What Are Your First Thoughts When You Read This Story?

Updates

June 21, 2011: I posted the original note below on June 15, 2011. It's now been about a week and time to post the first thoughts I had when I read the linked story. 

First: my world view is that there is a small, but very vocal and very influential group of folks that will do anything to destroy "Big Oil," the domestic oil industry, or whatever you want to call it. They use whatever means they can, including scams like "global warming." They use existing bureaucratic agencies and regulations to stop "Big Oil" wherever they can. They co-opt legitimate entities to assist in their efforts. Examples abound.

Now, my first thoughts when I read the story below. I think the small but very vocal and very influential group of folks intent on destroying "Big Oil" were caught flat-footed when it came to horizontal drilling and fracking oil- and gas-containing shale. Even "Big Oil" was surprised how fast this process took off and how successful it has become. Right now, the success has resulted in huge supplies of natural gas and it's very possible we may see something like that in oil.

Those who hate "Big Oil" have been very successful in stopping/delaying off-shore exploration. They are now playing "catch-up" with hydraulic fracking and will do what they can to stop that process. It's very possible they will be successful.

But, states across the nation, including financially-strapped states are starting to appreciate the oil and gas royalties coming in from oil and gas produced through hydraulic fracture stimulation.

So, that was my first thought: everyone was caught off-guard with regard to hydraulic fracking. Now everyone is playing catch-up. Including those who want to stop "Big Oil."

June 22, 2011: And yet another story that suggests everyone was surprised how fast this puzzle was solved: hydraulic fracking, natural gas, and unconventional oil. 

Natural-gas producers are pumping fuel at a record pace as advances in drilling techniques help offset a decline in rigs, signaling no respite for the world's worst-performing commodity in the past year.

Gas has tumbled 39 percent since the end of 2007 as companies increased output by about 11 percent to a monthly record in March. Improvements in drilling amid rising demand for the cleaner-burning fuel have outweighed a 45 percent drop in the number of rigs since reaching an all-time high in 2008.

Companies from Range Resources Corp. to Chesapeake Energy Corp. are using capital from joint-venture partners to simplify the process of extracting gas contained in shale. Natural gas is the only raw material that hasn't gained in the past 12 months, losing 12 percent, according to the Standard & Poor's GSCI Index. Oil has jumped 24 percent in the same period.

Original Post

This is an interesting story -- read it.

Then, take a moment to reflect on the first thing that comes to your mind.

I will tell you the first thought I had while reading the article -- tomorrow, unless I forget.

First two paragraphs of the story:

The U.S. shale oil and gas drilling boom boosted U.S. oil and gas reserve growth to a five-year high in 2010, while upstream spending more than doubled from 2009 to 2010 largely due to producers' acquisitions of shale properties, according to Ernst & Young's fourth annual U.S. E&P Benchmark Study.

The survey of the 50 largest oil and gas companies by end-of-year reserves found that end-of-year oil reserves grew 11 percent from 16.1 billion barrels in 2009 to 17.8 billion barrels in 2010, and natural gas reserve grew 12 percent from 156.2 Tcf in 2009 to 174.3 Tcf in 2010, the strongest combined annual growth posted from 2006 to 2010.