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“Not In My Back Yard”, Indeed! Texas Leads the Way to Energy Security

So is a residential subdivision less environmentally sensitive than the Arctic Coastal Plain?

Elizabeth Ames Jones is a Railroad Commissioner in the State of Texas. The Railroad Commission is the primary state body with responsibility for regulating oil and gas drilling and production in the state.

Here’s a link to her Op-Ed piece in the Wall Street Journal highlighting the success of the Barnett Shale natural gas play near Fort Worth.
Link may require subscription.

A rig drilling for natural gas well in the Barnett Shale trend in Denton County, Texas.

For those of you of the Yankee persuasion, the rig is a temporary structure that is used only in the drilling phase of a well – a few weeks at most.

[While] Congress balks at drilling in the Arctic National Wildlife Refuge in Alaska out of fear of disturbing a few caribou, [Texas has] moved ahead to safely tap into an energy reserve located underneath suburban homes. And there is no better example of how Texas gets the balance right between energy and the environment than the development of the Barnett Shale.

[snip]

Today, the price of natural gas is $9 per MMBtu, (one million British thermal units), up from $3 per MMBtu in 2000. As a result, more than 7,500 wells are producing today in the Barnett Shale, 10 times the yearly total in 2000. In 2000, the Texas Railroad Commission issued 273 permits for the Barnett; this past year we issued 3,140 permits. The Barnett Shale alone produced 1.2 trillion cubic feet of natural gas last year. This field is sometimes referred to as a “17 year, overnight success.”

Unless I’m mistaken, the Newark East (Barnett Shale) Field is the #1 gas producing field in the nation, from rocks that were deemed not economically productive just a generation ago.

But it’s not just the producers who are reaping the rewards. Dallas Fort Worth Airport and many cities, including Fort Worth and Arlington, will be receiving hundreds of millions of dollars in lease bonuses and royalties from natural gas wells over the next 25 years. [Not to mention the royalties and lease bonuses received by the thousands of homeowners, and the thousands of jobs provided, directly and indirectly, by all of this intense activity. – Ed.]

[snip]

A large new development sits under Shreveport, La., and stretches into Arkansas and Texas. Right now, energy companies are poised to tap into what may be the largest natural gas find in the continental U.S. And as the drilling starts up, they will be using techniques pioneered by Mr. Mitchell and perfected in the Barnett.

We have a lot to learn from the success of the Barnett Shale. One is that we have a lot of resources and ingenuity right here at home. Unfortunately, we have a lot of politicians who are reflexively antagonistic to any answer that does not come out of a Washington think tank.

We are heavily dependent on fossil fuels; with a growing economy the size of ours, fossil fuels will be important for generations. It would be foolish to forsake oil and gas technologies to put all our chips on some new technology, no matter how brilliant it seems. Remember ethanol?

I am in no way arguing against development of alternatives. Rather, unconventional gas was, in effect, an alternative fuel, but one that had a lot of advantages, and one that just happened to work out. Today, some 43% of natural gas supplies are from sources that were a pipe dream when I graduated from college in 1978. Natural gas research may provide a template by which multiple future alternatives can be pursued until the small handful that make economic sense prove themselves.

COMMENTS

  • mccainsupporter

    This comment is a suggestion for John McCain to help follow through on his promise to increase offshore drilling, help the American people and create an immediate economic stimulus to the American economy.

    Democrats under the leadership of Barack Obama want to effectively give away in trust our offshore exclusive economic zone by standing in the way of any current offshore development. Under the 1982 United Nations Law of the Seas Convention the US has an exclusive economic zone of 200 nautical miles and mineral seabed rights up to 350 nautical miles extending along the Continental shelf. A nautical mile is 6080 feet so our exclusive economic zone extends about 240 miles and mineral seabed rights extend 420 miles.

    The US has the world’s largest offshore exclusive economic zone totaling 4.4 million square miles. In comparison, the total land area of the United States is only 3.4 million square miles. Because we have the world’s largest offshore coastline which is twenty-five percent greater than our land area, it only makes common sense that we exploit our offshore resources to achieve our energy independence.

    The best way to effectively exploit our offshore resources and really help the average American is to divide up the 4.4 million square miles of US offshore economic zone among the 218 million Americans adults who are 18 years and older according to the 2003 US census. Because a square mile equals 640 acres, there would be 2.816 billion offshore acres to be divided among the 218 million American adults.

    The current federally leased acreage of roughly 100 million acres both onshore and offshore represents roughly only three and a half percent of the total 2.8 billion offshore exclusive economic zone acreage of land that could be leased and divided up by all Americans. Subtract out that acreage and you still have 2.7 billion unleased acreage. Under this proposal, every adult in the US would be entitled to 12.8 acres. This would be a takeoff from the forty acres and a mule theme except it would be mineral rights to offshore production. A lottery could be set up to randomly assign 12.8 acres to every American. You may end up with mineral rights to acreage around American Samao.

    The resulting lottery would create ten of thousands of instant American millionaires whose acreage abuts known contiguous offshore oil fields. A market to buy and sell acreage rights could be created which would put money into the pockets of those who acreage contains unknown oil potential. Turning over the acreage to ordinary Americans to collect leasing revenues and royalty rights will empower Americans and stimulate the economy. We do not need the Department of Interior and Nancy Pelosi to argue over the next four years which tracts of land should be leased and have that money going into the General Treasury.

    Give the land to every American and they can expeditiously see to the leasing of the land. Mercedes Benz limousine liberals and wacko environmentalists can finally keep their mouths shut and instead use their own fat checkbooks to buy up acreage and prevent development if they choose with the acreage they buy from ordinary Americans.

    Let Barack Obama and the Democrats tell the American people that they are better trustees of the offshore land with limited or no development and that each American is not entitled and should not profit from their 12.8 acres of offshore land. Leasing and royalty payments are not insignifcant even for small acreage. An example is east of Fort Worth Texas where natural gas drilling companies are paying 25 percent royalties and $3000 leasing payments to owners of quarter acre homes for natural gas drilling rights under their homes.

    • Vladimir

      Deal?

  • jimmuy8

    That’s how much my sister-in-law got in Arlington. For an average suburban lot. They figure they’ll get enough to pay for the rest of their daughter’s college over the next few years.

    Yeah, having a pumpjack in your yard or neighborhood really sucks.

    • Dave_in_Fla

      Dang, that is so cool.

      • Vladimir

        The eastern Gulf of Mexico, that is.

        • Dave_in_Fla

          Heck, I’ll support wells off my eastern coast too.

  • streetwise

    I live in Barnett Shale country, and the rigs are all over the place. As you state, they are temporary. When the vertical drill is done, they’re moved to the next spot. The rest of the drill is horizontal and radiates out from the center, under people’s properties.

    The $11,000 figure referenced above seems high for a typical homeowner, although this is an evolving situation. I think a more typical payout for a typical (well under an acre) home lot would be several thousand dollars upfront, and several hundred a month in royalties.

    I’ll take it!

    • streetwise

      I live in Barnett Shale country, and the rigs are all over the place. As you state, they are temporary. When the vertical drill is done, they’re moved to the next spot. The rest of the drill is horizontal and radiates out from the center, under people’s properties.

      The $11,000 figure referenced above seems high for a typical homeowner, although this is an evolving situation. I think a more typical payout for a typical (well under an acre) home lot would be several thousand dollars upfront, and several hundred a month in royalties.

      I’ll take it!