The Washington Times has an article that focuses on the connection between increased domestic energy production, a U.S. manufacturing resurgence and an improved trade balance:

A recent wave of “re-shoring” of overseas manufacturing plants by U.S. chemical, auto and other companies signals the revival of U.S. competitiveness in many industries vis-a-vis Europe, Japan, China and other major trade partners. The trend got a big push recently from a dramatic drop in American natural gas prices, making the U.S. a highly desirable location for manufacturers relying on gas for energy and as a component in plastics, chemicals and other essential materials. Rising U.S. competitiveness has stoked a major export revival since 2009, helping pull the economy out of recession. “The secular trend o... more »

Lots of discussion this week about energy production from federally controlled areas – onshore and offshore – as a subset of an overall rise in U.S. oil and natural gas output. Some charts to consider, developed from data in the U.S. Energy Information Administration’s most recent short-term energy outlook report, released earlier this month.

First, graphing U.S. crude oil production from federal and non-federal areas:

As you can see, U.S. crude production has increased steadily since 2008 (blue top line). Remember, the oil production timeline is a long one. Offshore and onshore projects can take up to a decade to develop, from leasing to actual production. Broken out by area, crude production on non-federal lands (69.7 percent of total production) has risen dramatically since 201... more »

Reuters reports that eight deepwater drilling rigs are expected in the Gulf of Mexico this year, which would bring the active deepwater contingent to 29 – just short of the number before the 2010 Macando accident. While that will be a positive step, here are some reasons to hold off popping the champagne corks:

• The eight rigs are not yet in the Gulf, not yet working.
• While permit applications to work on Gulf jobs have been submitted, the rigs will return there only if the permits are approved.
• Given “A” and “B” above, it’s still premature to talk about Gulf drilling being back to normal or “close to pre-moratorium levels.”
• The eight rigs would bring the Gulf rig count to “just short of the level” before the administration’s permit moratorium, not equal to levels of two y... more »

Back in February we ran the chart below. Then, at a congressional hearing last month, API President and CEO Jack Gerard referred to it in testimony urging lawmakers to consider the effects of increased U.S. oil production on global crude oil markets. We’ve written about the effects of increasing domestic supply here, here and here.

Last weekend the Washington Post took issue with the notion that the basic laws of supply and demand apply to crude oil like they do other globally traded commodities. The article noted Gerard’s congressional statements about supply and market expectations and dismissed them:

"As Gerard told it, 'the price of crude oil over three days dropped $15 a barrel and continued to move down.' The lesson, he said, was that 'markets are driven on a global basis... more »

One of the most important things to know about producing oil on federal lands is that it takes time. Lots of it. As this chart developed by API illustrates, it’s up to a decade from the time a lease is won at auction to the first actual production of oil. If you include pre-lease sale studies and evaluation, which have to be done before companies bid on federal leases, that’s a couple more years.

The point here is that the production gains the country is seeing now date to a process that started up to a decade or more ago. You don’t just flip a switch and suddenly oil starts flowing.

This timeline also has implications for future production, given current federal data that show leasing acreage on federal lands at its lowest point since 2001 – declining from 47 million acres in 200... more »