Shopfloor.org has posted often on the development of the Bakken Formation’s oil in North Dakota, Montana and the Prairie Provinces because it’s such a huge economic success story. The profitable development despite the depth (2 miles) of the shale formation testifies to the importance of new technology — advanced seismic exploration, hydrofracturing and directional drilling — and reaffirms the economic impact of domestic oil development.

The Wall Street Journal today reiterates these points with a well-done piece, “Oil Industry Booms — in North Dakota.” Excerpt:

The Bakken Shale deposit has been known and even tapped on occasion for decades. But technological improvements in the past two years have taken what was once a small, marginally profitable field and turned it into one of the fastest-growing oil-producing areas in the U.S.

The Bakken Shale had helped North Dakota oil production double in the past three years, surging to 80 million barrels in 2009—tiny relative to the more than seven billion barrels consumed by the U.S. every year, but enough to vault the state past Oklahoma and Louisiana to become the country’s fourth-biggest oil producer, after Texas, Alaska and California. If current projections hold, North Dakota’s oil production could pass Alaska’s by the end of the decade.

The Journal reports that the oil now pays off when prices hit $50 a barrel, down from $80.

Thanks largely to the oil boom, North Dakota’s economy has fought off the recession. The state’s unemployment rate in December was 4.3 percent.

Labor shortages are the inevitable downside. The Williston Area Development Foundation in northwestern North Dakota has a website set up to attract potential employees, RockintheBakken.com. There’s a jobs fair in Williston Thursday for people who hold commercial drivers licenses.

It’s trouble other states would love to have. The first step to get there: Regard domestic energy development as a boon, not a bane.

The Washington Examiner today takes note of the kneejerk reaction against development of the Marcellus Shale’s natural gas resources, made possible through hydrofracturing technology. From “Another enviro scare aimed at oil, gas“:

Continuing our look at this year’s State of the State addresses, we turn to West Virginia Gov. Joe Manchin, a Democrat. In his 2010 address on Wednesday, Jan. 13, he did not mention manufacturing and the only reference to industry was a passing reference to taxation of industrial property.

But this exercise — searching only for the terms “manufacturing” and the like — is limited. Manchin, a Democrat, certainly gave manufacturers prominent play in his speech, especially in the area of energy and coal:

We have more than 1,000 megawatts of wind power in service or in development – that’s enough to power more than 250,000 homes! And we have the third-largest wind capacity of any eastern state.

The world’s first successful carbon capture and sequestration project is at AEP’s Mountaineer Power Plant in Mason County, and an advanced pilot project is capturing CO2 at the Dow Chemical plant in South Charleston.

These pilot projects will lead the way for implementation of this technology at coal-fired power plants around the world.

Plans are moving ahead on a coal-to-liquids project in Mingo County that will use state-of-the-art cleaner coal technology. Through this technology, West Virginia coal will be our primary energy source as we make the transition to the fuels of the future.

Manchin also gave a plug to developing the natural gas resources in the Marcellus Shale.

Earlier posts on states of the state.

In his speech to the State Chamber of Oklahoma on Thursday, National Association of Manufacturers’ President John Engler discussed jobs creation through energy, infrastructure and exports. On the energy front, he discussed the astonishing expansion of domestic natural gas production (and potential production), thanks to technological advances in hydrofracturing.

Following are his prepared remarks from that section:

In Oklahoma, a proud tradition of supporting energy has helped keep your unemployment 3 percentage points below the national average.

You’re one of the states benefiting from development of shale gas, in this case the Woodford Shale. In Texas, there’s the Barnett Shale; in Arkansas, the Fayetteville Shale; in Louisiana the Haynesville Shale. Since 2000, gas from shale has grown from less than 1 percent of the nation’s production to about 10 percent.

Perhaps the most promising development is the Marcellus Shale underneath Pennsylvania and New York and West Virginia. Analysts say the Marcellus alone has enough gas to meet the nation’s needs for at least 14 years.

These natural gas deposits are close to northeastern population and manufacturing centers – they could be a real boon to consumers and industry in the area. But environmental groups have stirred up opposition, for example, in New York State, where there’s a pitched battle going on over natural gas drilling.

Opponents play on people’s fears of a technology that’s actually been in use for decades –- hydrofracturing. Thanks to massive R&D by energy companies, the technology has been improved, made even safer, and combined with horizontal drilling to open these shale deposits.

Oklahoma’s unemployment rate in October was 7 percent.

NBC Nightly News on Sunday ran a segment on the thousands available jobs in Bismarck and the rest of North Dakota, attracting out-of-state residents for jobs in health care, IT, energy, manufacturing and construction.

Energy has driven economic growth in the state, thanks to coal and, since earlier this decade, oil and gas development from the Bakken formation. An e-mailer — not me — expounded on NBC’s misdirected coverage today at National Review’s The Corner blog:

I think it would be important to point out to everyone, that ND’s job growth is fueled by the oil boom in that state from the Bakken shale formation. The video ignores that fact because it doesn’t fit the MSM’s sense of justice to grow our economy by doing something evil like developing our natural resources.

A hundred-year supply of natural gas has just been discovered in the last couple of years in the Marcellus Shale which underlies much of PA, NY and to a lesser extent other eastern states. If these states are open to the development of the natural gas like ND has been to the oil, they could enjoy the same economic situation. Unfortunately for the laid-off blue collar workers from those industrial states, the elitist environmental-minded politicians and ngo’s will likely block the potential economic boom.

To drill and produce the natural gas you need, drill rig hands, welders, electricians, road builders, general construction crews, engineers, petroleum geologists, environmental scientists (to do it cleanly), regulators (to make sure it is done cleanly), truck drivers, accountants, bankers and more. In addition to all those directly employed by an oil and gas boom, add all the support services those new people to an area need. Oil or gas booms can literally be like gold rushes of Western lore.

We don’t think the anti-energy forces will win in the end, but they’re definitely trying with the usual fear and falsehoods.

The Pittsburgh Post-Gazette covered the Marcellus Shale’s potential in a major Sunday business piece, “Natural gas locked in the Marcellus Shale has companies rushing to cash in on possibilities“:

According to a report released in July by Penn State’s College of Earth and Mineral Sciences, the Marcellus Shale helped create more than 29,000 new jobs in Pennsylvania in 2008. Of those, about 14,000 were directly related to Marcellus development. The remainder were created by what the study calls “indirect and induced impacts,” such as a restaurant near a drilling site hiring more staff because it is serving a larger lunchtime crowd.

The study predicts more than a decade of dramatic growth, with more than 48,000 new jobs this year, then another 98,000 in 2010.

By 2020, the study says, Marcellus development could add $13.5 billion to the state’s economy and create more than 176,000 new jobs in a single year.

NAM President John Engler is expected to talk about new natural gas developments in remarks tomorrow at the State Chamber of Oklahoma’s public affairs conference. Oklahoma is home to the Woodford Shale deposit.

The natural gas industry group, Energy in Depth, has lots more information on shale gas at its website, www.energyindepth.org.

UPDATE (2:45 p.m.): Now that you’re considering a move to Bismarck, take a look at Bismarck Tribune’s excellent website. Most popular stories:

It’s about 0 degrees there at the moment, but the big Midwestern storm passed it by.

Rep. Ed Markey (D-MA), chairman of the House Select Committee on Energy Independence and Global Warming, and a sponsor of the House-passed cap-and-trade legislation, participated in a good public discussion yesterday at the Capitol sponsored by the American Petroleum Institute and Newsweek magazine.

Given the astonishing expansion of natural gas  in the United States thanks to hydrofracturing and directional drilling making shale deposits accessible, it was encouraging to hear Chairman Markey’s comments in support of its development.

Rep. Ed Markey: Ninety percent of all new electrical capacity in America since 1990 has been natural gas, and it’s going to continue on that way as a base load with the new mandates for renewable electricity in the states having a higher percentage increasingly coming from that source. But natural gas is going to do very well in the future, and the discoveries from the Marcellus Shale all the way through Barnett, that is all the way from New York down to Texas, are going to be big source of new electrical generation.

Howard Fineman, Newsweek: As a native of Pittsburgh, I’m really excited about the Marcellus Shale. I’m hoping maybe there’s some under my relative’s land. (laughter)

Here’s the sound clip.

That was just one exchange in a solid 90-minute program. API’s Jack Gerard was especially effective in detailing the many problems with the cap-and-trade legislation, starting with its destruction of jobs. He said it was time for “a reset” in Congress on climate legislation, a sound sentiment.

When Daniel Yergin writes about historic development in energy production, one pays attention. In today’s Wall Street Journal, joined by his colleague Robert Ineson, Yergin examines the rise of natural gas production in the United States made possible by technological advances that open up vast shale deposits to exploitation. From “America’s Natural Gas Revolution“:

The biggest energy innovation of the decade is natural gas—more specifically what is called “unconventional” natural gas. Some call it a revolution.

Yet the natural gas revolution has unfolded with no great fanfare, no grand opening ceremony, no ribbon cutting. It just crept up. In 1990, unconventional gas—from shales, coal-bed methane and so-called “tight” formations—was about 10% of total U.S. production. Today it is around 40%, and growing fast, with shale gas by far the biggest part.

The potential of this “shale gale” only really became clear around 2007. In Washington, D.C., the discovery has come later—only in the last few months.

Making this development possible has been hydrofracturing, or fraccing, the technique of injecting pressurized liquids into the strata to fracture the shale and free the gas. (See Shopfloor.org’s previous posts on the topic.) The potential of this gas development is especially important economically to northeastern states — and industry — because the Marcellus Shale is close to markets in New York, Pennsylvania and other heavy energy consuming areas.

Earlier in the decade, natural gas prices soared as demand grew, spiking as Hurricane Katrina disrupted supplies. Price and price volatility were big factors in driving natural-gas consuming industries like fertilizer and chemical manufacturing overseas, but now…well, there’s reason for optimism.

Except, as the authors note:

[Industrial] users and the utilities with their long investment horizons—both of which have been whipsawed by recurrent cycles of shortage and surplus in natural gas over several decades—are inherently skeptical and will require further confirmation of a sustained shale gale before committing.

Skepticism also arises because of the growing environmentalist/NIMBY alliance dedicated to regulating hydrofraccing into submission, with the activist journalism outfit, ProPublica.org, serving as the movement’s house organ. States now regulate this aspect of drilling, and the regulators stand by the quality and safety of their oversight. (See the Interstate Oil and Gas Compact Commission for details.)

But federal regulation is always superior to state regulation, right? That at least is the theory of sponsors of bills – H.R. 2766 and S.1215 — to bring hydrofraccing under the Clean Water Act authority, even though as Yergin and Ineson note, shale strata lie much, much deeper than watersheds. Today, the predictable New York Times adds its support for the bills in an editorial, “The Halliburton Loophole.”

State regulation is not a “loophole,” and even invoking the bugaboo of Halliburton does not make it one.

History tells us the real goal, at least for the environmentalists, behind legislation to impose a Clean Water Act regime over hydrofracturing is project-halting litigation. So you can understand industry’s skepticism.

More…

• Houston Chronicle, “Louisiana shale could change fate of U.S. energy supply“
• Houston Chronicle, “Shale gas is producing jobs, stimulating the economy“
• Natural gas producers group, EnergyInDepth

Reading the blog from the makers of the anti-Chevron film, “Crude,” we see this entry from Michael Bonfiglio, second unit director and producer, “CRUDE In Our Own Backyard?”

Many of us on the Crude filmmaking team are based in New York City, where the tap water is some of the cleanest in the country, and a debate is currently raging over drilling for natural gas that could threaten our drinking water.

Our friends at Riverkeeper oppose the drilling plan. Those who support the drilling maintain that with today’s technology, nothing bad could happen.  While the plaintiffs in Ecuador charge that Texaco used practices that were outdated even in the 1960s when drilling there began, are we really so arrogant to think that there will be no errors that could contaminate our reservoirs? And is a resource as vital as clean drinking water really something that we are willing to gamble on?

Bonfiglio is referring to hydrofracturing, the technology of injecting pressurized fluids into shale formations to fracture them and release natural gas. The natural gas producers group, Energy in Depth, has lots of information about this well-proven and safe technology, which is under attack from the usual activists who let the perfect be the enemy of good jobs. Start here.

Reading Bonfligio’s comments made us wonder when the next outrage-imbued “documentary” was going to come out, this time with natural gas companies as the evil corporate exploiters. There’s “Crude,” another one in the works about Eskimos and global warming, “The Kivalina Project.” You’ve got a cause, somebody has a movie and with cable television, a place to show it, so why not a flick accusing the natural gas industry of rampage and pollution? Maybe “Gas Attack.”

Well, of course there IS a movie. “Split Estate“ attacks natural gas drilling in western states, starting with the premise that mineral rights are somehow outrageous.

The Grand Junction (Colo.) Sentinel identifies the basic problem with “Split Estate” in an editorial, “Gas documentary offers anecdotes, not evidence“:

Many of the people featured in the documentary, “Split Estates,” have heart-breaking stories about health problems they have suffered.

What they don’t have, and what is absent from the documentary itself, is actual evidence that connects those health problems to the hydraulic fracturing of natural gas wells. Without this causal link between the fracturing substances and disease, the claim of wrongdoing — like the documentary itself — falls flat, at least with respect to hydraulic fracturing.

The same criticism applies to other environmental films we’ve seen. Of course human suffering elicits sympathy, but emotion does not equal “X is to blame.” In fact, when manipulated, emotion can lead one to think “X is to blame,” when in reality “Y is to blame.”

There’s probably a better movie to be made about energy, natural gas, hydrofracturing and the environment. Hope the directors talk to W. Neil Barto of Hughsville, Penn., where development of the Marcellus Shale is going great guns.

In July, four days before Barto’s 67th birthday, he received the first check from Chief Oil & Gas L.L.C., the Dallas company that last year drilled the wells on this hardscrabble farm, 21 miles east of Williamsport.

Barto’s monthly royalty checks now come in at about $7,000. It’s just the beginning. He and 14 neighbors get royalty checks from the sale of the gas, but the wells capture only a fraction of the gas trapped in the rock. Chief plans to drill many more wells on Barto’s land and surrounding properties.

Following up on yesterday’s Senate EPW hearing on energy policy and the states, where North Dakota Gov. John Hoeven called for a comprehensive national energy strategy (see post), the good people at Energy in Depth pass on an exchange the governor had with Sen. Jim Inhofe (R-OK):

Key Excerpts From Yesterday’s U.S. Senate Environment and Public Works Hearing
Dialogue starts at 101:50.
Click HERE to view.

U.S. Sen. Jim Inhofe (R-OK):  “Governor Hoeven, the thing I was going to bring up is there’s a lot of discussion, when you talk about your offset capabilities there, and what you’re doing, that’s great. We’re doing somewhat the same thing, although most of ours is marginal production. But there is a, I’d suggest to you, the use of hydraulic fracturing is necessary in your state to be able to explore, to retrieve all these oil capabilities.”

Gov. John Hoeven (R-ND):  “It’s absolutely vital. You know, you mention some of these new formations. They are not, uh, the oil isn’t connected. You’ve got to go underground. And you’re talking two miles underground. And make a fracture in order to get the oil to flow. That’s vitally important.”

U.S. Sen. Jim Inhofe (R-OK):  “I wanted to get that into the record, because there are some efforts to do away with hydraulic fracturing, and it would be devastating.”

Just so. Energy in Depth has been a strong voice defending hydrofracturing technology, in which pressurized water is pumped in subterranean strata to make the oil or natural gas accessible via drilling. Without hydrofrac, development of the Bakken Formation oil as well as our vast natural gas resources in Texas (Barnett Shale) and Pennsylvania/New York/Ohio (Marcellus Shale) would be prohibitively expensive.

The activist group, ProPublica, has been leading a bizarre campaign against the widely accepted technology, and by offering its agenda-driven reporting for free has been successful in getting newspapers to publish the articles. Apparently if it’s gratis, editing is optional.

This is a telling observation from an Energy in Depth rebuttal, which explains why we refer to ProPublica as an activist outlet, not a journalistic venture, “Separating Fiction from Invention in ProPublica’s Latest Anti-HF Attack Piece“:

Earlier this week, ProPublica author Abrahm Lustgarten released the latest installment in his series of advocacy pieces attacking the commonly used energy technology known as hydraulic fracturing. Instead of simply running on the ProPublica blog and website, however, the article was co-published with Politico and appeared in the paper’s news section (a letter to the editor from Energy In Depth policy director Lee Fuller will appear in the paper this Tuesday).

It wasn’t the first time that a mainstream news outlet provided ProPublica with a platform for this kind of product - although, for papers such as the Pittsburgh Post-Gazette, the determination has been made that ProPublica articles, when run, are more appropriately filed on its “opinion/perspectives” page than as part of its straight-news reporting.

Prior to its release, Energy In Depth spoke at length with Mr. Lustgarten about the direction of the (presumably already written) piece and the myriad mistakes he was making in issuing a blanket indictment of recent government and third-party reports finding that EPA regulation of hydraulic fracturing would cost Americans jobs, revenues and future security.  

Regrettably, none of those explanations made it into his final piece.

 And regrettably, ProPublica appears to be a model for future journalistic ventures.

As previously noted, this blogger once worked for Gov. John Hoeven. But it’s been eight years now.

From the testimony of Lynn Helms, director of the Department of Mineral Resources of the Industrial Commission, North Dakota, at Thursday’s hearing by a House Natural Resources and Environment Committee subcommittee hearingo natural gas and hydro fracturing. Helms was also representing the states of the Interstate Oil and Gas Compact Commission.

As the head regulator of oil and natural gas development in the State of North Dakota and an officer of the IOGCC representing all oil and natural gas producing state regulators, I can assure you that we have no higher priority than the protection of our states’ water resources – let me repeat no higher priority. Much of our entire regulatory framework, from drilling to completion, production, and finally plugging and abandonment, is centered around measures to prevent any contamination of the water resource. As a component of the completion of a well, hydraulic fracturing operations are thus thoroughly regulated and supervised by the states.

A major component of production operations is the proper storage and disposal of all production wastes, including hydraulic fracturing flow back water. These operations are carefully monitored, audited, and regulated in our state programs.

As I noted in my testimony above, hydraulic fracturing is a critical component of developing the Bakken formation, indeed every shale play throughout the U.S. and Canada. Without hydraulic fracturing, under regulation of the states, this resource could not be produced.

As Helms notes, the Bakken Formation can yield 4-7 billion barrels of oil and 4-7 trillion cubic feet of natural gas — using current technology, which now includes hydrofrac.

That’s energy security at work.

We also commend the testimony of Mike John, Vice President of Corporate Development and Government Relations, Eastern Division, Chesapeake Energy Corporation:

The topic of this hearing is very exciting because shale gas no longer just has “potential.” It is real, and it is a game-changer not only for America’s natural gas industry but also potentially for our nation, our economy and our environment! In fact, North American natural gas supply is so plentiful it has been described recently by some experts as a virtual “ocean of natural gas. As such, this shale gas revolution has made greater energy independence, enhanced national security and a significantly cleaner environment, attainable goals today. The real issue is no longer whether there is adequate supply, but rather whether there is adequate demand for this clean-burning, domestically produced fuel to continue the development of these enormous resources bases.