Even with natural gas prices near ten-year lows, the Eagle Ford shale shows no sign of slowing oil production.
It produced 27.1 million barrels for the first four months of this year, Texas Railroad Commission figures show, while Eagle Ford oil production for all of 2011 totaled 36.6 million barrels.
“So we’re already 75 per- cent of the way to equaling last year’s number,” said Thomas Tunstall, director of the Center for Community and Business Research at the Institute for Economic Development at the University of Texas at San Antonio.”
Natural gas is not the only hydrocarbon being produced at rates far exceeding North American demand. Natural gas liquids (ethane, propane, butane & iso-butane), which are industrial fuel and feed-stocks for petrochemical plants, are also seeing multi-year price lows.
Total production of ethane, propane, butane and isobutane was more than 2 million barrels a day in April, the most recent total available, according to the U.S. Energy Information Administration. In 2008, before surges in production, the annual average was about 1.5 million barrels a day.
Prices for ethane have plummeted since the end of 2011 from 90 cents to 30 cents a gallon, Barrasa said. Propane has dropped from $1.55 a gallon as recently as September to 80 cents, he said.
Producers hope these lower prices will attract petrochemical and manufacturing industries to build and expand in North America.
In Ohio, major oil companies are evaluating the the state’s oil production potential given advancements in hydraulic fracturing and horizontal drilling. Estimates thus far are for 5.5 billion barrels of oil and 15.7 trillion cubic feet of natural gas.
What is the response to such an opportunity? Governor John Kasich of Columbus, Ohio, is pushing for a drilling tax hike.
The point is for out-of-state oil companies to pay more and all Ohioans pay less,” Kasich said at a news conference.
Translation: bring your investment capital hear and we’ll tax it. Nothing like a threat to make you think twice about being productive and creating jobs.
How much investment are we talking about? U.S. oil and gas project investment is currently at $163 billion dollars.
Meanwhile North Dakota’s 2.9% unemployment rate gives evidence of the state’s economic strength and ability to succeed inspite of the enormous federal burden placed on the industry.
“The prosperity of North Dakota’s oil industry and frustration over federal energy regulations highlighted a field hearing here Saturday of the U.S. House Oversight and Government Reform Committee.”
Anyone still wondering whether the federal government slows development should keep in mind that drilling permits on non-federal land can take as little as three weeks while “federal drilling permits can sometimes take six months for approval, even though “there is absolutely no” geological difference in the land companies are drilling on or beneath.”
And in a typical act of unintended consequences, barriers to pipeline construction mean that an enormous volume of oil is now transported in trucks. The results? Far heavier traffic and wear-and-tear on roadways.
The cleanest, safest, and most cost-efficient way to transport oil is to build a pipeline. However, those determined to stop pipeline transport, invariably leave shippers to pursue other options. Until, of course, the opponents of pipelines oppose those other options in pursuit of their real goal: to stop the oil industry any which way they can.