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Breakingviews: Oiling America's wheels

Wednesday, May 28, 2014 - 03:22

May 28 - Antony Currie and Chris Swann discuss why a new report slashing California's shale resources doesn't impact fracking's growth – and how the United States may be energy independent by 2020.

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Our hopes and America's energy independence. Disappearing and that at least seems to be what some people entering from. A new report from the government is about to come out. -- the California's reserves. I -- fact jumping well. And even exist right Chris this thing saying that they they thought they have fourteen billion barrels of oil underneath California's. Soil and that sense that might be six engineer Mike got this means we're in trouble. All Ali well all on the -- it doesn't that is yet California shows meant to be about sixty full sentence that Americans take shale. So the until -- the opponents of fracking but extremely excited about this they believe that. Old economic benefits of the oil industry has promised just a mirage. Well this this this this this would surely -- right -- if he if he suddenly have this 64%. Little disappearing then. My god this is terrible sadly it's based on -- well sadly the -- fact is it's based on statistical misunderstanding which is. And then the report is all about oil resources now these. This is oil in the ground that can be extracted didn't costs 300 dollars a barrel -- price is no object. That the more meaningful. Measure of how much -- we have as proven reserves and Andy's just keep nice and threaten. Walesa the difference there's proven reserves. Is oil under the ground or gas and that we that we know we can probably extract. Act current price trust and make a profit ethic and of course that that California show was never really meant to be any great shakes -- everybody even with 64% of them what winds that. Part part of the reason yeah. Is that. The fiscal terms were not particularly favorable Californians -- difficult place to deal. So be -- the Energy Information Administration official here it pumps out these tickets. What was expecting the oil output from California -- peak at about 56000. Barrels a day. All the way out 24 and putting that in perspective than. America currently produces about eight point three million barrels a day so this is pretty much a statistical mirage says. The numbers look big but that's it was just. This is what you not get a -- and get out and got a seeming we have the right technologies to drive prices and what the future but actually. He's -- prices. This doesn't even rank I think you've yet to get some figures and he nice that it doesn't even rank in the top five even if I gambled that the top five shale plays accounts for 91%. To ten -- -- Arnold even in the top five. I think the interesting thing about this story that is how the opponents -- that fracking. How many adjustments. -- points tonight. Have tried to wish away the energy independence that phenomena in -- they they think so and that's that's going great guns. Writes I think we've we will in the past six years. America's energy sizzling colds violent pupils by about half half and then according to city which is one of them won't come -- to something particular issue. America went. Have any need to -- in polls by 20/20 and I don't think that story's really you know to the -- night the tickets. -- it will thanks Chris great news for the energy companies not say good for opponents of fracking on this one. But will be watching now we've got it will breaking -- tomorrow.

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Breakingviews: Oiling America's wheels

Wednesday, May 28, 2014 - 03:22