Tuesday, June 24, 2008

Oil: While Congress Slept

Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant...In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving...assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil...The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels...but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel. [1/7-1/4 of the cost per barrel in 2008! ED]...Massive Oil Deposit Could Increase US Reserves by 10X, NextEnergyNews.com

The proven reserves in the US, according to the US Geological Service, are currently 21 billion barrels. Apparently, Democrats and many Republicans in Congress think that's just fine and dandy. It's sort of like a stuffy, stodgy old club where the grandees sit around whining such original thoughts as What do we need all that dirty stuff for? Let's get those funny looking people overseas provide it for us. We've got the money! We can always send the volunteer Army if the price gets too high. That's worked so well in keeping the price down in the Middle East. And hey, what are volunteers in the Army but people who couldn't find anything else to do? And if the hoi-polloi doesn't like it, let them run their cars on corn oil! You're right. It doesn't sound like the Petroleum Club in Houston. It sounds like an upper class all-male club in the 19th century. The only differences? The stodgy members are from both sexes; it's illegal to smoke cigars. The rest, especially the bully pulpit for the pompous blowhard elites, has not changed.

Let's see. We've got 200-500 billion barrels of recoverable oil in North Dakota that Congress hasn't noticed. That's a range of between 39 and 80 years supply at current rates of consumption. What else?

An oil discovery by Chevron Corp. has bolstered prospects that petroleum companies will be able to tap giant reserves that lie far beneath the deep waters of the Gulf of Mexico...Oil analysts and company executives said...test results from a well 175 miles off the coast of Louisiana indicate that the oil industry will be able to recover well more than 3 billion barrels, and perhaps as much as 15 billion barrels, of oil from a geological area known as the lower tertiary trend, making it the biggest addition to U.S. petroleum reserves in decades. The upper end of the estimate could boost U.S. reserves by 50 percent. US Oil Reserves Get a Big Boost, Steven Mulson,Washington Post

Okay, taking a middle figure, say 10 billion barrels of oil, that's another 2 years of supply at current consumption. What else?

A 1993 United States Geological Survey (USGS) study indicated at least 4.3 billion (95% probability) and possibly as much as 11.8 billion...with a mean value of 7.7 billion barrels (1.7 km³). In addition, in the entire assessment area, which covers not only land under Federal jurisdiction, but also Native lands and adjacent State waters within three miles (5 km), technically recoverable oil is estimated to be at least 5.7 billion (95%) and as much as 16.0 billion (5%) barrels (0.7 to 1.9 km³), with a mean value of 10.4 billion barrels (1.2 km³). Economically recoverable oil within the Federal lands assuming a market price of $40/barrel (constant 1996 dollars - the highest price included in the USGS study) is estimated to be between 3.4 billion (95%) and 10.4 billion (5%) barrels (0.5 to 1.7 km³), with a mean value of 6.8 billion barrels (1.1 km³).

Long story short, about a year and a half of domestic supply. Congress slept through this one too, renewing the ban on oil from this source each year since 1993. Note that the "economically recoverable" price for the lowest figure was $40 a barrel, less than 1/3 of the current price.

Okay, we're up to between 43 and 84 years of recoverable reserves. More? Yep.

The offshore areas of the United States are estimated to contain significant quantities of resources in yet-to-be-discovered fields. MMS estimates of oil and gas resources in undiscovered fields on the OCS (2006, mean estimates) total 86 billion barrels of oil and 420 trillion cubic feet of gas. These volumes represent about 60 percent of the oil and 40 percent of the natural gas resources estimated to be contained in remaining undiscovered fields in the United States....Offshore Minerals Management, 12/12/2007

That's a 400% increase in reserves, or another 16-18 years of supply at current consumption. Gazooks, we're talking 59-100 years of supply, in our own back yard, that belongs to us!

Yes, you've asked the right question. What the hell is going on in the halls of Congress? You're paying $4.68 for regular and some snotnosed "representative" of the people is saying you can't have America's own stuff? Who do these people represent?

Not you. Not the oil companies.

And, not thoughts from some other significant representatives of the oil business, to wit:

Proven reserves are not a measure of future supply

“We are looking at more than four and a half trillion barrels of potentially recoverable oil. That number translates into 140 years of oil at current rates of consumption, or to put it anther way, the world has only consumed about 18 percent of its conventional oil potential...That fact alone should discredit the argument that peak oil is imminent and put our minds at ease concerning future petrol supplies...
The Impact of Upstream Technological Advances on Future Oil Supply" - Mr. Abdallah S. Jum'ah, President & Chief Executive Officer, Saudi Aramco, address to OPEC, Vienna, Austria, Sept. 13, 2006.

"The world has only consumed about 18 percent of its conventional oil potential"!!!

Even the Arabs know our Senators and Representatives are asleep at the wheel. When are you going to wake them up, voters?


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