Saturday, March 10, 2012

WSJ: Advice to California -- Take a Fact-Finding Trip to The Bakken

Link here to the WSJ. Generally a subscription is required, but this seems to work without a subscription. A big "thank you" to Dave for alerting me to the article.

The byline is Williston, North Dakota, suggesting the staff reporter filed the story from the Bakken.
Williston, N.D.
 
In his speech last week responding to high gas prices, President Barack Obama insisted that "we can't just drill our way out of" our energy woes. Actually, we can—and if the president wants proof, he should travel to boomtown USA: Williston, North Dakota.

Williston sits atop the Bakken Shale, which will later this year be producing more oil than any other site in the country, surpassing even Alaska's Prudhoe Bay, the longtime leader in domestic output. This once-sleepy town is what the Gold Rush might have looked like had it happened in the time of McDonald's, Wal-Mart and Home Depot.

And the oil rush is making Dakotans rich in a hurry, with farmers and other landowners becoming overnight millionaires from lucrative royalties and leases. One retired farmer tells me that, thanks to oil rigs churning on his property, he suddenly has a net worth north of $30 million.
But the article is about much more than individual Dakotans. It's important for all Americans, in general, and Californians, specifically:
Now contrast this bonanza with what's going on in another energy-rich state: California. While North Dakota's oil production has tripled since 2007 (to more than 150 million barrels in 2011), the Golden State's oil production has fallen by a third in the past 20 years, to 201 million barrels last year from 320 million in 1990. The problem isn't that California is running out of oil: In 2008, when the USGS estimated four million [sic: should be "billion" -- see 1st comment] barrels of recoverable oil from the Bakken, it estimated closer to 15 million [sic: should be "billion"] barrels in California's vast Monterey Shale.

Rather, California's problem is politicians—at the behest of their green-energy allies—deciding to wall off the state from developing evil fossil fuels. With its prohibitive environmental regulations, state cap-and-trade law, costly renewable energy mandates and 40 years of prohibitions on almost all offshore drilling, California ranks worst in the country and 91st in the world in its hostility to drilling, according to the Fraser Institute's 2011 Global Petroleum Survey. This month, according to North Dakota's Department of Mineral Resources, California is no longer America's third-largest energy-producing state—leapfrogged by North Dakota.
Great article.

12 comments:

  1. An alert reader noted that the "four million barrels of recoverable oil from the Bakken" should be "billion barrels."

    Great pick-up.

    The reader also noted that George Bush the First halted oil drilling off California's shore. I don't know the history. But if that's accurate, that's been a few years ago, and don't recall paying $4.00/gallon for gasoline then.

    By the way, I have posted a nice article pointing out that neither party has a monopoly on lousy energy policies.

    I'm probably as guilty as anyone, but I am getting tired of placing blame on past administrations.

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  2. Excellent article. It was emailed to me so I got around the subscription. Steve Moore must be in Williston. I know he has said he planed to visit North Dakota and report on its incredible economic miracle.

    He interviewed Harold Hamm when Ham was in Washington and had a few moments to speak to our great leader. He came away from that meeting shaking his head saying the President just doesn't get it unable to understand we could become energy independent with some positive government policy that encourages conventional energy development.

    I say the Prez knows what to do but that would offend his political base. He think he is the important one not the country.

    I think Moore was very impressed with Hamm. He encouraged Moore to visit North Dakota and and see for himself. Harold Hamm, a self made American success story that did it without any favors from big nanny state government. The real spirit of America.

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  3. You would think the state with the largest budget shortfall would want some revenue from a potential 15 billion barrels in recoverable oil. Plenty of sun for their solar panels I guess.

    Lets hope the USGS new study out in 2013 beats Harold Hamm's estimate of 24 billion barrels in ND.

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    1. My hunch is that if gasoline remains above $4.00/gallon nationwide and above $4.75 in California for more than six months we will start to see calls for increased drilling "everywhere." If the price of gasoline goes higher, it will be more than a "start to see" -- it will be an overwhelming demand something be done immediately. It will be interesting to watch.

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  4. FYI all,
    If you link to wsj articles from google, wsj allows access without subscription. Google and wsj support this access.

    Go to google.com and type the article title (don't need all, just most words) into the search box. From search results list provided by the google search, link to the journal article that has the .wsj extension . It will usually be first or second link.

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    Replies
    1. Thank you. I did not know "why" but doing what you said always seemed to work for me. Thank you.

      By the way, I have subscribed to the WSJ on and off over the years. I would subscribe, not for the investment advice/articles per se, but for the excellent writing. Yes, I subscribed to WSJ for the articles. Smile.

      I just got an offer from WSJ for about $10/month. I may have to re-subscribe. I quit subscribing this past year because I was on the road so much, but now with the electronic version, no longer a problem.

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  5. Perhaps the reason Steve Moore's article is so accessible is because it is an opinion piece that appears on the editorial page. They usually disseminate those to a larger audience but their news and financial articles are restricted to paid subscribers. In any event a great article by Steve Moore, a true disciple of economic liberty.

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  6. Cool, thanks for the tip.

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  7. Bruce,

    http://goo.gl/ymp0L not sure if the link will work from an article that has a great slide show of life in ND taken recently.

    Mike

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    1. Mike,

      Thank you. I linked that article/photos earlier:

      http://milliondollarway.blogspot.com/2012/03/all-time-best-bakken-post-for-day-carpe.html

      But your note reminded me that I need to tag those postings with "Photos" or "Video" so folks can find them more easily.

      Thank you.

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  8. Mr. Moore was in Fargo on the 28th of February as guest speaker of the FM Chamber event. Later in the day he was in western ND to meet with Bakken officials. I know the meeting was scheduled to be in Watford City, but weather was bad and the meeting was moved to Williston. So he was in western ND at the end of Feb.

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    Replies
    1. Wow, I wish I had been there. I would have offered him a tour.

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