Today's Wall Street Journal featured a front page story highlighting that US crude oil production grew by 14% last year. The finding came from an annual compilation of industry trend lines that is published by BP called the Statistical Review of World Energy, which noted that the increase was the largest in the world and the largest in US history. Rising domestic crude oil production, according to the report, was largely tied to increased use of hydraulic fracturing that has led to rapid growth in shale production in North Dakota and Texas.
The current abundance of domestic natural gas at historically inexpensive prices is presenting policymakers, regulators, and advocacy organizations with a new challenge – should this resource be exported to other high-priced markets or should it be protected and used as a strategic asset for energy-intensive industries? An overview is presented of the economic, regulatory, foreign policy, foreign trade, and political implications surrounding this growing energy policy debate.
A new proposal, HB 2615, endorsed by both industry and environmental groups has received bipartisan support in the Illinois State House which may lay the groundwork for a regulatory path forward on the often controversial issue of hydraulic fracturing. According to news reports, the filed bill - titled the "Hydraulic Fracturing Regulatory Act" - would require oil and natural gas operators to test water in all phases of drilling, require chemical disclosure of fracking solutions, address air pollution concerns, and hold companies liable for water contamination found after drilling operations.
On Tuesday, the Energy Information Administration (EIA) announced that crude oil production in the U.S. reached a 15-year high with nearly 6.5 million barrels per day in September. The boom was attributed to the use of hydraulic fracturing and horizontal drilling techniques which yielded a 16 percent increase, or an extra 900,000 barrels per day, from September 2011 levels.
The long-simmering fuel vs. food debate has reached a boiling point, as the result of drought conditions that have raised corn prices and precipitated requests for the EPA to adjust the federal Renewable Fuels Standard.