re: #3 Bob Levin

re: #2 ggt

So folks, how much do I believe the article that is posted?

Heh, belief is the easy part…

re: #5 Bob Levin

Okay, let’s say that the basic data is true, that the US is able to bring more oil to the world’s market.

That doesn’t have to be put into the future… it has already happened these past couple of years, but it is important to understand why.

The hurricanes of 2005 delayed some offshore projects (like Thunderhorse), which meant the following couple of years showed a decline in US oil production. Then, when those came online the world oil price was highly volatile, but prices persisted above, significantly, the lows experienced during the simultaneous booms of the North Sea and Alaska (during the 80’s and early 90’s.)

With higher prices smaller firms felt they could invest in horizontal drilling in places like ND, where as I mentioned before it had long been known there are sources, albeit poor sized reservoirs.

So from the valley post-2005 to the current rate the US “increased” petroleum production by very roughly 1mmb/day. But again, be careful of that valley as it was partially induced by production delays in the GoM.

I believe you rightly intuit the issue about the price - it really is case of supply and demand. If American’s are willing to pay the price they can have gasoline available on demand at the local gasoline stations, at least for several more years (assuming there is no great world tragedy on the immediate horizon.)

The EIA (and the international equivalent, the IEA) have lots of data online, but they tend to look at things like economists (which is there charter after all, as being creations of the OECD.) One characteristic of their terminology is to call “oil” anything that is a liquid that we use to burn - including alcohol made from grains, and even urea. This leads people astray who aren’t aware of the game.

The US has increased liquids production because of the boom in natural gas, and what comes out of natural gas wells is not just methane but also what is termed “natural gas liquids”, which are hydrocarbons heavier than methane (but not as complex as longer chains that dominate petroleum) that condense at atmospheric temperatures.

So, between the increase in GoM production, and the increase in drilling in ND, and the increase in ethanol production (due to mandate by Congress and supported by your tax money), and due to increase in natural gas liquids, the US has shown an increase in production of “liquids” these past few years.

However, this isn’t as impressive as it might sound, as the amount of energy available per mass from the lighter hydrocarbons (propane, butane) is not as much as from the longer chains (found in the black gooey stuff we call petroleum.) Plus alcohol production consumes hydrocarbons (farming) and thus the net energy production is very small (and might be negative.)

All of this is much more complicated than the Average American is willing to hear… it just can’t be reduced to a sound-bite.