Refer a Friend to Energy and Capital.
By Keith Kohl | Tuesday, March
12th, 2013
“We're getting closer to it each month. You just watch... Soon they'll have everyone believing it'll happen,
teasing us that one day, we'll break past our old peak,” my friend told me.
I swear he says the same thing every time I pass by his place on my way through Minot, North Dakota...
I had stopped off during my drive one cold morning in a long string of cold mornings (the temperature wasn't even half
of what it was back in Baltimore).
Yet it wasn't the guy's weatherbeaten face and sour demeanor that held my attention.
It was the fact that our domestic crude production topped 7 million barrels per day in December — for the
first time nearly twenty years:
I can't tell you what impresses me more: the fact that U.S. oil production is this high, or that 42% of our entire
daily output comes from two states, Texas and North Dakota.
And there's a frightening addition to this statistic: If you include production from Federal Offshore areas, the share
of our total crude production jumps to an incredible 62%.
We're certainly headed in the right direction, but I still wouldn't hold my breath. Not just yet.
I wanted to tell my friend as much, but I knew it wouldn't do any good.
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"There's enough oil below American soil to put OPEC out of business for
good!"
They said it couldn't happen...
One day, the U.S. would produce enough oil to kick OPEC to the curb.
That day is here — and these 3 companies are making it happen.
The good news from those two states is matched by the ever-declining production from the third- and fourth-largest producing states, California and Alaska:
What was I going to tell him — that the "good news" we all keep hearing is mostly inflated hope... or that having
a bit of cautious optimism never hurt anyone?
Whatever it is, it has OPEC members shaking in their boots.
A Crisis of Confidence
Trust me when I say it takes a lot to rattle OPEC members.
Losing one of their most outspoken price
hawks with Chavez's recent passing might've been just enough to do it.
But to
hear the United States — far and away the largest oil consumer on earth —
is going to need less oil imports going forward is enough
to send OPEC members into panic mode.
The crucial part for OPEC in all of this is not importing less oil to the United States.
I don't believe they're really worried about our imports. They couldn't care less if U.S. oil and gas production
continue increasing.
In fact, we saw evidence of that in OPEC's 2012 World Oil Outlook.
Long-term declines in oil consumption in OECD countries are offset by a sharp increase in Asian demand, which reaches
90% of that of the entire OECD by 2035:
OPEC is concerned with the security of their future in Asia.
Their prize lies within developing countries like India and China, where demand is set to skyrocket over the next 20 to
30 years.
And the only thing that stands to jeopardize that market... is us.
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OPEC's Worst Fear
What OPEC fears more than anything else is U.S. drilling technology spreading like wildfire across the globe.
This would render demand much less promising in parts of the world that are not currently experiencing the kind of oil
and gas boom North America has been enjoying for the last few years.
Utilizing two well-known technologies together during
the drilling and completion phases has unlocked a wealth
of natural gas resources beneath U.S. soil. (Granted, it took almost two
decades to get it right — but our energy boom took off when George Mitchell successfully combined horizontal drilling and
hydraulic fracturing.)
And hydraulic fracturing isn't the technological breakthrough that will take our oil and gas boom global...
Even now, the United States is the only country to take advantage of
unconventional shale deposits to dramatically boost production.
China holds much more potential shale gas than we could ever dream of. In fact, our own Energy Information
Administration calculated the total amount of recoverable shale gas reserves as over 1.2 QUADRILLION cubic feet!
Think of the impact it would have on OPEC's plan to ship their oil and gas exports to Asia if China could suddenly
develop its own resources...
Now image what will happen when we perfect this lethal technological combination...
It might surprise you to learn we already have.
Within a matter months, companies have
managed to lower the exorbitant costs associated with drilling and
completing
wells in our massive shale formations. Moreover, a few companies have
succeeded in drastically cutting the number of days it takes to drill a
well.
This revolutionary technique elevates our shale boom to new heights, crushing drilling records in the process.
Soon, any company not using this technological breakthrough will be forced to adapt or go out of
business...
I've even read reports that one company drilled 36 wells on a single pad!
It's happening right now. Look for my new report on this ground-breaking technology to hit your inbox in less than two
weeks.
Until next time,Keith Kohl
A true
insider in the energy markets, Keith is one of few financial reporters
to
have visited the Alberta oil sands. His research has helped thousands
of investors capitalize from the rapidly changing face of energy. Keith
connects with hundreds of thousands of readers as the Managing Editor
of Energy & Capital as well as Investment Director of Angel
Publishing's Energy Investor.
For years, Keith has been
providing in-depth coverage of the Bakken, the Haynesville Shale, and
the Marcellus natural gas formations — all ahead of the mainstream
media.
For more on Keith, go to his editor's page.
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