News: Crude Oil, Natural Gas, and All Derivative Commodity Markets To Remain High!
There never has been more people learning about the energy markets as there are today. We for so long have relied on foreign energy sources to feed our growing economy, that we have only recently been forced to heed the calling of visionaries, of just a few decades ago. The message was and is...."We as a nation have to get away from foreign oil", but why haven't we as a nation done anything about heading off this train wreck? We all have seen it coming...."like a deer in the headlights", we remained still, and now look where we are!
Myth: "The oil & gas industry is characterized as "Big Oil". Think about this.... Small producers typically employing no more than 10 F.T. employees drill 85% of the nation's wells and produce 65% of the natural gas and nearly 40% of the oil consumed by America! America holds only 5% of the worlds population, yet consumes 25% of the worlds oil supply! Energy has fueled America to the great country she has become in such a short time in history. America will always need her energy, and will have to compete with booming countries like China, & India for it. This is one reason we need to support Domestic oil/gas production as much as we can.
There hasn't been any new refineries built here in the U.S. since the 70's, and domestic production offshore and especially on land, has been declining steadily for over 30 years because of low market prices. Today, (some say too little too late) we as an industry are scrambling to get all the oil to market as we can, both onshore and off. It is agreed by most of us in the industry as well as the financial markets, there is plenty of oil available and will be so for many years into the future, but the oil can be deeper and tougher to extract. Another problem has been poor refining capacity! It will take about 10 years to get a refinery built and the first barrel of oil refined! No one wants a refinery built "in their back yard", same as the nuclear power plant proposed sites. How about the fact the same refineries here in the states make mostly gasoline in the warm months shut down, re-tool for heating oil and produce more heating oil during the colder months, making less gasoline, thus the prices really don't go down much in the winter months for gasoline as one would expect.
Refining problems, long-term low domestic production, geopolitical influences, Global economic booms,and the FACT we are many years away from an alternative fuel source.....are the reasons things stand the way they do regarding energy supply, demand, markets, and consumer pricing.
Some say Ethanol is going to save the day. It has been recently established that if we never ate a bite of corn or grain and took every grain grown of corn, soybeans, sugarcane, etc. and made Ethanol, it would only add up to 12% of the daily USA requirement of gasoline! Clearly grain based gasoline will not be the answer to our gasoline needs.
What we need to do is conserve to help lower prices in the short term, and push hard for alternative, renewable fuel sources to help with the long term energy needs of America which only keeps growing. In the meantime we do need to push for all the domestic energy we can bring to market, thus lowering our need for foreign oil sources. Foreign oil can very well be a time-bomb for America if we don't wake up and smell the fuse burning! Think about it!
The D.O.E. (Department of Energy) says America holds about 200 Billion barrels of oil in mature known fields, and we are in the heart of a fantastic oil play here in Southern Kentucky! Our unique geology allows for profitable shallow oil/gas recovery, opposed to deeper, riskier, and costlier deep wells. Most Kentucky oil wells are 2,000 feet or less opposed to 5,000 feet or more in many locations around the country. The well known Kentucky oil is believed to be originating from 7,000 -10,000 feet below the surface, and driven through the fractures (which act as conduits) by high pressure natural gas, the oil travels upward toward the surface. Our geology is very cave and fissure ridden,(Karst) which allows for the vertical migration of oil under the pressure of natural gas. We have in our office, a newspaper clipping of a well that made 20,000 barrels of oil in only 36 hours, WITHOUT A PUMP! Freeflowing oil is not uncommon in Kentucky, but ALL wells eventually will lose enough drive pressure and have to be put on a pump.
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