Thursday, June 09, 2011

Oil and Gas Industry Produces Good News

Two items from the world of energy exploration and production are both positive and welcome.

House Energy and Commerce Committee Chairman Fred Upton (R-MI) released the following statement in response to today's news that exploration in the Gulf of Mexico has uncovered existence of a massive oil and gas field.

"This discovery underscores the great potential of America's vast energy resources. The prospect of new American-made energy supplies means less pain at the pump for American families and more American jobs.

"ExxonMobil began work on this discovery well before the administration’s drilling moratorium was initially put in place. Without the moratorium, this discovery could have been made months sooner. Instead, development of an oil resource of nearly one billion barrels was stalled at a time when millions of Americans continue to struggle with high gas prices. While the administration's actions in the Gulf have resulted in a direct loss of jobs and revenue, as this discovery demonstrates, one of the greatest costs of the moratorium may be the delayed energy opportunities."

As part of the American Energy Initiative, House Republicans are working to remove roadblocks to American energy supplies, which will keep energy costs down, fortify our energy security, and create American jobs. Click here to view committee hearing materials related to the moratorium."

And, Shell has approved a $2.5 billion project to develop its Cardamom oil and gas field in the deep-water Gulf of Mexico, marking the latest vote of confidence in the U.S. offshore region following the BP oil spill last year.

The Cardamom field, located roughly 225 miles southwest of New Orleans, is expected to produce 50,000 barrels of oil equivalent per day at its peak and more than 140 million barrels of oil equivalent over its lifespan, Houston-based Shell Oil, the U.S. arm of European oil major Royal Dutch Shell, said in a statement today.

Rather than build a free-standing facility, Shell said it will install production equipment on the sea floor at Cardamom that extracts the oil and gas and routes it to Shell’s nearby Auger offshore platform, which will be modified to handle the additional output. A first Cardamom exploration well has been producing from Auger since late last year, Shell said.

Yes, Virginia, that is a $2.5 billion investment that Shell has decided to gamble on. Something often lost in the bellowing of those who would deny oil and gas companies profits is that the business is unbelievably expensive. This new anticipated production will not come online until 2014, if all goes well. Nothing happens quickly in energy production.

Despite the Obama administration's best efforts, the domestic oil and gas industry is not completely gone. Yet.

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