change in crude oil price causes GDP to rise or fall by about 0.2 percent within a year and about 0.5 percent during the subsequent year. ”

http://www.americanthinker.com/2011/06/2012_is_not_about_unemployment_its_about_oil.html

So for oil sands to be profitable oil must stay higher than $90 a barrel. even if GDP for the rest of the economy falls. Lets remember that every economic downturn in America after WW2 was linked in whole or in part to a rise in oil prices. So then for America to be independent of oil the current recession must continue.

Now on to the economics of fracking for Natural Gas.

the current price for natural gas, about 4 dollars per thousand cubic feet (mcf), is below the level needed to make shale gas profitable for most drilling – costs estimates range from a bit over 4 dollars to an average of 7 dollars and even 11 dollars per mcf

 

The main problem seems to be that the drilling companies and trucking companies do a sloppy job and let gas escape into the atmosphere – and into drinking water.  This was best exemplified in the movie GasLand, which showed that people near drilling sites could light their tap water on fire.

http://www.newdeal20.org/2011/07/05/a-fracking-mess-natural-gas-is-not-the-fuel-of-the-future-50485/

The Barnett shale, which has the longest production history, provides the most reliable case study for predicting future shale gas potential. The data suggest that if the wells’ production continues to decline in the current manner, many will become financially unviable within 10 to 15 years.

A review of more than 9,000 wells, using data from 2003 to 2009, shows that — based on widely used industry assumptions about the market price of gas and the cost of drilling and operating a well — less than 10 percent of the wells had recouped their estimated costs by the time they were seven years old.

http://www.nytimes.com/2011/06/26/us/26gas.html?_r=1&pagewanted=all

My bold so well life is 10 to 15 years after that it costs more money to pump up gas than you can sell the gas for. Next less than 10% of the wells had recouped the cost of drilling the wells in 7 years.

Lets assume your well is part of the lucky less than 90% and is paid off in 7 years if you invest $100 in a well and its paid off in 7 years $100/7 = 14.28 and keeps pumping gas for 10 years you get $42.85 profit  in ten years. take the $42.85 profit you made in ten years divide by 10 ( for the ten years ) and you have an investment that pays 4.28% a year.

If you are real lucky your well is paid for in 7 years a less than 10% chance of that happening and your well keeps pumping gas for 15 years the math is like this $ 14.28 profit for every $100 a year past the 7 year payback period times the 8 remaining years of a max 15 year natural gas lifespan.

$14.28* 8=$ 114.24 return in 15 years divide $114.24 by 15 and you get $7.61 profit a year on your investment.

That is assuming you don’t get sued for causing earthquakes.

 

On 5 November an earthquake measuring 5.6 rattled Oklahoma and was felt as far away as Illinois.

Until two years ago Oklahoma typically had about 50 earthquakes a year, but in 2010, 1,047 quakes shook the state.

In Lincoln County, where most of this past weekend’s seismic incidents were centered, there are 181 injection wells, according to Matt Skinner, an official from the Oklahoma Corporation Commission, the agency which oversees oil and gas production in the state.

Cause and effect?

The practice of injecting water into deep rock formations causes earthquakes, both the U.S. Army and the U.S. Geological Survey have concluded.

http://oilprice.com/Energy/Natural-Gas/U.S.-Government-Confirms-Link-Between-Earthquakes-and-Hydraulic-Fracturing.html

My bold

Lets assume you don’t get sued for poisoning the ground water either my question is at a measly $7.61 profit a year on every $100 of  investment is fracking worth the risk of lawsuits?

 

 


 

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ThingsComeUndone

ThingsComeUndone

A jack of all trades master of none a pot felon who can't get a job worthy of his talents so I write for free.