Energy Boom Will Lead To Energy Shortage

$147 per barrel oil prices set off a frenzy of new domestic oil drilling that has all but ceased with $46 per barrel. The drop in natural gas drilling has been even more pronounced. When demand returns, domestic oil and gas supplies will likely not.

"Domestic oil production is expected to increase this year over last, for the first time since 1991, according to projections by the Energy Department.

Many energy executives had thought the drilling renaissance, coming after years of declines, represented a new era, particularly for gas production. Domestic natural gas output rose by almost 8 percent last year from 2007, the biggest annual jump in more than a generation.

But that boom has created such abundant supplies that companies are not only drilling less but also deciding not to pump from wells already drilled.

The number of oil and gas rigs deployed to tap new energy supplies across the country has plunged to less than 1,200 from 2,400 last summer, and energy executives say the drop is accelerating further.

Energy experts and company executives warn that oil and gas companies now cutting back on investments will be unable to respond quickly to a future economic recovery. That means a glut could rapidly turn to scarcity, sending energy prices soaring again. Already, experts are predicting that lower domestic gas production by the end of the year will require increased imports of liquefied natural gas from places like Qatar."

Thanks to Mark Boshnack

Full Story: As Oil and Gas Prices Plunge, Drilling Frenzy Ends

Comments

Comments

Bring It On

High energy prices for fossil fuels are inevitable anyway since they are finite resources and we are overly dependent on them.

Theoretically, we shouldn't have to endure high prices. We should just invest in clean-renewable energy on our own, walk, ride transit, and make fossil fuels obsolete through our own purchasing decisions.

In the real world, high prices are probably the only thing that will give us enough of a punch in the gut to do what's necessary for the future of our economy and our environment.

High gas prices will "hurt" society like exercise "hurts" an individual. It's worth it.

Will the impact be fairly distributed. No. That's a shame. My solution: tell people to get ready. High prices are on the way. What are you doing to become independent of oil?

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