A Mysterious Force Unkown To Most Politicians Accounts For The Success Of The Bakken

I've alluded to this numerous times since I began blogging about the Bakken. Barron's does it best in this op-ed today:

It's not always true that the government must subsidize something to get more of it for the people.

That is the default setting among politicians, as we can see from our national surpluses of grain, milk, unemployment, nonprofit companies, disabilities, and mortgage debt.

There is another way.

Consider the sudden expansion of natural gas and oil produced by hydraulic fracturing and horizontal drilling.

Because of a mysterious force unknown to most politicians, the U.S. now produces a third more natural gas and a third more oil than it did six years ago. U.S. production of oil and associated liquids in 2012 was 11.1 million barrels a day, almost what it was in 1985. By 2015 or 2016, it should surpass the old record production level set in 1970.
The mysterious force is liberty. It is the right to own and control private property and the right to enter enforceable contracts.

The technologies of fracking and horizontal drilling were developed and applied by oily entrepreneurs who wanted to get filthy rich and were willing to risk small fortunes in hopes of making large ones.

More importantly, the resources were accessible because they lay under private land and they belonged to the landowners. In other countries, the government owns all sub-surface property rights.

Even the U.S. would never have developed fracking and horizontal drilling so fast and so effectively if all of the promising territory had been under federal or state government control or under leases already held by big oil companies.

Risk-averse bureaucrats would have found reasons for delay, as they have in northern Alaska, California, and the Florida side of the Gulf of Mexico. Big energy companies would have exploited their opportunities slowly and carefully, with due regard for keeping market prices high.

Speaking of risk-averse bureaucrats and politicians, check out the way North Dakota invests oil money finding its way into the state's "Legacy Fund."

On December 22, 2013, I spelled out a bit more clearly what I mean by "the Bakken." At that time I wrote:

Regular readers know that when I mention the "Bakken," I am thinking of the Bakken in three different ways.

• the oil patch in North Dakota
• a laboratory for horizontal drilling and fracking in tight oil
• an entrepreneurial spirit in which all concerned work together to solve problems

I am reminded of those three "Bakkens," the "trilogy," perhaps, when I think of EOG.

The third definition -- an entrepreneurial spirit in which all concerned work together to solve problems -- is exactly what the Barron's article is all about.

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I don't know how many caught this. This is a big story.

When the Obama administration was foundering/floundering in the waning days of 2013 due to ObamaCare, the president brought in John Podesta to "save" the White House. Immediately John Podesta was put in charge of "climate change." To what extent he was brought in just for "climate change" is unknown. No doubt, just having him at the table would help Obama-Biden address issues troubling their base.

I had great concern that Obama had brought in one man, and particularly John Podesta, to focus on climate change. Two big issues were on the table: CBR  and fracking. Pedesta would have been a formidable challenge for the Bakken.

Fortunately, events have forced the Obama administration to move Podesta over to a bigger crisis: the NSA story. Again, it is unknown to outsiders how much time Podesta will spend on the NSA instead of the other issues. But it's difficult for "advisers" to wear multiple hats in the White House. Hopefully, the NSA will keep Podesta fully occupied.

Breitbart is reporting the Podesta move.