The nationwide oil and natural gas boom you’ve been reading about may be coming – in a small yet profitable way – to the Deep South, and Alabama should ready itself for the potential opportunities that may bubble up.
Alabama produced nearly 10,000 barrels of crude oil last year – an increase of more than a third since 2010 – sharply reversing a two decade decline in production, according to the Institute for Energy Research. The growth was made possible by oil companies applying new technology to old wells, many of which are located in the Black Warrior Basin in the northwestern quadrant of the state.
Alabama was ranked 14th among the states in oil production last April by the U.S. Energy Information Administration (EIA). Not too shabby – and there’s room to grow.
In 2011, the EIA also ranked Alabama 14th in natural gas production. Much of that comes from the offshore wells dotting the horizon off the coasts of Mobile and Baldwin Counties, but the state has many onshore wells, too, and our future may be in something else entirely: shale formations.
The natural gas boom experienced in northern states comes from deposits trapped in rock formations known as shale. It wasn’t cost effective to extract this gas a decade ago, but new technologies – and rising prices – have changed everything. Through a process called hydraulic fracking water is pumped into the shale and the gas is released, collected and separated. Environmentalists oppose the practice, but it has been used for years and the Environmental Protection Agency hasn’t been able to prove that it’s harmful.
Alabama may have a very profitable future in the Conasauga, Devonian and Neal shale formations in the upper middle part of the state. The Geological Survey of Alabama estimates that these formations may hold more than 800-trillion cubic feet of gas resources. That’s a lot of gas waiting to be extracted, creating jobs and fueling economic growth.
Meanwhile, the oil-rich nations of OPEC are reported to be concerned about the vast amounts of oil and natural gas flowing from Texas and elsewhere in the United States. How worried? A recent film titled “Promised Land” that was critical of fracking and starring Matt Damon was partially financed by the government of Abu Dhabi, an oil-saturated emirate in the Persian Gulf.
Their concern will only grow as states like Alabama embrace new technology and unlock old resources which, according to the EIA, could help push U.S. oil production to 10-million barrels per day by 2040. Compare that to OPEC’s 30-million barrel per day output this year and one can see how the market could change. Even if the global oil cartel adjusts its output, its grip on the global economy will weaken and the outsized influence of its member nations will decrease.
This is all welcome news for oil-thirsty Americans and job-hungry Alabamians. It’s also a vindication of the Republican Party’s long-held policy of pursuing domestic energy independence, which broadly speaking means reducing our reliance on foreign oil by drilling for our own. The concept even began the natural resources plank of the Republican Party’s last platform in 2012.
“The Republican Party is committed to domestic energy independence,” the platform statement read. “The United States and its neighbors to the North and South have been blessed with abundant energy resources, tapped and untapped, traditional and alternative, that are among the largest and most valuable on earth. Advancing technology has given us a more accurate understanding of the nation’s enormous reserves that are ours for the development. The role of public officials must be to encourage responsible development across the board.”
The domestic oil boom is also vindication for former Alaska governor Sarah Palin.
“The chant is ‘drill, baby, drill,’” she said during the vice presidential debate in 2008. “And that’s what we hear all across this country in our rallies because people are so hungry for those domestic sources of energy to be tapped into.”
Her view was attacked as simplistic, ineffective and harmful.
But five years later, as we see the effect of drilling – increased domestic oil production, decreased reliance on foreign oil and the potential of untapped wealth beneath our feet – perhaps we should start chanting “Drill, ‘Bama, Drill!”