Potentially another game changer for world-wide energy – – the Mexican legislature has changed national law to allow foreign investors to own oil reserves. This will draw the major oil companies with their talent, equipment, funding, and infrastructure. Speculation is oil production from Mexico could double in a decade.
Still some major obstacles, but the potential is huge. The Mexican government and her people could benefit tremendously. I really hope they handle this well, for their good and the good of everyone who uses energy.
Notice that the constant stories of the “energy crisis” isn’t in the news anymore. If you were around in the ‘70s you remember long lines to buy gas on your assigned even or odd day. Crisis stories continued for years, through the entire Carter administration and beyond.
What changed that? Mr. Greenberg gives partial credit to oil in Alaska’s north shore, the North Sea, and Gulf of Mexico. By the way, what peak oil?
Much credit goes to federal regulations getting out of the way.
Mr. Greenberg cites Daniel Yergin’s analysis of the ‘70s gas shortages. Short version is ‘the feds did it.’
“The iconic images of the 1970s — gas lines and angry motorists — are trotted out whenever some new disruption happens. Yet those gas lines weren’t the result of markets. They were the largely self-inflicted result of government interference in markets with price controls and supply allocation.
“The 1970s were also years of natural-gas shortages, which turned into a bitter political issue … . Many at the time attributed these shortages to geology, but they, too, were the result of regulation and price controls. What solved the shortages wasn’t more controls but their elimination, which resulted in an oversupply that became known as the ‘gas bubble.’ … The lesson is that markets and price signals can work very efficiently, and surprisingly swiftly, even in crises, if they are allowed to.”
Most of the credit goes to the combination of horizontal drilling and hydraulic fracturing. Put those together and call it ‘fracking.’
The huge increases in natural gas around the country and oil especially from Bakken, Eagle Ford, and Permian means we are swimming in energy.
The impact can be seen in our imports, or rather, the radical drop in imports:
Oil imports, which accounted for 60 percent of the country’s domestic consumption in 2005, is now down to 35 percent, or about where it was before these successive Energy Crises first struck in 1973.
Our oil imports are down by about half in 8 years. Astounding.
Most of the credit goes for the fracking revolution goes to Mr. George Mitchell, who passed away this year. Thank you sir.
Motley Fool – The Bakken Oil Boom in 10 charts –
The charts give a good view of the Bakken boom.
Guess on Bakken production for the next 35 years is amazing – production of around 1M bopd today could grow to 2M bopd in about 2023, dropping back to 1M bopd in about 2038, and slipping to only 0.4M bopd in 2050. That’s doubling in 10 years, back to current level 25 years out, and about the level of ’10 in another 37 years.