The fracking fueled boom in the US is fueling concerns among Saudi royalty for the future. Meanwhile, a US lawmaker is worried that new regulations to crack down on fracking could have a negatively cascading impact on the US economy. All that and more is below.
Sky News–Saudi Prince: Fracking Is Threat To Kingdom (h/t Drudge Report)
Billionaire Prince Alwaleed bin Talal said the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues.
His warning comes as rising shale energy supplies in the United States cut global demand for Saudi oil.
The shale oil threat means Saudi Arabia will not be able to raise its production capacity to 15 million barrels of oil per day (mbpd), Prince Alwaleed argued.
Interior’s draft rules envision deferring to state regulations unless they’re weaker than the planned federal rules or don’t exist. But Rep. Bill Flores (R-Texas) predicted on Platts Energy Week TV that federal rules would grow from there, noting “that’s’ the way a lot of federal regulations start.”
“What concerns me about the DOI’s proposal is that it is the nose under the tent, if they can get in and say OK, we are only going to regulate where there states have no regulations or we feel like the regulations are not strong enough, then eventually you get a national standard over an area that they really don’t have the expertise to deal with and more importantly they don’t have the federal statutory authority to do it, and again, the states do a great job,” he said in the interview broadcast Sunday.
Read more: http://thehill.com/blogs/e2-wire/e2-wire/313945-gop-lawmaker-interior-fracking-rule-is-nose-under-the-tent#ixzz2aT3KdXGZ
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Oil drillers in North Dakota’s Bakken shale fields are allowing nearly a third of the natural gas they drill to burn off into the air, with a value of more than $100 million per month, according to a study to be released on Monday.
The amount lost to flaring pales in comparison to the $2.21 billion in crude oil production for May in North Dakota.
Still, energy companies are working to build more pipelines and processing facilities to connect many of the state’s 9,000 wells — a number expected to hit 50,000 by 2030. But it is a process that takes time and is not always feasible.
“Coal will gradually decline in importance, and of course when natural gas prices get low enough you have a big switch over,” Buffett said July 22, according to a recording posted online by WFYI, a public radio station in Indianapolis.
Berkshire also owns the rail line Burlington Northern Santa Fe Corp., which ships coal from the Powder River Basin in Wyoming.
“If there was no coal moving we would not find a lot of use for some of the tracks we have,” Buffett said at Berkshire’s annual meeting in May. Should natural gas prices increase, coal use will probably go back up, he said
PERC.org: What’s wrong with the global oil market?
If more federal lands were opened to exploration, there is no doubt Americans could soon lose the need to import oil.
First, the oil market is far from the free market of economics textbooks. OPEC, which came to prominence in the 1970s, is what MIT professor and oil expert Morris Adelman termed a “clumsy cartel.” When it is effective, it has an impact. OPEC works to restrict supply. Saudi Arabia’s announcement in January 2013 that it had cut production five percent in December 2012 led oil prices for February delivery to climb 72 cents per barrel. Monopolies drive up prices and lower productivity and misallocate resources. One study estimated the cost of OPEC to the U.S. economy was as much as $500 billion in 2008.
While it has long been fashionable to bash “big oil,” the largest private-sector international oil companies had access to just 15 percent of world reserves in 2010. They are primarily developers of reserves owned by governments. Not surprisingly, given the risky nature of the business and the instability of many resource-rich governments, returns are generally lower than in lines of business not dominated by governments. The real players in oil markets are governments, not profit-driven businesses.
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