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There's no valid excuse for
America's
oil problems
Sometimes I wonder whether Congress is playing
pre-election politics or is just plain stupid when it comes to
managing the federal government’s substantial and
untapped oil and gas resources. It’s probably some
combination of the two. Regardless, our lawmakers have no
valid excuse for explaining away the current energy crisis which, for
the first time in hydrocarbon history, has been aggravated by more than
six years of rising oil prices.
Folks, this once great producing country of ours
did not evolve
overnight from a net exporter of oil a hundred or so years ago to
a country that now imports more than half its oil. Whatever
the cause of this inexcusable trap the nation finds itself in,
it certainly isn’t due to a lack of resources that
exist offshore and beneath our own soil.
America’s
abundant resources
According to the Minerals Management Service,
America’s offshore regions alone contain an
estimated 66.6-to 115.13 billion barrels of undiscovered
recoverable oil, for a mean of 85.88 billions barrels of oil.
That’s sufficient to fill Alaska’s Prudhoe Bay, the
largest-ever oil discovery in North America, more than six times based
on Prudhoe Bay’s current recovery rate. As a reminder,
Prudhoe Bay along with other smaller fields on the North
Slope, for years provided around 25% of the U.S. domestic oil supply
and continue to be a major source producing just under one million
barrels of oil per day, second only to the emerging deepwater Gulf of
Mexico. Additionally, MMS estimates in its 2006 resource
assessment that offshore areas of the United
States contain 326.4-to 565.87 trillion cubic feet of
undiscovered
recoverable natural gas, for a mean of 419.88 trillion cubic
feet.
That’s enough to refill Prudhoe Bay’s yet untapped
gas reserves
roughly 15 times. In addition to oil, Prudhoe Bay is the
largest-ever gas discovery in North America.
Study
excludes EOR prospects
Specifically, the MMS hydrocarbon assessment of
America’s offshore areas provides estimates of “the
undiscovered, technically and economically recoverable oil and natural
gas resources located outside of known oil and gas fields on the OCS
(Outer Continental Shelf).” However, the assessment
does not include potentially large quantities of hydrocarbon resources
that could be recovered from known and future fields by enhanced
recovery techniques (EOR), gas in geopressured brines, natural
gas hydrates, or oil and natural gas that may be present in
insufficient quantities or quality (low permeability
“tight” reservoirs) to be produced by conventional
recovery techniques.
As I explained in a previous column, over
the past 100 years nearly 11 trillion barrels of oil have been
discovered worldwide but only 1 trillion barrels actually produced,
leaving on average around 91% of total proven reserves still in the
ground. These numbers were compiled and analyzed by Rafael Sandrea,
president of IPC Petroleum Consultants, Inc., a Tulsa-based
international petroleum consulting firm that specializes in
oil and gas reserves appraisals and risk analysis for international
upstream petroleum investments. He believes that up to 70% of the
average 91% of untapped oil remaining in existing fields worldwide
could be recovered through EOR, including conventional methods such as
water flooding and gas reinjection to newer technologies such as subsea
pumps.
So, EOR on existing fields together with new
offshore fields
would go a long way to solving the oil supply problem in the United
States. At quick glance at the MMS maps of Alaska and the Continental
U.S. reflects the extensive offshore areas thought to contain
significant oil and gas reserves. The mean estimate for all
oil equivalent reserves (oil and gas) on the OTC amounts to a
staggering 115.4 billion barrels. More than 18% of the this oil-gas
“endowment” has already been produced. An
additional 11% is contained within various reserves categories, the
source of near and midterm production. But after more than 50 years of
OCS exploration and development, “70% of the mean
boe (barrels of oil equivalent) total endowment is still represented by
undiscovered resources,” MMS said.
Unfortunately, exploration drilling is banned on
more than 80% of the OCS, due in large part to
Congress’ liberal faction and the
powerful environmental lobby in Washington, D.C. In fact, the
only areas currently open to offshore exploration in the
United States are the Gulf of Mexico and limited areas of Alaska,
including the Beaufort and Chukchi seas and possibly Bristol
Bay.
In addition
to the untapped billions of barrels of
oil and trillions of cubic feet of natural gas thought to exist
offshore U.S., more of the same is believed to exist on federal lands
currently off limits to exploration drilling, in particular
the gas-rich Rocky Mountain region.
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