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The Oil Boom Continues

Guess which country is the world’s largest oil producer. No, it’s not Saudi Arabia or Russia. It’s the United States, which passed Saudi Arabia in November of 2012, according to data from the federal Energy Information Administration and reported in Investors Business Daily.

In 2012 American domestic output rose by an astonishing 800,000 barrels a day. That’s more than total oil production in such middling oil producers as Argentina, and the greatest single-year increase in the United States since Edwin Drake drilled the first well in 1859.

That has consequences far beyond the oil patches of Texas, Alaska, and North Dakota. In 2006, the United States imported 60 percent of its oil. In 2013, that might well fall to 30 percent. That would mean roughly a $600 million turnaround in the balance of payments per day.

This revolution has been accomplished on private and state lands, thanks to new technologies such as fracking and horizontal drilling. This has not only opened new fields, such as the Bakken shield in North Dakota, but revived old fields such as the great Permian basin in West Texas and New Mexico. West Texas production had been declining for years after peaking about 1970. Now it is growing again.

The Obama administration has been doing its level best to see that this renaissance in American oil production is throttled in its crib. Vast areas of offshore are off limits, as are many areas of federal land. (The federal government owns about 28 percent of all the land in the country, roughly 635 million acres.) And the Obama administration has been slow-walking drilling permits. In North Dakota it takes about 10 days to get a permit for drilling on state land. The wait for federal permits averages 307 days. As a result, oil production on federal land has actually been declining in recent years while increasing everywhere else. Not only does that retard our increasing independence from foreign oil, it costs the federal government serious money, as the government is paid handsome royalties on minerals extracted on federal land.

There’s probably not much to be done about that as long as the deeply anti-capitalist so-called “environmental movement,” is in charge of energy policy in Washington. But the country is very lucky the federal government only directly controls 28 percent of the country’s territory.


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