A Little Truth About Energy

I can't take it anymore. The political ads, the energy industry commercials, Rick Santelli's constant ranting on CNBC, and even our own David Lee Smith is pounding this notion of a war on energy in the U.S., perpetuating the idea that our energy picture is getting worse.

The problem with these rants is that the facts don't support them. Santelli says we could create 3 million jobs (a number I'll put into perspective later), David Lee Smith says the feds are "intent on fouling fracking," and political ads would make you think it's impossible to drill for anything in this country. But the facts don't support these positions, and our energy picture is actually looking very bright. Here are a few highlights from the past few years in energy.

U.S. energy production is up significantly under Obama
Listening to political ads, you may get the impression that our current administration has done a lot to hurt energy production in the United States. I keep a close eye on production numbers and import levels, and the numbers I see coming out of the Energy Information Administration tell a completely different story. In fact, there's been a boom in oil production over the past three years.

Source: Energy Information Administration.

The myth continues that environmental rules are making it harder to get a drilling permit and it's keeping oil drillers from producing more oil. I'm having a hard time seeing that trend in the past three years based on the number of oil drilling rigs in operation shown below. In fact, we're operating almost twice as many oil rigs as we were in 1987, the last peak and as far back as EIA data go.

Source: Energy Information Administration

If there's some sort of war on energy, you would think that production would be down (which I've shown it's not) and imports would be up. But over the past five years our net crude oil imports have fallen dramatically. In 2005, we imported 60.3% of the petroleum products we used. In the past four months that number is down to 42.4% of our usage. Don't believe me? Check out the raw data here (link opens PDF file).

Source: Energy Information Administration

Maybe the rules are more stringent than they were from 2000 to 2008, maybe the industry is going to complain about having to tell us what (horrible) chemicals they're putting into the ground to break underground rock to extract oil and natural gas. But to say that the Obama administration has a war on energy or is somehow against U.S. energy just isn't supported by the facts.

We don't need more natural gas and coal production
The coal and natural gas industries would like you to believe that the government is somehow holding them back from unleashing even more energy in the U.S. -- rubbish!

The reason coal production is down is a decrease in demand from electricity generators. The reason electricity generators are demanding less coal is because natural gas is so cheap. The reason natural gas is so cheap is because we have more supply than we need.

Since natural gas isn't an energy source that's easy to export, like oil, it's more of a finite resource. If we don't use it here, it won't get used. As fracking production took off in the past five years, the industry produced more natural gas than we needed, causing prices to fall, losses to pile up, and recently had to cut back production.

Until an export facility from Cheniere Energy (AMEX: LNG  ) comes on line in a few years, we won't have anywhere for excess natural gas to go. Clean Energy Fuels (Nasdaq: CLNE  ) and Westport Innovations (Nasdaq: WPRT  ) are trying to develop engines and infrastructure for natural gas fuel usage, but we're still years away from this being a meaningful demand source for the country.

The last thing we need is more natural gas production. Unless of course you think traders are at fault for keeping prices down.

Millions of fossil fuel jobs from thin air
It must be nice being able to flippantly throw around job numbers the way Rick Santelli does. On Friday, he said we could create 3 million jobs if the Obama administration stopped overregulating the energy industry. What exactly does 3 million jobs in energy mean? I'll put that number into perspective with three numbers of my own.

  • 30.3 -- ExxonMobil (NYSE: XOM  ) ended 2011 with 99,100 employees, including company-operated retail sites, so 3 million jobs would be equal to 30.3 ExxonMobils. The employees the company does have produced 1,629,000 barrels of oil per day in 2011, 8.8% of the U.S.' current consumption, so at that rate 3 million jobs would produce 49.4 million barrels per day, more than half of the world's needs. Oh, by the way, that doesn't include the natural gas and other products the company's employees produced.
  • 656 -- Continental Resources, one of the largest companies in the Bakken shale, where much of the U.S. oil production growth has come from, has a whopping 656 employees, hardly a dent in the 3 million jobs we apparently could create.
  • 4.6 employees per mile -- If you think building a pipeline or two would help, Kinder Morgan (NYSE: KMI  ) , which owned 37,000 miles of pipeline at the end of 2011, had 8,120 employees to end the year.

Maybe we could create more jobs in energy. Maybe regulations are too harsh and too burdensome. But to throw around numbers like 3 million new jobs in energy needs some perspective. Maybe we could create 30 more ExxonMobils under a new administration, but my bet is that we won't.

Our energy picture looks strong
In light of everything that's happening globally, the progress we've made in expanding drilling and reducing our reliance on foreign oil in the past seven years is pretty remarkable. Momentum continues to be on our side as well, and with new fuel efficiency standards hitting automakers, we may continue to reduce usage just as we're increasing oil production.

As for natural gas and coal, we have more than we need as the prices for the two tell you. That's the wonderful thing about free markets: If you want to know if we need more of something, you can just look at the price. If it's hitting record lows, you know there's probably too much in the first place, just like there is right now in natural gas and coal.

Oil is down, but that doesn't mean there aren't opportunities to make money in energy. We've highlighted one stock that may be the only energy stock you'll even need. Find out what it is in our free report found here.

Fool contributor Travis Hoium manages an account that owns shares of Kinder Morgan. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of Westport Innovations. Motley Fool newsletter services have recommended buying shares of Westport Innovations and Clean Energy Fuels. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (62) | Recommend This Article (90)

Comments from our Foolish Readers

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  • Report this Comment On June 05, 2012, at 5:00 PM, Quaker08 wrote:

    "Since natural gas isn't an energy source that's easy to export, like oil, it's more of a finite resource."

    Interested fact: it is illegal to export crude oil in the US.

  • Report this Comment On June 05, 2012, at 5:03 PM, Darwood11 wrote:

    "U.S. energy production is up significantly under Obama"

    Perhaps, or perhaps it is more accurate to say that "U.S. energy production is up significantly during Obama."

    The fact is, this is a very resilient economy with some very bright people. Despite what we hear or read, most of the bright ones don't work in government, and many don't work in the financial industry. Nor are they talking heads on MSNBC or wherever. Those sectors get top billing, and the government pols spend a lot of time pumping their own image, as do the talking heads.

    Everything indicates that the fossil fuel producers are doing an extraordinary job. Some of the current initiatives will continue to pan out, but may not meet the stratospheric heights that the pundits, columnists, talking heads and pols suggest.

    But this is an election year, and it's traditional for incumbents to take credit for all the successes, while downplaying their massive failures, e.g. "unemployment, what unemployment?" and "Deficits, what deficits?"

    Meanwhile, the power distribution and transmission system in this country is an early 20th century hodge-podge and cannot transport the electrical energy of hydro units in the Pacific Northwest on a peak year. If we retire some of those decrepit coal fired units, such as the ones in Chicago (scheduled for 2012), they will be replaced by newly installed wind generators supplanted by NUCLEAR power.

    BTW, the former Mayor Daley of Chicago was enthusiastic about buying those dinosaur electrical generating facilities, but that's typical for the political class.

  • Report this Comment On June 05, 2012, at 5:06 PM, IzzyWaz wrote:

    How much of the oil production is due to new technology allowing for us to retrieve the oil?

    How many of the new oil wells in production are due to fracking?

    The article makes a point to say Obama's policies are responsible for increased production which I do not believe is the case. Technology has created the boom not Obama.

    Obama does not favor oil and gas and if he did then he would support the Natural Gas act.

    I really like this website and am a buyer of services. I am surprised that the company would let such a biased article be placed on the website.

    Maybe you should do an article on what production and operational drilling rigs could be for both natural gas and oil if regulations in DC were more favorable.

  • Report this Comment On June 05, 2012, at 10:30 PM, TMFFlushDraw wrote:

    @Quaker08

    Conceptually it is easier to export. We're a long way from even needing to export oil.

    @IzzyWaz

    I'm not crediting Obama's policies with anything. I'm just pointing out that the reality over the last four years has been very different from what many would like us to believe.

    I'd love to do an article on what production could be if regulations were more favorable but how do you quantify that? Offshore drilling for instance wants more favorable regulation after changes in the last few years (remember that huge oil spill) but the reality is there aren't enough deepwater rigs to do more drilling. Shallow water is basically tapped and deep water rigs are in high demand around the world so there wouldn't be much of a change.

    There's a similar phenomenon onshore and the chart above shows a shift or rigs from natural gas to oil drilling.

    I'm just saying it would be really hard to quantify the impact of regulations with a number.

    Travis Hoium

  • Report this Comment On June 05, 2012, at 10:31 PM, oldcheme wrote:

    Ratios of employee counts to oil production and number of pipelines operated are faulty when attempting to estimate the new jobs required to drill for new oil and build new pipelines.

    for example, compare how many people it takes operate a large oil refinery (400 employees) ; yet to build such a refinery would cost 8 billion and employ over 10,000. You can't fool me with your motley B.S.

  • Report this Comment On June 06, 2012, at 9:12 AM, TMFFlushDraw wrote:

    @oldcheme

    So your point is that we could create a ton of short-term jobs but very few long-term jobs in energy?

    This is the same debate about jobs and Keystone XL. The pipeline would create ~2,500-4,650 jobs for two years (per TransCanada) and a couple hundred long-term.

    Travis Hoium

  • Report this Comment On June 06, 2012, at 10:48 AM, gatorjaw wrote:

    You are not exactly correct in your assumption

    of the amount of jobs created. indirectly that number

    is easily 10 to 20 times the numbers of employees

    Exxon employs. The energy sector is the second largest employer behind the Federal Government.

  • Report this Comment On June 06, 2012, at 10:50 AM, TopAustrianFool wrote:

    "I'm not crediting Obama's policies with anything. I'm just pointing out that the reality over the last four years has been very different from what many would like us to believe. "

    But you certainly are avoiding to declare the truth is that the increase in energy production is despite current administration apointed regulators.

  • Report this Comment On June 06, 2012, at 10:55 AM, TopAustrianFool wrote:

    Yeah, in order to hold on to power, the socialists try to control the energy sector through regulations. Because of this output is miserable, but in an election year they deny that these regulatory policies are hampering development, growth and sutainable jobs.

    I don't deny that the Oil and Utility monopolies are complicit but give me a break!

  • Report this Comment On June 06, 2012, at 11:09 AM, tucsoncyclist wrote:

    Good article. To bad there are so many that will continue to believe the misconceptions and distortions. 3,000,000 jobs? Really? The same number of jobs will be created by a little drilling as Wal-Mart employs worldwide? I shouldn’t be surprised, too many people believe what they hear and facts are never a concern.

  • Report this Comment On June 06, 2012, at 11:32 AM, TMFFlushDraw wrote:

    @gatorjaw

    Where does your "easily 10 to 20 times" number come from?

    @TopAustrianFool

    I understand the thesis that regulation hampers production and therefor jobs. But I haven't seen any numbers to quantify the impact and based on my industry experience more "pain in the butt" doesn't necessarily translate to less production.

    I was simply pointing out that production is up significantly in the last four years and imports are down based on quantifiable facts. Could it have been better? Maybe, but I don't have quantifiable facts to make that statement.

    Travis Hoium

  • Report this Comment On June 06, 2012, at 11:51 AM, atkinskd wrote:

    Energy companies are 'making hay while the sun shines' knowing that the policies posed would kill their opportunity. In mention to the offshore rigs, a huge threat there is the sea act that's been tabled since at least Clinton of which Obama is a huge proponent that would provide unddeerdeveloped nations with the equipment and access to get their own offshores up and running on our tab.

    I think the fracking issue would be put to rest if a before core sample of the region had to be taken. My understanding is that it's not the chemical in the frac fluid but the minerals in the ground they're drilling that the frac fluid liberates that's the problem at least to the greater degree since they keep frac fluid info as IP.

    3M jobs might happen if they completely deregulated, most of which would be roughnecks, that would last exactly as long as the demand did - which if the industry was deregulated wouldn't be long. I'd like to see a real candidate step forward. None of these chuckleheaads could find their own backsides with both hands, a flashlight, a guide dog and a map! Maybe a restriction/ban on trading during term of office would flush out some real leadership. All I see is engineering policy to compliment portfolio holdings.

  • Report this Comment On June 06, 2012, at 12:08 PM, mstone6131 wrote:

    While arguing about job growth and socio political factors are important - these are not what anyone should focus on.

    Take Advantage Oil & Gas (ticker: AAV) and take the theme of this article. This stock, in my opinion, is the most undervalued oil stock out there. Oil will always be needed, energy needs grow greater everyday, and oil is a commodity that is a long term play. Eventually, the middle east will lose its number one spot and which region is going to be there to take it - canada. why? great energy production, policies, and the drive to be number 1. you think someone is going to attack canada? you think their political structure deters them from growing? Im no michael burry, greg lippman, or kyle bass, but i do know an amazing investment when i see one. id put 50% of my portfolio in AAV and the rest in either apple or gold.

    focus on the long term value plays and not the hypothetical job creation and political arguements.

  • Report this Comment On June 06, 2012, at 12:53 PM, GLCBJC wrote:

    While I accept what is being said, it must also be understood that not one drop of oil has been produced from new wells on Federal land. All current advancements have been on private ground. That's the argument conservatives are making against Obama concerning oil production. That production has increased that much on private land is a real testament to our market system.

  • Report this Comment On June 06, 2012, at 1:09 PM, TMFFlushDraw wrote:

    @GLCBJC

    In 2009 there were 2,072 new leases on federal land, 2010 - 1,308, 2011 - 2,188.

    This is lower than most years under Bush so I agree with your point, but to say that there hasn't been a single drop of oil from new wells of Federal land is inaccurate.

    Travis Hoium

  • Report this Comment On June 06, 2012, at 1:20 PM, DufferWD wrote:

    Wow. Prices are low today, so why invest in Energy?! So much for the Foolish long term view.

    "U.S. energy production is up significantly under Obama" ... has our President (or anybody in Washington) helped energy production in a meaningful way? No. It is our economic system, our infrastructure, and our engineering expertise that is making our energy production go up.

    Only 42.4% of our oil usage is from imports? OK! Job done! Let's tackle free univeral health care ... or something really tough, like getting the Astros into the World Series.

    "We don't need more natural gas and coal production" Gee, I just can't think of a way we could use all this cheap energy. Just a suspicion, I suspect that the most innovative country in the world has some people in it who have some ideas on how to use cheap local energy.Now perhaps those folks are only in CNLE and WPRT. Then again, the plastics industry has some ideas on how to use gas instead of oil.I bet there are a few more folks that can figure this one out.

    "We don't need more natural gas and coal production" "The reason natural gas is so cheap is because we have more supply than we need." More supply than we need forever? Or more supply than we need at 2:00pm this afternoon? A long term energy policy that supports the development of clean cheap energy is fundamental to this country's continuing economic success.

    Are we getting effective energy policy from Washington D.C. now?

  • Report this Comment On June 06, 2012, at 1:48 PM, thewalkingdead wrote:

    I think you meant KMI has 1 employee every 4.6 miles. Not 4.6 employees per mile.

  • Report this Comment On June 06, 2012, at 2:07 PM, pearson1662 wrote:

    Perhaps a more important point to remember when considering the facts presented in the commentary is that as energy prices are relatively low, so too are the current prices for the industries' companies. With 40 to 45% of our oil being imported, any disruption in those imports (for whichever one of the myriad of potential and historically inevitable reasons) will cause values to increase precipitously. Now may be the very best time to buy XOM, SDRL and CHK. Buy low, sell high.

  • Report this Comment On June 06, 2012, at 2:11 PM, TMFFlushDraw wrote:

    @thewalkingdead

    Yep. You're right.

    Travis Hoium

  • Report this Comment On June 06, 2012, at 2:13 PM, Gregory63 wrote:

    LOL @ #CrazyComments.

    To make money, first... take a deep breath and purge yourself of all bileous political prejudices.

    Then ... let the facts you run across stand or fall on their own merrits, and finally... ask yourself how you can arbitrage this in the long term :)

  • Report this Comment On June 06, 2012, at 2:33 PM, whereaminow wrote:

    My guy's interventions are better than your guy's interventions!

    (And whatever you do, don't read that guy over there who says the market clears and no intervention is best.)

    Stupid supply and demand...

    David in Liberty

  • Report this Comment On June 06, 2012, at 3:33 PM, lousyinvester wrote:

    The author does not show that all of that oil and natural gas production has been on existing drilling leases and locations. The federal government has severly limited the areas that can be used for production. The jobs can be seen when you look at the entire ecomony. i.e the folks making the pipe, trucks for transport, mid stream, equipment etc. I feel that this article is not Motley Fool quality. This article doesn't even address the construction jobs/projects on hold because of in-descission by the administration on clean air regs and impacts to fossil fuel power generation due to stalled permitting.

    my two cents

  • Report this Comment On June 06, 2012, at 6:00 PM, Dennis129 wrote:

    The Obama administration has had a devastating impact on conventional energy production withion North America, The fact the production is up is traced to Bush administration actions and the long lead time required to move throiugh permiiting land development. Just because one thing follows another, it doesn't follow that one thing causes another.

    Rather than unleash America's abilility to increase world availabilityt of oil and natural gas, OBama has stuck his foot in the pie and attempted to turn US energy policy over to the ECO nazi, folks who simply want others to use of the stuff.

    By increasing the size of integrated world markets asnd removing infrasture barriers to free utilization we can reduce prices of enegry significantly. By moving foward with a clear lonf them policy of national self interest, we can continue to resduce the geopolitic risk premium in the world energy market.

    At that point, we can assist the market in coping with future shortfalls through market driven pricving, not through bull headed bully populism. As I see it, the re-emergence of production world-wide, and reduced tension surrounding the Middle East will dtop oil prices to aropund $50.00 per barrel. On the way down, OPEC will try to reduce supply and maintain pricing. In a way isn't this what the ECO Nazis want. - to keep oil in the ground and off the market.

  • Report this Comment On June 06, 2012, at 7:46 PM, fremmons wrote:

    It is always interesting to hear what half informed analysts write about the oil and gas industry. I am reminded of the newly minted PhD spouting off new insignts with no validity on a subject to people who have lived the business and survived and prospered despite the smarter people in the room. This article is full of half insights and unsupportable comments. Do you suppose farmers would put more effort into beans if the price doubled the year before? The Carter administration told us we were running out of natural gas in this country so we had to conserve our use. It did not occure to them that more exploratory wells would be drilled if the price went up. With regard to fracture stimulation, I suggest you read Oil and Gas trade publications for the technical crowd fo get some insight into what is really going on. Petroleum exploration service business is fiercly competative and research intensive. So some lawyers want all the chemicals disclosed so they have running room to file frivolous law suits. One of the major ingredients in fracturing is the same thickner used in ice cream, guar, a starch from beans. Sue ben & Jerry while you are at it.

    An old field hand suggests you talk to someone in the business if you want to know about the business. Good luck with that.

    boll weevil

  • Report this Comment On June 06, 2012, at 8:59 PM, pillarsoflight wrote:

    Thanks, Travis, for displaying the facts. Though many would argue with you, they do so in a knee-jerk fashion and without evidence. Let's hope they're more objective with their investments.

  • Report this Comment On June 07, 2012, at 8:12 AM, raee wrote:

    Travis - how about the other side of the coin - energy usage. These numbers play a part in what you are persenting as well. I have a hunch that energy usage is down lately and plays a role in the reduction of imports. According to data from the U.S. Energy Information Administration total energy consumption for the U.S. dropped 2.02% from 2007 to 2008 and dropped again from 2008 to 2009 by 4.77%. They say they don't have all the data yet for 2010 (COME ON! It's been a year and an half).

  • Report this Comment On June 07, 2012, at 8:49 AM, ziq wrote:

    It doesn't surprise me that the "war on energy" is largely a product of the Republican spin machine. And every time I hear any politician talk about creating jobs my BS meter goes crazy.

    The fact remains our energy trajectory is not sustainable over the long term, it is mired in politics and propaganda, and energy--traditional or alternative--is not a segment I want to park any serious investments in. The less dependent my investments are on the whims of the US Congress the happier I am.

  • Report this Comment On June 07, 2012, at 9:12 AM, diverdon56 wrote:

    What a bunch of political dreck! An Obama puff piece, full of distortions and half truths. Is the fool about investing or is it becoming a political forum?

  • Report this Comment On June 07, 2012, at 10:28 AM, midnighteye wrote:

    Couldn't agree more diverdon56, a very slanted and unrealistic piece of propaganda.

  • Report this Comment On June 07, 2012, at 10:45 AM, SpendLikeGreece wrote:

    So it is true. President Obama does not care at all about the environment. He has not done one thing to slow down the drilling that is destroying our land and water, in fact, if what the writer says is true he has allowed it to increase. Obama is definately more concerned about his re-election than he is about mother earth. Perhaps Romney will care more, it's obvious that the current administration hates the earth.

  • Report this Comment On June 07, 2012, at 10:48 AM, SpendLikeGreece wrote:

    The Obama administration does not want Natural gas. It's far too clean and efficient to run our cars on Natural gas when we can fill the sky's with smog from oil. If you love pollution, President Obama is your man because the oil companies have him in their back pocket!

  • Report this Comment On June 07, 2012, at 10:51 AM, essejsemaj wrote:

    diverdon56, midnighteye

    Did we even read the same article? The author very clearly and most definitely does not write in support of Obama. The author is saying that opinions informed by overly-emotional, political bias are not supported by fact. The author isn't saying that Obama is good and conservatives are bad. He's saying the facts don't support the claims. His underlying point is that investors shouldn't let their emotional political bias inform their opinions about macroeconomics.

  • Report this Comment On June 07, 2012, at 11:42 AM, TMFFlushDraw wrote:

    @essejsemaj

    I couldn't have said it better myself.

    Travis Hoium

  • Report this Comment On June 07, 2012, at 1:21 PM, 123spot wrote:

    TopAustrian;Look how deregulating the financial industry helped us all out. Maybe that will give you some preliminary numbers. Say, how many jobs were lost and what kind of economic and environmental costs did Macondo produce?

    Not related; excellent article Mr. Hoium. Thank you.

    Spot

  • Report this Comment On June 07, 2012, at 1:40 PM, tcsonic wrote:

    I'm not sure why you decided to make this a political article, but you did and you are misleading your readers. It takes about 3 years from permitting to actual drilling to get a well online. There is no way the increases in production on your chart can be attributed to the current administration.

  • Report this Comment On June 07, 2012, at 2:08 PM, Darwood11 wrote:

    @fremmins;

    I agree re: the politicians and others who don't pay attention to the specific details of the energy sectors.

    If the readers want to see politicians in action then I suggest they watch the beginning of the "documentary" Ethos by Director Pete McGrain. It's available via Netflix streaming.

    Don't pay attention to the "talking head" but do watch long enough to see the politicians do their dance. It includes the Clinton, Bush and Obama Presidents and their administrations. It also tosses in some of the "candidates" for good measure.

  • Report this Comment On June 07, 2012, at 2:42 PM, verylargelarry wrote:

    tcsonic, et al,

    Read the article. Keep your political bias from blinding yourself.

    The article attacks, only, the misinformation involving oil and gas production and importation of energy.

    It does not suggest the changes in same are BECAUSE of the Obama administration, but only that the changes have occurred DURING the Obama administration.

    One could assume, as a corollary, that not all societal, economic, or cultural change is directly attributable to the President, or his/her administration. For instance, supply and demand may still have an effect.

  • Report this Comment On June 07, 2012, at 3:18 PM, Usurped wrote:

    The author is a political shill...utterly contemptible in his juvie attempt to attribute increasing production to an Administration openly hostile like all EcoSocialists to fossil fuels. G-a-r-b-a-g-e opinion piece. Increase in drilling on Private Lands, using private wealth and private ingenuity to increase production despite Papa Doc Barack and the Stazi Bureaucracy.

  • Report this Comment On June 07, 2012, at 7:48 PM, ynotc wrote:

    I agree with Darwood11, production now is not necessarily a result of the Obama administration as the process of getting permitted and capitalized to drill a well includes a long timeline between initiation and production.

    The fact that production is up does not prove that Obama is pro energy. The real determinant would be how many new wells were greenlighted during his administration vs. other administrations.

    The fact that supply is up could also be partially explained by the reduction in consumption due to the worldwide slow down of economies.

  • Report this Comment On June 08, 2012, at 8:43 AM, KurtEng wrote:

    Very good article and it's nice to see actual facts and real analysis to back up your claims. It's sad to see that many people get so worked up when they see the word "Obama" and it isn't followed by a string of criticism.

    Natural gas represents a big opportunity in American energy and I hope to see more vehicles running on natural gas. The current oversupply of natural gas shows that natural gas producers are not over regulated in my eyes.

  • Report this Comment On June 08, 2012, at 1:13 PM, lydiablp wrote:

    Why don't we hear more about the OTHER fracking technique developed by Gasfrac and which does not use water ? Also liquified natural gas could be exported ?

  • Report this Comment On June 08, 2012, at 1:19 PM, boxcar3 wrote:

    Current Gulf of Mexico Deepwater Oil and Gas Production is the result of planning, exploration/development drilling, and offshore production,drilling/quarters facilities fabrication, etc. around 5 to 8 years before first oil.

    For the most part the current rise in oil production was a pre-Obama ecomomic decision by the oil companies.

    Bakken shale production is around 400K BOPD, with some projections as reaching as 700K BOPD. Where/WHAT is presidential policy concerning ramping up infastruction to handle this prolific amount of oil (not to mention other oil shale basins, Eagle Ford, etc..

  • Report this Comment On June 08, 2012, at 1:22 PM, bluemoon51 wrote:

    The current administration was fortunate that fracking unleashed virtually unlimited natural gas supplies to replace the jobs and energy lost by the regulatory war on coal. No one is commenting on the "green energy" push to replace fossil fuels that is still priority one with the Obama administration.

    Poor article misusing statistics. We cannot prove where we would be in energy production without Obama but likewise we can't determine that there is no "war on energy" by the Obama administration using the number of drilling rigs as an indicator. Drilling on private mineral interests in different States does not require Federal approval. The author needed to check how many of those drilling rigs were on Federal leases versus private before drawing his conclusions.

    This was a political article and had little to do with investing. If I see another one like it I will no longer be a Fool.

  • Report this Comment On June 08, 2012, at 3:19 PM, RUSHmusic wrote:

    The problem with this is that the government, regardless of who is holding the reins, is too slow and uninformed with the latest technological advances in the harnessing and producing of usable and reliable energy. There exists high - efficient, coal powered generators that are much cleaner and powerful than the ones built some twenty, thirty and more years ago. Also, we have an abundance of natural gas that is very clean and resourseful. It is the fault of the largesse of government and the inefficiency of the bureacracy in Washington and in the local and state govenments which which can not recognize the innovations of the free markets and free enterprise creating efficient tools for the abundant energy sources of which our country is already blessed.

  • Report this Comment On June 08, 2012, at 4:36 PM, 092326 wrote:

    Is it not true that the increase in energy production is due to North Dakota and Montana which is private and not under government supervision and the development of fracking rather than any policies implemented by the current Administration?

  • Report this Comment On June 08, 2012, at 5:06 PM, Titliest100 wrote:

    What an idiot. Case in point. Hoium seems to think that the employees of Exxon are all it takes for them to run their business. Same flawed logic for any other oil company. No matter what size they are. Dude... to drill and complete just 1 well it might take several hundred people (contractors) working during that time. And even after a well goes on production it still takes many people to operate it. Day in and day out. There were many other examples of Hoium's flawed thinking in the article. I don't think the dude has even a general understanding of what it takes to run a business. Of any kind!!

  • Report this Comment On June 08, 2012, at 7:05 PM, MalcoweeDaddy wrote:

    I found this article enlightening. Thanks. I wonder, would not the Keystone pipeline further our dependence on foreign oil???

  • Report this Comment On June 08, 2012, at 10:06 PM, donvesco100 wrote:

    From the Eagle Ford: travis, sell it to the ows crowd.

  • Report this Comment On June 08, 2012, at 10:11 PM, donvesco100 wrote:

    And, how many wells have you brought in, travis?

    How many pickups have you sold in south Texas, travis?

    And how many motels have you built or run in once dead little towns, travis?

    Yep, the petroleum production just doesn't create that many jobs, does it, travis?

    A LITTLE truth is exactly right, very little, travis.

  • Report this Comment On June 08, 2012, at 11:11 PM, Melaschasm wrote:

    sctravis got it exactly right above. Current oil production has nothing to do with the number of new permits issued during the past three years.

    The idea that current increases in oil production is proof that recent changes in the permitting process has not had an impact on future oil production is a logical fallacy.

    The attacks against Santelli also have a logical flaw. Santelli is correct that some people including Obama are trying to restrict domestic fossil fuel production. Obama has repeatedly announced that he is supporting laws which will restrict domestic fossil fuel production.

    If there was an honest debate about energy, we would be talking about the costs/benefits of various environmental rules so that we could have an informed discussion about which rules we want, and which are to costly for the benefit provided.

  • Report this Comment On June 08, 2012, at 11:14 PM, tikiterry wrote:

    Why should it take years to be able to export natural gas?Maybe instead of spending billions on green energy we should use that money to speed up our ability to pay china back by exporting our excess of cheap natural gas!!!

  • Report this Comment On June 10, 2012, at 9:53 AM, zgriner wrote:

    "A Little Truth About Energy" is a myopic article with an incomplete set of facts and cherry-picked statistics over a specific time frame.

    The first couple of graphs only show information during Obama's administration. Why not show us other administrations for a proper comparison?

    While drilling may be up, the author doesn't tell us how long it takes to bring an oil field into production after oil is found. He makes the inference that increased drilling instantly brings oil to the market. Why didn't he show us the number of productive wells?

    Is it possible that oil production is up because of new technologies that increase the output of productive wells, as well as extending their lives? Were mothballed wells also brought into production because of these new technologies?

    "The reason electricity generators are demanding less coal is because natural gas is so cheap." This is fairy-tale thinking. Obama is implementing restrictions on coal-fired plants that make them uneconomic to run, so they are being shut down, which reduces demand. You can't just switch a plant from one energy source to another.

    Those millions of jobs? The author presents misleading information. The jobs come from increased construction, including infrastructure, not from continuing operations. Plus, there is the multiplier effect that all those new jobs bring. I don't know if there would be millions in the end, but the author does not address the tens of thousands of jobs created by the oil drilling boom on private lands in North Dakota, as a result of fracking technology. This has been widely reported on.

    Remember, there lies, damn lies, and statistics.

  • Report this Comment On June 10, 2012, at 2:32 PM, 3percenthero wrote:

    please keep your political views to yourself. I pay for this service in order to get unbiased opinions.

  • Report this Comment On June 10, 2012, at 10:09 PM, devoish wrote:

    Those were a lot of pretty personal and unjustified attacks at you there, Travis. Not much in the way of evidence against your arguments though.

    http://blogs.alternet.org/oleoleolson/2010/08/05/massive-cen...

    Best wishes,

    Steven

  • Report this Comment On June 11, 2012, at 10:37 AM, JGDTexas wrote:

    One subtitle is,"U.S. energy production is up significantly under Obama". It should say IN SPITE OF. The implication of "under" is because of. Here are facts:

    - Obama shut down ALL action in the Gulf un-necessarily and for too long;He also failed to act to contain the damage basically allowing a crisis that they're so fond of

    .- production on land controlled by the Gov't is DOWN 17%

    - The EPA and environmentalists are trying everything they can to shut down production on private land where the increased production comes from;

    - Obama refu sed to let the XL pipeline go after years of studies, acknowledgment that there were no environmental issues by State dept, proposal to move the pipeline to avoid the manufactured issues;

    when Cap & Trade was shot down by Congress, Obama is having pieces of it implemenetd thru regulation which does an end-run around Congress. In interveiews Obama said, "Under my plan of Cap and Trade, the cost of electricity will necessarily sky rocket". And, somethign to the effect that you can build a new coal plant but the regulations will bankrupt you.

    Either there's a 'war on fossil fuel energy' by this administration or they're dumb as stumps about the implications of what they're doing. I think they know exactly what they're doing....as they dump billions down the rat hole that is solar manufacturing.

  • Report this Comment On June 11, 2012, at 4:23 PM, HaMb0 wrote:

    Travis,

    Thanks for the article, and I appreciate the way you've laid out your graphs and most facts. My main criticism is where you let some subjectivity shine through. The most blatant example is:

    "Maybe the rules are more stringent than they were from 2000 to 2008, maybe the industry is going to complain about having to tell us what (horrible) chemicals they're putting into the ground to break underground rock to extract oil and natural gas. "

    At first you indicate that we don't know what they use, but then you claim the chemicals must be horrible? This taints the reader, subjecting them to reading more in one mind set (fracking fluids are bad), when you haven't given any information to back this up.

    Sorry for ranting a bit; this is one thing that really bugs me about any news/investing article I read. Thanks for reading (I hope).

  • Report this Comment On June 11, 2012, at 7:56 PM, swiver wrote:

    Interesting breakfast talk at API mtg in Denver today covered some of these issues, and tended to support MF's views. From what I have seen, the White house wants a balanced energy policy, in which other forms of energy can grow, and is not opposed to O & G. But the history of O&G's disasters is easy to call out, and some bright lights needed to be shone on Makondo - it takes time to fix these things.

    The fracking issue (& we've been fracking for many years) needs clarification, in that it occurs in horizontal wells that are thousands of ft deep in cased wells, so the chemicals used should never disperse into ground water.

  • Report this Comment On June 12, 2012, at 8:58 PM, FoolSolo wrote:

    Travis, great article. Thanks for the informative, factual information. I enjoyed reading it.

    Unfortunately, we can't seem to have a discussion on energy, health care, or education in this country without derailing into partisan politics.

  • Report this Comment On June 17, 2012, at 5:46 PM, Shaw211 wrote:

    "In fact, we're operating almost twice as many oil rigs as we were in 1987, the last peak and as far back as EIA data go."

    This is woefully incorrect and 1987 was a terrible year for drilling. The rig count had hit a 50-year low of ~550 the previous year. In 1981, the U.S. operated over 4,500 rigs and in the mid-1950's averaged 3,500 rigs operating. By your chart, we just got above 1,000 oil rigs last summer.

    You obviously need a better source for your information than the EIA. The gold standard for rig counts is Baker Hughes which has issued rotary rig counts since 1944. Here, try this web address:

    http://investor.shareholder.com/bhi/rig_counts/rigCountArchi...

    By the way, Exxon-Mobil does little domestic drilling although they have partial interests in many wells. Quoting the number of employees they have and comparing it to domestic oil production has no merit. There are other problems with your article but I'll stop here.

  • Report this Comment On June 21, 2012, at 3:27 AM, thidmark wrote:

    Hey folks, stayed tune for the next report: How the Rooster Makes the Sun Come Up

  • Report this Comment On July 09, 2012, at 9:55 PM, buyn2hold wrote:

    "The reason coal production is down is a decrease in demand from electricity generators. The reason electricity generators are demanding less coal is because natural gas is so cheap."

    This is more or less a half-truth. One reason electricity generators are demanding less coal is that dual-fuel plants can switch to the cheaper fuel. Another very important reason is that the EPA under Clean Air Act New Source Review has been bringing enforcement actions against coal-fired plants since 1999 (source: EPA website). Of course this spans several administrations, but the urgency of enforcement has varied with each one.

    You did highlight some interesting facts and statistics in the article, but pointing the credit towards the Obama adminstration's policies (if that was your intention) is no more fair than the opposing argument that blames these policies for the industry's woes. There are also world-wide market forces at work that have a significant impact.

  • Report this Comment On September 09, 2012, at 1:00 PM, DonCuillo wrote:

    Okay, we see what's going on here. We have a seminar Democrat apologist.

    Fact: Oil leases down by 40% under Obama. Explain that Fool!

    Fact: Oil production frozen in the Gulf of Mexico by Obama.

    Explain that Fool!

    Fact: The Coal industry is currently being decimated by Obama.

    Explain that Fool!

    Fact: The only oil boom going on in America today is on private land, but Obama's EPA is doing its best to retard each and every one of those leases.

    Explain that Fool!

    Fact: No new refineries under Obama thanks to Obama's steroidal EPA.

    Fact: Obama sending billions to support drilling all over the world - except here.

    Fact: Obama has wasted billions of dollars on Green Projects his own people new would fail, and many of those projects are - OVERSEAS!!!

    EXPLAIN THAT FOOL!!!! Aptly named site.

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