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Imagine An Oil Gusher January 6, 2008

Posted by awatcher in Uncategorized.
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If one reads between the lines of a Durango Herald story, it is entirely possible that Colorado and Utah will be the beneficiaries of severance tax revenues beyond imagination if shale oil production comes on line.

The article talks about being able to produce one million barrels of oil per acre.  At today’s relatively low prices, that is $100 million dollars of production an acre.

In an effort to scoff at the level of production that can be reached, Randy Udall, Mark Udall’s brother seems to acknowledge that production could be 100,000 barrels a day.  Environmentalists always seem to grossly under estimate potential energy production, usually by a factor of 20, so assume 2 million barrels of oil a day.

Figure severance taxes to be somewhere in the neighborhood of $8 million a day and ramping up as the price of oil ramps up.

Does anyone really think that Colorado and the nation will not develop this oil?