A billionaire oilman who is widely credited for jump-starting the Bakken oil boom in North Dakota and Montana says energy independence for the United States is no longer a pipe dream.
With the right energy policies, the United States could become energy independent within a few years, said Harold Hamm, founder and chief executive of Continental Resources, the nation's 14th-largest oil company.
"Somebody asked me why energy independence is important," Hamm said Thursday. "I said it might mean that your son doesn't have to go fight in Afghanistan."
Hamm is the youngest of 13 children born to an Oklahoma sharecropper. He developed a reputation as a successful wildcatter and then struck it big by discovering oil in places that others had overlooked.
He delivered the keynote address at the statewide meeting of the Montana Ambassadors on Thursday. In an interview with The Gazette, Hamm said modern technology such as horizontal drilling and hydraulic fracturing have helped drillers uncover major oil and gas discoveries throughout the United States.
Continental Resources helped touch off the Bakken oil boom nearly a decade ago when the Elm Coulee field northwest of Sidney was developed. Hamm still refers to Montana as the birthplace of the Bakken. Much of the oil activity moved east into North Dakota in ensuing years.
Geology has a lot to do with the rigs moving east. But activity is picking back up in Montana, with about 20 rigs operating, Hamm said.
The nation's domestic oil production is running at about 10 million barrels per day but could climb to 16 million barrels per day within a few years, thanks to major new discoveries coming online, Hamm said.
"It depends on whether the emphasis is put on it." Hamm said. He explained that Congress passed energy independence legislation a few years ago, but never put any resources toward reaching that goal.
Mitt Romney, the front runner for the Republican presidential nomination, tapped Hamm as chairman of Romney's Energy Policy Advisory Group earlier this month.
"This is a whole lot of people in a whole lot of different forms of energy," Hamm said the group. "We'll have experts from a lot of different areas."
He said a Romney administration would consider a wide variety of energy sources but would also emphasize increased development of domestic oil and gas.
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"Everybody is concerned about the price of fuel, and basically the way to cure that is to increase supply," Hamm said. "Supply will play a large part, and probably (a Romney energy policy) will be all inclusive, with different forms of energy."
Prices for natural gas have plunged below $3 per thousand cubic feet in the wake of a boom in shale gas development. Some have suggested that oil prices could also take a big plunge in the wake of more domestic development.
Hamm cautioned that natural gas is more of a national market, making prices more sensitive to supply and demand. But global demand determines oil prices, so it wouldn't be as easy for U.S. production to bring down world oil prices.
Hamm said the proposed Keystone XL Pipeline, which is designed to carry Canadian crude oil to refineries in the Gulf of Mexico, remains crucial to the future of the Bakken. The pipeline, which would be built through Eastern Montana, would include an on-ramp to transport Bakken crude.
Gov. Brian Schweitzer said he and Hamm first met during negotiations for the Keystone XL pipeline. Producers in North Dakota were frustrated because pipeline developers didn't have much interest in transporting North Dakota crude.
"We had the largest field found in the world found in the past 40 years, and yet it's still not served by a major pipeline," Hamm said.
Schweitzer insisted that the pipeline would carry Bakken crude if the developers planned to go across Montana. "Pretty soon he had a new best friend," Hamm said.
Last year Hamm visited the White House for a conference aimed at wealthy Americans who have pledged to donate significant sums to charity. Hamm tried to explain to President Barack Obama the revolution in the oil and gas industry that has been enabled by newer technology such as horizontal drilling and hydraulic fracturing.
Obama, he said, didn't pay much attention, instead emphasizing the need to move toward renewable energy.
And that brings up one of Hamm's biggest frustrations.
"I personally don't think Washington ought to be picking what form of energy we use," he said. "I think the market ought to do that, and the market has done a pretty good job so far."