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How Much Oil Do We Actually Have?

| Tuesday April 13th, 2010 | 5 Comments

When President Obama said he would expand offshore drilling on March 31st, he qualified his announcement by saying domestic supplies could never provide all the oil the country needs.

A little remarked study (PDF) released in February begs to differ. The study, commissioned by the National Association of Regulatory Utility Commissioners (NARUC), concludes that if all drilling restrictions were lifted — both offshore and on land — there may be 229 billion barrels of recoverable oil in the United States, 37 billion more than previous estimates.

The US consumes about 7 billion barrels of oil a year, so that represents about 30 years of consumption, at current levels. The study also raises the amount of recoverable natural gas from 1748 trillion cubic feet to 2034 Tcf.

229 billion barrels, with a catch

Those 229 billion barrels includes 15 billion in Alaska, 6 of which are under the Arctic National Wildlife Refuge. It also includes 30 billion off the west coast. Expanded drilling off California, Oregon and Washington is considered politically unacceptable given the left-leaning, environmentally conscious populations of all three states, and was not included in Obama’s plan. Some expanded drilling in Alaska was included — but certainly not in the ANWR.

Still, the report shows why some Republicans think Obama’s recent decision did not go far enough. It details a laundry list of dire economic impacts of continued moratoriums on offshore drilling (keeping in mind it was issued before Obama’s announcement), including a loss of 13 million jobs in energy intensive industries and $607 billion more handed over to OPEC for oil. In all, the report warns America could suffer a $2.4 trillion loss because of the moratoria, according to Reuters.

The dire predictions, if not the figures for recoverable oil, have me questioning the objectivity of the report’s authors. NARUC is a non-profit representing the state commission responsible for regulating utilities. The report was prepared by SAIC, which does work for the Defense Department, according to Forbes, (thanks to them for pointing out the study) and the Gas Technology Institute (GTI), a research firm that seems to be fully saturated by the natural gas industry.

It sounds like they’re biased toward fossil fuels. Does anyone know if their estimates are legit?


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  • wk

    The Pew study found that countries with strong and clear national policies, mandated clean energy quotas, prioritized loans for renewable energy projects and a carbon market were leaders in the green technology revolution. Hence Germany, Brazil, Spain, the UK, and China have the largest clean energy industries when measured as a percentage of their economies. Countries without such a policy framework are falling behind: Japan, Australia, and the United States fall into this group. So when using renewable energies’ percentage of a national economy, China comes in third. And the United States? A laggardly eleventh.

  • Sylvestor J. Foghorn

    It is the cost of the oil here vs the cost of oil 'there'. Oil companies have stock holders and stock holders don't want expensive oil when cheap oil can be had. We will keep importing because it is the far and away best deal, especially if the oil companies don't get a lot of 'favors' from the government.

  • Rob Bryan

    First off, I would question the sources of data. The convenience of this new information is shall we say, convenient? Remember, just because conspiracy nuts think there's a conspiracy, doesn't mean there isn't one.

    What I don't understand is how this helps our trade balance. If we give the oil leases to international corporations who don't pay US taxes, like say Exxon, does Exxon sell it to us? and then take the money offshore? Inquiring minds….

  • Rob Bryan

    First off, I too would question the sources of data. The convenience of this new information is shall we say, convenient? Remember, just because conspiracy nuts think there's a conspiracy, doesn't mean there isn't one.

    What I don't understand is how this helps our trade balance. If we give the oil leases to international corporations who don't pay US taxes, like say Exxon, does Exxon sell it to us? and then take the money offshore? Inquiring minds….

  • caribousteaks

    The NARUC report actually does a fair job of summing things up. As with all things seismic, especially old 1980s seismic which is what we have to go on, the answer to “how much is there” is a big educated guess. The fact is oil is where you find it, and how you find it. Some oil is there but very difficult to get out, other oil, like in onshore ANWR is safer and relatively easy to get at compared to OCS oil. Oil is not a bank in the ground, it takes decades often to access oil; you can't just turn on the green light and get oil. The industry has to apply for and win 1000s of permits per well, build extremely expensive infrastructure, pipelines processing facilities, do years of exploration work to decide whats there and how to produce it, etc. Its a very long and complex process.
    The report actually uses low estimates for some fields. ANWR's 10-02 for example was estimated by the USGS to have a mean of 10.4 bbls. The 6bbls figure listed is a round up of the low 95% probability figure of 5.6bbls which comes from the same report. (The high figure @ 5% prob. is 16bbls FYI). But even these figures are very misleading. ANWR figures used today are “technical recovery rate” figures not “in-place reserve” figures. (the in-place reserve figures are 16-42bbls) I am pretty sure in thinking the OCS figures listed in the report are not technical recovery rate figures but in-place reserve estimates based on 1970s seismic work (very limited). So really they are mixing apples and oranges with their figures. Also just to complicate things further the USGS ANWR figures 5.6 – 10.4 – 16bbls are all based on a technical recovery rate of 37% which, in the mid 90s when the report was written, was normal. Today recovery rates are well over 60% in the Arctic so the USGS figures are very outdated.
    How accurate is the NARUC report? Well probably as accurate as one could get. It uses USGS and MMS figures which are the only figures we have to go by. These estimates are just that, estimates, no one knows at all until exploration wells are drilled what exists in the OCS or other areas. The 1970s and 80s 2D seismic data used by the MMS and USGS in predicting oil reserves is probably hazzy at best so putting an exact figure on things is not terribly compelling. But what one can say with a fair bit of certainty is that there is A LOT OF OIL AND GAS out there. That is almost certain. Versus saying there is only a little oil and gas out there.
    Giving timelines of how long oil will last is very disingenuous. It is physically impossible to produce all oil at once let alone consume it all at once. Prudhoe Bay in Alaska was claimed to have “2-4 years” worth of oil and yet 30+ years latter it is still producing. Oil pipelines are only so big so it is extremely unrealistic to state that there are X number of years worth of oil. Oil fields produce on a bell curve and using this fact to make predictions is the only realistic way to gauge the lifespan of a field. The choice in the long run is very simple: do you buy you oil from abroad or do you produce it at home? Buying from abroad is a one way economic street; a lose / win situation. Domestic production is win /win everytime.

    Just a minor point but to Rob Bryan, Exxon and all the other oil companies provide America with more tax revenue than any other industry in existence. Yes they pay state and national tax, on every single barrel produced.