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July 22, 2006

Running Out of US Oil: Not Bush’s Fault

Category: Editorial – Tom Harrison – 10:16 am

Today’s New York Times ran an article that started

Federal revenues from oil and gas produced on publicly owned land barely increased in recent years, despite soaring energy prices, mainly because production declined far more than the government’s published statistics have indicated, according to a new Congressional report.

This information was a result of an investigation; some thought the Bush administration was not enforcing the levies, or somehow letting oil companies have a benefit. Ah, the conspiracy theories are disproved, and the Bush administration is vindicated. There was no smoking gun, because there was less and less oil to be had; the article continuous, reporting

…oil and gas companies with leases on federal lands and waters paid only slightly more in royalties in 2005 than in 2001.

During that period, prices for natural gas rose 30 percent and prices for oil rose 90 percent.

Specifically, revenues from the fees (based on price/volume) rose 8% in that period. Anyone want to do the math here? OK, I will. 90% – 8% = 82% reduction in volume of oil, and 30% – 8% = 22% reduction in gas. Well, OK this math is fuzzy, but at some level, we’re talking about a pretty radical reduction in output in only a few years. And finally, the article reports

Nearly a third of the oil and gas produced in the United States is from federal territory.

I wonder if the wells on privately owned land are doing better or worse than the ones the feds collect fees on?

This is just one statistic, but perhaps shows how pointless it is for us to keep attempting to extract oil and gas out of increasingly more difficult and less productive locations. Like the Alaska National Wildlife Refuge (ANWR).

4 Comments

  1. Hi Tom,
    Followed a link from that SEO post to your site out of boredom, and can I just say that this is at least the 3rd time I’ve weirdly discovered a fellow newton resident on the net from reading blog posts… heh. Also, as a frequent doom-monger from Peak Oil etcetera, great blog here.

    Comment by Sam Jackson — July 22, 2006 @ 9:51 pm

  2. Doom-monger? What, me worry?

    Comment by Tom Harrison — July 23, 2006 @ 4:41 pm

  3. Hi Tom, I also found your site from the comments over on Matt’s post. Good to hear from you! I’ve been following energy and natural resources for a while, you might find some interesting stuff in my del.icio.us links, although I don’t get around to write about most of it.

    Comment by Ho John Lee — July 23, 2006 @ 11:12 pm

  4. Ho John —

    Good to hear from you, too!

    More interesting still, Sam Jackson, who commented is alo an Exie who came from Matt Cutts’ blog. Hmm, people interested in web spam/Google and energy that went to Exeter. I see a pattern developing :-)

    I’ll check out your del.icio.us links. Hope you and family are well and not suffering too badly from the “no global warming here” heat wave in CA.

    Tom

    Comment by Tom Harrison — July 29, 2006 @ 11:01 am

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