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Despite all the negative rhetoric from oil and gas opponents, there is one thing that they can’t take away from this industry, and that is its impressive record of achievement. This became quite clear to me, when I recently put the final touches on the World Oil Forecast & Data Book 2013, and a few trends leapt out from the pages.
For instance, did you know that the U.S. last year hit a major milestone, having now produced more than 200 billion bbl of oil since 1918? Did you know that the U.S. share of world output, which was as high as 70% in the 1920s, bottomed out at 7% from 2005 through 2008, and has now clawed its way back to 8.3% in 2012, thanks to fracing? Or did you know that worldwide crude and condensate production hit a new high last year, at above 28 billion bbl?
Here are more achievements: Worldwide oil reserves, by best reckoning, are now at their highest point ever, at roughly 1.5 trillion bbl, or 50% greater than just 20 years ago. Canada’s oil output is now double what it was just 22 years ago, at over 3.0 million bpd, thanks to oil sands. Chinese drilling has grown three-fold in only 15 years, while the country’s production squeezes out increases. Worldwide drilling, including the U.S., has exceeded 100,000 wells in five of the last eight years, an unprecedented level.
The overwhelming drivers in all of this achievement are technological advances, and the industry’s own hard work, often in spite of governmental interference.
So, the next time that the malcontent Hollywood dilettantes like Robert Redford, Alec Baldwin, Scarlett Johansson, Matt Damon, Gwyneth Paltrow, Mark Ruffalo, Mario Batali, Yoko Ono and Sean Lennon start whining about fracing, ask them what geological and/or engineering training they have to back up their assertions. Better yet, ask them what they do, when the sun doesn’t shine, and the wind doesn’t blow. Chances are good that they’re using hydrocarbons somewhere, some of the time.
If you’d like to check out information for yourself, you can access all or a portion of the Data Book at www.worldoil.com or www.gulfpub.com
A salute to Total’s CEO. Let’s hear it for Total CEO Christophe de Margerie, who last month did something that this editor wishes U.S. oil and gas executives would do—he told his own government (France) that one of its energy policies was wrong, that it needs to be discussed, and he told them how to fix it, too. It was a refreshing, outspoken moment of clarity in this industry that, regrettably, is way too infrequent. The issue that raised Mr. de Margerie’s ire was fracing. “The first thing to do for a proper debate is to know what we’re talking about,” said de Margerie. “Today, we’re speaking about something that hasn’t even been studied.” France in 2011 banned all shale gas extraction through hydraulic fracturing, because of water pollution and other environmental concerns.
Even though France may contain one of Europe’s largest shale gas reserves, the ban was confirmed by left-leaning President Francois Hollande, when he took office in May 2012. This dismayed most French industrial firms, which claim that shale gas could lower prices and boost their competitiveness. Mr. de Margerie further chastised French officials, saying, “For France, and for shale gas, scientists and others need to discuss the issue.”
Meanwhile, de Margerie may invest some of his company’s money in Britain, following last December’s lifting of the UK’s ban on hydraulic fracturing. The ban was rescinded after positive findings came out of a government-sponsored study of fracing. “We see potential in the UK, and we see an opportunity for development for Total,” said de Margerie. “We are discussing this with the relevant partners.”
Obama’s Energy and EPA picks generate concern. After four years of Energy Secretary Steven Chu, Interior Secretary Ken Salazar and former EPA administrator Lisa Jackson, it is hard to imagine a worse three-some, from an industry point of view. Yet, at least two of the President’s three picks to replace the aforementioned officials are worrisome. On March 4, Obama said he would nominate Physics Professor Ernest Moniz of the Massachusetts Institute of Technology to replace Chu. This merely replaces one professor heavy on theory (and no business experience) with another.
Moniz generates a couple of interesting dichotomies. On one hand, by leading the MIT Energy Initiative, where research focuses on reducing greenhouse gases blamed for global warming, one might guess that Moniz would be anti-industry. Yet, he has had good relations with several larger oil companies and some service/supply firms, albeit because they have contributed heavily to the Energy Initiative. Here’s another interesting dichotomy—Moniz appears to favor producing natural gas, even if it’s from fracing shale. This puts him at odds with environmentalists.
In contrast, there is no doubt where Gina McCarthy, Obama’s pick to replace Jackson, stands. A career bureaucrat and lifelong environmentalist, McCarthy has served the last four years as assistant EPA administrator, in charge of the Office of Air and Radiation. That’s right folks, she leads the part of EPA that imposes stricter and stricter air quality rulemaking on the industry. By leapfrogging McCarthy over Deputy EPA Administrator Bob Perciasepe, Obama has signaled that he is making good on his threat to bypass Congress and use Executive Branch powers to tackle climate change and energy policy.
No more Chavez. As this issue went to print on March 5, Venezuelan President Hugo Chavez died after a long battle with cancer. How his demise affects Venezuela’s upstream industry remains to be seen. Interestingly, upon his death, the price of oil rose on markets worldwide—something that, no doubt, would have made Chavez beam with pride. 
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