I s there anyone in America who has not heard the Republican mantra drill Baby Drill? Is there anyone who doesn't remember Sarah Palin making this mantra her political calling card? Is there anyone who doesn't believe that it is the Patriotic obligation to drill for domestic oil and gas anywhere and everywhere it can be found on American soil?
Crude oil and Natural gas (NG) are entirely fungible, that is, a barrel of crude oil or a cubic meter of gas produced in the USA is essentially the same as a barrel of oil produced in Saudi Arabia. The global oil companies purchase oil and NG on long term contracts and therefore my be able to produce domestic oil and NG at one price but be able to sell it at a higher price to a foreign buyer because the price has risen. Consequently the world trades oil and NG on a continuos basis with production at a lower cost and a sale at a higher price thus producing the billions of dollars in profits Big Oil keeps reporting.
Drill Baby Drill! The following data is from the CIA Factbook and it should be understood that the minor discrepancies exist because of the year upon which these figures are derived may not be consistent. In addition these numbers reflect 2009 values, before extensive NG production has occurred in north America.
The domestic production of NG is the USA is 593 billions of cubic meters (BCM) and our consumption is 647 BCM, we export 30.3BCM and import 106 BCM because it is a fungible commodity. If we simply stopped all exports we only have a shortfall of 24 BCM, a number that can easily be made up for with current producing wells.
We live in a global marketplace and it is not the intention of this article to suggest that we should not be buying and selling our natural resources in this global marketplace. The question that needs to be answered is what price should Americans be paying for our natural resources to be exploited and sold to a foreign country? What should concern Coloradans in particular is the information that Chesapeake Energy, self proud that they are the second largest producer of natural gas in the USA and the most active driller, is seeking to exploit the Niobrara Shale formation and to use the widely accepted but flawed fracking process to accomplish this.
However, further exacerbating this exploitation is the fact that Chesapeake has sold a 33.3 % interest in this formation to a Chinese company, CNOOC Intl ltd. For the investment made by CNOOC, Chesapeake negotiated a deal wherein the Chinese will pay for 66.6% of the cost of developing the Niobrara reserves. This fact is where this deal should become troubling to patriotic Americans. Our NG reserves are going to be developed with Chinese money and will yield a 33.% beneficial ownership for a foreign company/country.
All Coloradans, but particularly Elbert county residents should be concerned about the potential environmental impacts. The issue for locally affected Coloradans is whether we are willing to pay the price this exploitation will exact on the local environs. These impacts include air pollution from gas emissions and air contamination from flared gas; the dust and ground pollution that results when 10,000+ wells are drilled with common ground spills; the impact on our roads and the general degradation in the quality of life that accompanies resource exploitation. Perhaps our greatest concern should be for the Niobrara aquifer which supplies the domestic and agricultural water for several Colorado counties. The resource exploitation companies will require 1-3 million gallons of our precious water for every well they drill and any well rupture , or just as likely, gas seepage from fracking into our aquifer, is a very very high price to pay. Coloradan taxpayers will pay for the environmental damage caused by fracking because the energy companies have been exempted from EPA oversight and responsibility and because the State of Colorado alone authorizes both oil and gas well permits and water well permits.
Several Elbert County residents are committed to monitoring both the technology and progress being used in Elbert County. In addition, we are working diligently to strengthen the County's regulations, ensure each citizen benefits directly from revenues resulting from exploitation and to protect the rights of every citizen.
"Tony is an engineer with extensive technology and management experience. He has served as a member of local government Boards during intensive developmental phases and as a recent a resident of Elbert County he is concerned about the environmental impact of uncontrolled Oil and Gas development. "
By Tony Corrado
Editor's Note: When being sold a bill of goods, follow the money. Who is getting rich, and what will it really cost you long term?