Justin Williams, Author at NOIA

Drilled, Baby, Drilled

February 6, 2018 by Justin Williams

Wall Street Journal | Editorial Board | February 1, 2018

Readers of pre-millennial vintage may recall the 2008 presidential campaign when Republicans and especially Sarah Palin picked up the chant “drill, baby, drill” as a response to soaring oil prices. The theme was much derided, not least by Barack Obama, who as late as 2012 called it “a slogan, a gimmick, and a bumper sticker” but “not a strategy.” Ten years later, who was right?

The U.S. Energy Information Administration (EIA) reported Thursday that U.S. crude oil production exceeded 10 million barrels a day for the first time since 1970. That’s double the five million barrels produced in 2008, thanks to the boom in, well, drilling, baby.

The EIA summary puts it this way: “U.S. crude oil production has increased significantly over the past 10 years, driven mainly by production from tighter rock formations including shale and other fine-grained rock using horizontal drilling and hydraulic fracturing to improve efficiency.” This is the “fracking” boom our readers know well that has been driven by innovation in the private oil and gas industry.

The magnitude of the boom is remarkable. The gusher has pushed the U.S. close to overtaking Saudi Arabia and Russia as the world’s leading oil producer. In 2006 the U.S. imported 12.9 million barrels a day of crude and petroleum products. By last October that was down to 2.5 million a day. Some gimmick.

This translates into greater energy security as the U.S. is less dependent on foreign oil sources. Donald Trump calls it “energy dominance,” which implies that the U.S. wants to husband its supplies like gold at Fort Knox. The reality is we want to produce and sell what the market will bear, including exports to willing buyers around the world.

Thanks to Congress’s deal with Mr. Obama in 2015 when Republicans extended wind and solar subsidies in return for lifting the oil export ban, the U.S. exported some 1.5 million barrels of oil a day in November. Some readers may recall that Heritage Action instructed Congress to vote no, and Breitbart called the bill “a total and complete sell-out of the American people.” Perhaps even they can now see that trading temporary subsidies for a permanent change in export law was shrewd and good for the country.

Also striking is how quickly the oil and gas industry has recovered from the oil price plunge of 2015-2016. Previous price declines led to multiple bankruptcies and bank failures. This time drillers adapted quickly, took the rig count down fast, and cut costs. America’s flexible private capital markets helped the companies ride out the price trough, and now producers, investors and lenders are reaping the benefits of the oil price rebound to $69 a barrel.

And don’t forget the fracking boom in natural gas. EIA says U.S. gas production increased by some 50% from January 2010 to November 2017, reducing carbon emissions and heating prices. Thanks to new export terminals, the U.S. is now selling liquefied natural gas around the world. This has the potential to compete with Russian gas so Western Europe doesn’t have to succumb to Vladimir Putin’s periodic energy blackmail. Unleashing U.S. energy is Donald Trump’s best Russia containment strategy.

Read the full editorial here.

Oil Boom Gives the U.S. a New Edge in Energy and Diplomacy

February 6, 2018 by Justin Williams

New York Times | Clifford Krauss | January 28, 2018

HOUSTON — A substantial rise in oil prices in recent months has led to a resurgence in American oil production, enabling the country to challenge the dominance of Saudi Arabia and dampen price pressures at the pump.

The success has come in the face of efforts by Saudi Arabia and its oil allies to undercut the shale drilling spree in the United States. Those strategies backfired and ultimately ended up benefiting the oil industry.

Overcoming three years of slumping prices proved the resiliency of the shale boom. Energy companies and their financial backers were able to weather market turmoil — and the maneuvers of the global oil cartel — by adjusting exploration and extraction techniques.

After a painful shakeout in the industry that included scores of bankruptcies and a significant loss of jobs, a steadier shale-drilling industry is arising, anchored by better-financed companies.

With the price of West Texas intermediate crude above $65 a barrel, a level not seen in almost three years, the United States is becoming a dominant producer. It is able to outflank competitors in supplying growing global markets, particularly China and India, while slashing imports from the Middle East and North Africa.

This year, the United States is expected to surpass Saudi Arabia and to rival Russia as the world’s leader, with record output of over 10 million barrels a day, according to the International Energy Agency.

“This is a 180-degree turn for the United States and the impacts are being felt around the world,” said Daniel Yergin, the economic historian and author of “The Prize: The Epic Quest for Oil, Money and Power.” “This not only contributes to U.S. energy security but also contributes to world energy security by bringing new supplies to the world.”

At the same time, the United States is becoming a major exporter of natural gas, another outgrowth of the shale revolution, undercutting Russian energy dominance over Eastern Europe.

The improving energy picture comes as the Trump administration is attempting to increase offshore drilling and loosen other regulations on fossil fuel development. But just as the surge in oil and gas production in shale fields during the Barack Obama administration had little to do with Washington, the current rise is the result of private companies responding to global markets.

Read the full story here.

We can be optimistic about America’s energy security

February 6, 2018 by Justin Williams

RRichmond Times-Dispatch | David Banks | February 6, 2018

The outcry over potential oil and gas exploration in untapped areas of the Outer Continental Shelf — from the Atlantic to the eastern Gulf of Mexico and the Pacific and Arctic — has cast much-needed focus on America’s energy needs and uses. The future of oil and natural gas in our economy, their essential role in national security, and their contribution to the betterment of peoples around the world call for policies based on reason and reality, not vague arguments and political calculations about switching to renewable energy sources.

After the Trump administration as part of its America-First Offshore Energy Strategy announced the draft plan to permit energy exploration in federal waters, Gov. Ralph Northam, along with the governors of every other Atlantic state from New York to Florida — and those of California, Oregon, and Washington state — denounced it. The government estimates there to be 90 billion barrels of oil and 327 trillion cubic feet of gas awaiting discovery on the OCS.

There are legitimate issues — such as compatibility with operations at NASA’s Wallops Island and the Navy’s training programs — that must be considered before energy activities are launched. But offshore development is not incompatible, for example, with recreation and tourism, especially if rigs are beyond the horizon and can’t be seen from shore.

Moreover, the industry has made great strides in improving drilling technologies and, particularly, blowout preventers. Lessons learned from the 2010 Deepwater Horizon incident in the Gulf of Mexico have informed improvements in existing safety standards and the creation of many new standards for equipment and best practices on spill prevention and response capabilities. Importantly, the oil and gas industry launched the Center for Offshore Safety to help offshore operators develop and monitor safety systems.

Opponents of offshore drilling seem to close their eyes to the fact that it accounts for a substantial amount of the oil the country requires for transportation and natural gas for electricity production, home heating, and manufacturing. We use far more oil and gas today than at any time in our history, and the U.S. Energy Information Administration estimates that oil and gas will supply 60 percent of the nation’s energy needs in 2040, all the while worldwide energy demand will continue to grow. The basic attractions of oil and gas — relatively low cost and great abundance — can drive environmental lobbies to distraction.

While opposing offshore drilling, Northam touts renewable energy, saying it’s doing very well and creating good jobs in Virginia. The governor and environmental groups prefer solar and wind energy, but despite massive government subsidies, combined they meet just 7 percent of U.S. demand for electricity and only 3.2 percent of the nation’s total energy needs.

Read the full story here.

OCS Leasing Benefits America

February 6, 2018 by Justin Williams

Townhall | Paul Driessen | February 3, 2018

Under the current offshore energy program developed during the Obama years, 94% of the nation’s Outer Continental Shelf (OCS) is off limits to leasing and drilling. Under the Draft Proposed Program (DPP) announced January 4 by Secretary of the Interior Ryan Zinke, over 90% of OCS acreage and 98% of “undiscovered, technically recoverable oil and gas resources” in these federal offshore areas (beyond the 3-mile limit of state waters) will be considered for possible future leasing, exploration and development.

The Trump-Zinke plan proposes the largest number of lease sales in US history: 19 off Alaska, 7 in the Pacific, 9 in the Atlantic, and 12 in the Gulf of Mexico (where the vast majority of leasing, drilling and production have taken place over the past 65 years). Government experts estimate that these areas could hold 90 billion barrels of oil and 327 trillion cubic feet of natural gas, worth over $6.5 trillion.

Shortly after the DPP was presented, Florida Governor Rick Scott contacted the secretary, discussed the plan and issued a statement saying the Eastern Gulf was no longer under consideration. Other governors insisted that areas off their coasts also be eliminated from consideration. Energy companies and others said the Florida decision was premature, and the normal planning process should be followed.

Actually, there has been no decision on Gov. Scott’s request, and the process is being followed. The Department of the Interior (DOI) and its Bureau of Ocean Energy Management (BOEM) are still in the midst of their 60-day comment period on the DPP. That will lead to a Proposed Program, Draft Programmatic Environmental Impact Statement and another public comment period. A Proposed Final Program, another EIS, more public input, and eventually a new Five-Year Leasing Plan will follow.

Meanwhile, Sec. Zinke will be speaking with coastal state governors and legislators, to hear their concerns, explain the process, and discuss how drilling can be conducted with increasing safety.

Somewhere during this long process, new seismic surveys should be conducted, to identify and interpret subsurface structures that could contain oil and/or natural gas. The last Atlantic region surveys were 30 years ago, and other areas were never surveyed. Oil companies need high quality data to determine whether an area has enough potential to warrant bidding on a lease. The BOEM needs the best possible data to make informed decisions on which areas should be kept in or dropped out of the planning process – and later on whether bids reflect an area’s potential value or should be rejected.

Read the full story here.

Offshore Energy Can Help Power American Greatness

January 30, 2018 by Justin Williams

For Immediate Release: Tuesday, January 30, 2018
Contact: Justin Williams, (202) 465-8464, jwilliams@nullnoia.org

Offshore Energy Can Help Power American Greatness

Washington, D.C. – National Ocean Industries Association (NOIA) President Randall Luthi issued the following statement after President Trump delivered his first State of the Union address:

“Tonight, President Trump delivered his view of where America is and where we are heading. Significant regulatory reforms, including reforms in the energy sector, and the recently signed tax bill are allowing more U.S. companies to compete globally. A booming stock market, low unemployment rate and new bonuses for many Americans all portend a stronger economic future. NOIA appreciates President Trump’s recognition that there is more growth and security we can achieve through American energy dominance.

“American energy dominance can only be accomplished through an all-of-the-above energy strategy. A path towards this goal flows through the administration’s unprecedented 2019-2024 National Offshore Oil and Gas Leasing Draft Proposed Program. The Draft Proposed Program could allow for access to valuable untapped offshore resources that belong to every American. If fully realized, the plan could create hundreds of thousands of new jobs, generate billions in new federal, state and local revenue and deliver affordable and reliable energy produced here in the U.S. under the toughest safety and environmental standards in the world.

“NOIA stands ready to work with President Trump, his administration and Congress in helping fuel the American economy. Together, and with policies in place that maximize American’s access to federal offshore areas, we can strengthen our economy, keep energy affordable for hardworking American families and consumers and cement our position as the global energy leader.”

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ABOUT NOIA

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf. NOIA’s mission is to secure reliable access and a fair regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources in an environmentally responsible manner. The NOIA membership comprises about 250 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance, and renewable energy.