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Petroleum Resources and the Outer Continental Shelf (OCS)

June 21, 2008

This blog has moved to Wired Science (as of Sept 14, 2010)

URL: http://www.wired.com/wiredscience/clasticdetritus/

RSS: http://www.wired.com/wiredscience/category/clastic-detritus/feed

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UPDATE (3/31/2010): You may have found yourself here today because of the announcement from the Obama administration to open up drilling along parts of the Atlantic coast. The post below is nearly two years old now, but the MMS (Minerals Management Service) 2006 assessment is still the most recent assessment of recoverable resources that I know of. Please point me to a more recent one if you know of one. This announcement will undoubtedly create a lot of discussion so it’s good to be aware of how much resources is estimated to be in these locations.

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UPDATE (7/31/2008): I wrote this post over a month ago and it is still getting a lot of traffic. If you’d like some more recent information please check out this article from the Energy Information Administration. They estimate even less oil than the 2006 MMS report I discuss below. Furthermore, the article estimates the impact on production rates if the OCS resources became available, which is really the crux of the issue  —  total domestic production of crude oil from 2012 to 2030 is projected to be 1.6% higher in this case. There’s a decimal point in there … that’s less than a 2% increase in production.

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As you most certainly are aware, there was a lot of news reports and jibber-jabber this week in the United States about lifting the ban on offshore drilling for oil and gas. A real discussion about this has been going on for years, but this latest flurry to make the news cycle stems from statements by Bush and McCain (along with other Republican lawmakers) that lifting the ban on offshore drilling in national waters would be beneficial for a slumping economy. Essentially, their argument is that gasoline prices will go down if we lift the drilling ban. Another version of the argument is that gasoline prices would not be as high as they are now if we had lifted the ban at some point in the past.

I’ll get to what I think about these arguments later in the post … but first I want to lay out some facts and figures. Knowledge is indeed power and these are great stats to have at your fingertips.

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What is the OCS?

Much of discussion is about the moratorium on drilling for petroleum resources in The Outer Continental Shelf, or the OCS, areas of the United States, which consists of:

…the submerged lands, subsoil, and seabed, lying between the seaward extent of the States’ jurisdiction and the seaward extent of Federal jurisdiction.

The above definition is directly from the Minerals Management Service (MMS) website. The MMS is the primary federal agency responsible for managing the OCS.

Since this is a geology blog, I can’t help but comment … you’ll notice in the map below that, although the OCS name has the term “continental shelf” in it, these regions do not correspond to the actual physiographic/geologic continental shelves (in terms of water depth and type of crust). The OCS boundaries for the rifted Atlantic margin might be close, but the Pacific margin, being all subducty and transformy, generally has very narrow (10s of km) continental shelves. But I digress.

The map above is from a 2006 report by the MMS titled “Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation’s Outer Continental Shelf”, which you can get here. Another area that gets a lot of press in this debate is the Arctic National Wildlife Refuge (ANWR). I’m going to have to tackle that another time … for this post, I will focus on the OCS. Note: Chris over at goodSchist.com has a nice post about ANWR.

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The Ban on Drilling for Oil & Gas in the OCS

When I started researching this post, I realized I didn’t really know the history of the drilling moratorium. Most other developed countries have decided to drill and produce the petroleum resources in their offshore regions, which has led to significant revenue for some (e.g., Norway is one of the richest and most prosperous countries in Europe for a reason).

The United States Congress established a moratorium for drilling the offshore regions (with the exception of parts of the Gulf of Mexico, parts of Alaska’s North Slope, and parts of southern California) in 1981. Although this is referred to all over the place, I could not find the original congressional documents (if you can, please link to in comments below). I also could not find any vintage news reports about what exactly prompted this and why in 1981. Please educate me if you remember (I was playing with Star Wars action figures at the time and not really paying much attention to the Congressional activities).

UPDATE: A fellow blogger kindly looked up some references about the history of the OCS drilling moratorium. Check out these links over at Looking for Detachment.

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How Much Oil Does the OCS Have?

Before talking about whether or not increased oil supply from the OCS and its impact on prices, it’s good to get a handle on just how much oil we can expect to find and produce. Below is Table 1 from the 2006 MMS resource assessment for undiscovered technically recoverable* oil and gas resources in the OCS regions. Reviewing the methods of calculation and determination of resources is way beyond the scope of this post. For the sake of discussion, let’s assume their numbers are correct.

The numbers are divided into oil (in billions of barrels) and natural gas (in trillions of cubic feet). For now, let’s focus on oil – I’ve circled in red the total of all four regions, which comes to 86 billion barrels of oil.

Dang … that is a lot of oil!!

Or, is it? Here’s an ultra-simplified back-of-the-envelope calculation:

> Amount of oil that could be produced from offshore U.S. = 86 billion barrels

> Amount of oil consumed per day in U.S.^ = 20.7 million barrels

> How long it would take that oil to be consumed = 11 years

If you incorporate the low and high estimates, then it would be 9 and 15 years, respectively. For the sake of argument, let’s go ahead and use the “optimistic” estimate that the OCS would give us 15 years worth of oil.

Just think of this as a different unit for oil … the volume unit is put into the context of time. Kind of like putting distance into time with the light-year unit. This doesn’t mean it will actually take 15 years to use it, it’s simply another way to visualize the amount. (Of course, unlike the speed of light, the consumption rate could certainly change, which would affect that calculation.) UPDATE3: Multiple readers/commenters have brought up the point that this ‘oil-years’ unit is misleading … I agree. I certainly don’t want anyone to cite Clastic Detritus as saying X billion barrels would last X years. It’s simply another way to visualize it. One would want to compare other resource assessments like this within that same ‘unit’.

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How Long Until We Can Get That Oil?

Let’s assume the offshore drilling ban was lifted later today … just like that. Would the oil start flowing tomorrow? Of course not.

Firstly, there is currently a five-year backlog for offshore drilling rigs/ships. As other nations such as China and India start developing their offshore resources, the demand for drilling equipment as skyrocketed. Ship builders are answering the call by building more equipment but, as you might guess, building a vessel that can drill in 3,000 m of water and 8,000 m into the subsurface can’t be done on a weekend.

Secondly, drilling an exploration well is but one step in a long process of getting the resource to market. Depending on the depths and other geologic factors, just drilling a hole to test the hypothesis of the presence of oil could take several months. Then, the company, country, or joint-venture needs to decide whether or not to proceed with the project … sometimes they do, sometimes they don’t. If they do decide there’s enough oil to make the project economic then a development plan needs to be hammered out … those other wells need to be drilled. That’s just the drilling … we haven’t even gotten to the actual production facilities yet! You get the picture. Depending on water depths, distance from pipelines, and so on and so forth, getting an oil field online from time of discovery can take anywhere from a few years to more than a decade.

Thirdly, only a handful of fields would come online in, let’s be optimistic, a decade from now (2018). It’s not like those 86 billion barrels are all going to magically be delivered to the refineries all at once. It would take many decades to deliver that resource.

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Commodity Trading and the Price of Oil

Another part of this discussion is the fact that oil is a commodity like any other and is traded on an open market. Fluctuations in price are driven by the interactions of the traders themselves. I would be way out of my bounds if I went any further down this path trying to explain the dynamics of commodities trading. I don’t have a deep understanding of how that all works.

Some argue that lifting the ban will “send a message” to the rest of the world that we are serious about increasing our own domestic supply, which will influence the commodities traders and thus the price. My intuition (for what it’s worth) is that it might drive the price down for a short time. Daily/weekly fluctuations in the price of oil do seem to be influenced by global events, economic announcements, and so on. But, over the long term (months to years), the price seems to be driven by basics of supply and demand.

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Opportunism for Pro-Drilling Advocates

Finally … the op-ed part of the post!

It should be obvious to most, that the politicians who favor offshore petroleum resource development are citing the current high-gasoline-price situation as the main reason for why the drilling ban needs to be lifted. The argument is simple: lift the drilling ban > oil exporation/production occurs > oil supplies increase > gasoline prices go down.

There are several layers of complexity in this issue, but the two aspects that I’ve discussed in this post, the estimated amount of undiscovered oil and the time it would take to get it to market, are not mentioned by these politicians. Reporters, other bloggers, and, even more telling, those that actually work in this industry, have mentioned this:

As politicians debate whether to open federal offshore waters to oil and natural-gas drilling, there is agreement on at least one point: It isn’t a short-term fix.

If the bans were lifted tomorrow, it would be at least seven years — and likely as long as a decade — before the first oil began to flow off the coasts of Florida, California and the eastern seaboard.

“Is it going to happen overnight? No,” said Dan Naatz, vice president of the Independent Petroleum Association of America. “Is it going to solve all of our nation’s energy problems? No.”

That’s a report from The Wall Street Journal quoting the vice president of the Independent Petroleum Association of America (bold emphasis mine). These people actually work in the industry … they know what’s up.

McCain should know better, he should know the realities of the oil and gas industry … instead he’s pandering:

…[McCain] said his proposal would “be very helpful in the short term resolving our energy crisis.”

He’s specifically saying the “short term”. He’s not talking philosophically about energy independence in the 21st century or anything like that. He’s talking about right now. UPDATE: McCain has back-flopped, or flip-tracked, or something … he’s now saying that the short-term benefits of opening up drilling will be “psychological”. Okay, so no immediate economic benefits after all … darn. UPDATE2: U.S. government’s top energy forecaster says allowing drilling “would be a relatively small effect” on prices.

All of the sudden, lifting the ban on offshore drilling is the most important issue of the day for some conservatives (e.g., here). Now, let’s be clear … I’m not saying that allowing development and production of these resources wouldn’t impact our dependence on foreign oil in the long term. It most certainly would. My point is that implying that lifting the ban would somehow magically result in an immediate return to cheap (and sustained) gasoline prices is disingenuous. Moreover, if you do peruse the pro-drilling websites, you probably won’t find much quantification of undiscovered resources … just phrases like “vast amounts” and “a lot”. If long-term prices are indeed driven by supply-demand, to what degree will 15 oil-years affect global supply-demand dynamics?

The debate over whether or not to lift the ban should continue. It is an important debate because it will keep the overarching problem of energy in the forefront. When the drilling moratorium was enacted I presume it was primarily to protect areas from direct impacts of drilling and production  – it was local to regional. Now, superimposed on the direct impacts, is the global problem of eventually burning those hydrocarbons for energy and its subsequent impact on the atmosphere.

My wild speculation prediction is that we will end up opening some areas to drilling over time. It certainly won’t be all at once … it will take decades and be done in a piecemeal fashion. And it’ll probably end up being way offshore to minimize coastal impacts (and the nimby effect). Why do I think this? Two words: dependence and demand. I recommend watching the 2006 documentary film A Crude Awakening. It is mostly about supply issues (i.e., peak oil), which is a topic for another day, but they also effectively communicate our dependence on oil. As we transform the way we power our world and our attitudes towards consumption (which I’m confident we will … because we have to), oil will still be a part of the mix … not the majority even, but a part.

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Resource Nationalism

Finally, underlying all of the facts, figures, and opinions expressed above is the big-picture geopolitical aspects of resource nationalism. Most of the rest of the world’s nations have a state-owned oil company. When citizens of those countries say “our oil” it is an accurate statement. Even though the United States does not have a national oil company, I’m starting to hear people use the phrase “our oil” when discussing resources that happen to be within our borders. Is it not a free market? Can’t any other company, including other nation’s state-owned companies, come in and develop it if they win the bid in the lease sale? If so, can’t they then transport the resource away from the U.S. if they really wanted to? Why does lifting the ban on offshore drilling in the United States equate to more of “our oil”? Would Americans favor nationalization of oil resources if that meant lower prices?

Anyway … I only bring up this last point to stimulate some discussion. I haven’t studied the intricacies of this topic or what the potential ramifications would be in any detail. I just thought it was interesting to see the “our resources” meme spread throughout the commentary this week.

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* “undiscovered technically recoverable resources”, or UTRR, refers to the amount of oil we can extract with current (or very near-future and foreseeable) technologies without taking economic feasibility into account

^ http://www.eia.doe.gov/basics/quickoil.html

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62 Comments leave one →
  1. June 21, 2008 12:03 pm

    I’ll ask someone I know who was working in “MMS” in 1981 or 82 what he remembers, though it will be several days until I can do that. MMS was called “Outer Continental Shelf Leasing” or something like that then; it either wasn’t part of MMS, or MMS hadn’t been formed – all under the Interior Departmet.

    All (or most?) OCS leasing goes through MMS, who decides which bids to accept on the lease areas they put up for bid. I don’t think that the bids always go to the highest bidder, some factor of responsibility and ability of the companies involved (along with other issues?) may come into play – I can check on that, also. It’s possible that MMS might not accept bids or award leases to some foreign companies – don’t really know – but that could be something that they could choose to regulate. Although, regulation like that might not apply once the lease area is drilled and a producing field is discovered or producing wells are put in – possibly a U.S. company could then sell the lease to another company; or a U.S. company could be bought by a foreign company. Will see what my informant has to say about these things.

    Very informative post.

  2. June 21, 2008 2:52 pm

    Silver Fox … thanks, that would be great if your MMS contact could point us to some online resources for the original congressional documents.

  3. June 21, 2008 6:25 pm

    Apparently, MMS was created in 1982 – for some reason, I thought it was later than that. I must be getting senile!

  4. June 22, 2008 5:47 am

    Brian, I posted some links and a bit of history on my blog.

  5. June 22, 2008 8:14 am

    This review is fine, as far as it goes.

    The “oil will only last 11 years” is misleading at best — for the reasons you outline. But it must be emphasized — oil production doesn’t work that way in the real world, at all.

    World oil supply is analogous to a handful of uncooked spaghetti: Each well, or oil field is a source, a strand of spaghetti making up the total supply. Each source has a “flow rate,” barrels per day of production. Add this up over the whole world and you have the 86 million barrels per day or so that is produced.

    This description is important because it reflects reality and it provides a framework for understanding why additional supply sources are important. The time line, from approval to gasoline in your tank, you present is accurate, although, new oilfield technology is shortening the time line in pure technical aspects.

    But here is the kicker: Price is set on the margin, so each additional barrel of oil has a disproportionate impact on price. The sooner the production process starts, the sooner those additional barrels affect price. And that may include even maintaining today’s price.

    Don’t underestimate “supply expectation” psychology. The prospect of new supplies will have an impact as certain as human nature.

    It should also be noted this oil can be produced from “beyond the visual horizon” so there is no “visual blight” and even with hurricanes Katrina and Rita negligible oil entered the environment from Gulf oil production.

    Do people prepare for the future by taking steps today that might not come to fruition until “down the road,” of course they do. America should be no different.

    Open the offshore to oil exploration and production.

    Oil Is Mastery

  6. June 22, 2008 8:40 am

    Anaconda says: “…new oilfield technology is shortening the time line [from discovery to gasoline] in pure technical aspects”

    In what ways?
    It really depends where it is. Some ultra deep-water discoveries are actually taking a lot longer to get to first oil because of the challenges of building sea-floor production facilities (i.e., can’t build a platform in 4,000 m of water).

    Anaconda says: “Don’t underestimate “supply expectation” psychology. The prospect of new supplies will have an impact as certain as human nature.”

    That’s true … but only if the expectation is that the supply is significant. My point here is that it’s not if you look at the data. But, perhaps the general public can be swayed by a politician just saying “a lot”.

  7. DanDeMan permalink
    June 22, 2008 8:53 am

    The below link shows the root cause of restrictive legislation concerning off-shore drilling. The CEO of Union Oil’s foolish comments were a catalyst for the Green movement in this country.

    http://www.latimes.com/news/science/environment/la-santa_barbara1969_oilspill-pg,0,4140637.photogallery

  8. June 22, 2008 11:08 am

    To DanDeMan:
    Yes, you are absolutely right. That oil spill was the catalyst for the ban. This writer reviewed the pictures and accompanying captions (but already knew the history).

    The oil company got a waiver on the length of steel casing, which was designed to prevent just such a blowout. And this was done in the face of a known high pressure petroleum deposit. Dumb move by the oil company for sure. That kind of error in judgment has not happened since in the Gulf of Mexico.

    Also, another storm wracked sea, is the North Sea, where oil has been produced for decades. While there have been some accidents, overall the Europeans seem quite happy with the safety record and the oil produced.

    But the key is the spill was forty years ago. Safety technology has advanced by leaps and bounds.

    BrianR: Multiple tasking, being able to do two procedures at once. The reason for the speed is that day-rates for drill rigs go at half a million dollars a day, so everybody has an incentive to produce quickly, and as far as this writer knows — it has not compromised safety — remember the oil comapaies, both for political and economic reasons don’t want a well failure (spill).

    True, there are challenges on the technical front. But isn’t that what technological advance is all about: Overcoming obstacles?

    It should be mentioned that once on line this oil would be producing for decades, as indeed, North Sea oil has been.

    Check out the website, Oil Is Mastery

  9. June 22, 2008 11:22 am

    Anaconda says: “The reason for the speed is that day-rates for drill rigs go at half a million dollars a day, so everybody has an incentive to produce quickly”

    Drill rigs are used for just that, drilling the well … the production facility is completely different. Once the well is drilled, the drill rig/ship moves on to the next job. They’ll “shut the well in” after testing it until the production facility is built/installed. But yes, they typically will try and design and start construction of production facility while still drilling the wells.

    Anaconda says: “True, there are challenges on the technical front. But isn’t that what technological advance is all about: Overcoming obstacles?”

    Exactly. That’s why I’m excited and optimistic about non-oil energy for the future … it’s an exciting time in this burgeoning field. Huge breakthroughs are still to come! Maybe is oil is mastery, but it’s not our future.

  10. June 22, 2008 11:22 am

    DanDeMan … thanks for the link! It is good to have that historical perspective.

  11. June 22, 2008 11:33 am

    Should have got this in above.
    To BrianR: Your quote: “My point here is that it’s not if you look at the data.” What data? The data is limited because without the prospect of exploration and production no one has taken a close look.

    The post cites 85 billion barrels, that’s a conservative estimate(because nobody has taken a close look), that’s nothing to sneeze at. So, unless you have data, this writer disagrees with your quote.

    So what are you saying, Brian? That because we don’t know exactly how much is there, then we shouldn’t look at all? If there isn’t enough in any particular spot to make it economically viable, then no drilling will occur. But if there is enough that “somebody” wants to produce it, why should that be prevented?

    Brian, this writer has reviewed what data is availble, while it’s true the 85 billion barrels is a guesstimate, the overall geological profile of, say, the Carolina Trough is suggestive of large oil deposits. California, again, while details are sparse, has indicia — geological telltale signs like oil seeps, oil onshore, and geological formations like in the post above, that all point to significant oil offshore of California — if you disagree, fine, present your data.

    But “not looking because we don’t know,” simply isn’t a plausible reason for not exploring and producing oil if economically viable amounts of oil are available offshore.

  12. June 22, 2008 12:05 pm

    Anaconda … click on the link to the 2006 MMS resource assessment. In that report you can dive into the details and references therein for the estimate.

    They don’t pull these numbers out of thin air. How can you say “nobody has taken a close look”? If you don’t agree w/ the estimate (seems like you think there’s a lot more … 10% more? 50% more? 500% more?) then you’ll need to find another assessment or do one yourself. Quantify it.

    Again … read the report. The summary is short, but you can spend weeks getting into the details.

    Anaconda says: “geological telltale signs … all point to significant oil offshore of California”

    And? You say “significant” … this means little. Quantify it. Look at the table I include above from the MMS report, it estimates >10 billion bbls (undiscovered) for the Pacific OCS. The question then is if you (1) think it’s a lot more than 10 billion and, if so, how much more and based on what, and/or (2) you are saying the MMS’s estimate of 10 billion bbls is “significant”.

  13. June 22, 2008 12:28 pm

    Anaconda, the “data” above is from MMS. The number is 86. You are citing nothing in saying “nobody [besides MMS?] has taken a close look.” Very possibly a number of oil-company geologists have taken a close look – their estimates and exploration ideas are not available.

    IMO, this post doesn’t read as an argument against drilling or production, just against political posturing – hey, Bush maintained the OCS ban only two years ago – suddenly being for it is bulllshit! The above post as I read it is about realism, because there really are some people (non-geologists and non-explorationists) who don’t know what it takes or how long it can take to get things into production. And this post will provide information to people who otherwise only see the news. It’s not just the “Geoblogoshpere” reading these blogs.

    Most geologists know or understand that MMS’s number of 86 is a preliminary sort of number, an estimate: in mining it might be called a “geologic resource” – though becuase it’s not based on economic feasibilities and is an estimate of undiscovered resources, it is probably more preliminary than that. The actual amount of oil in the OCS could be lower than their estimate(probably not 10x lower, IMOH); the actual number could be higher (could it be as much as 10x higher?). Who knows? The USGS was WAY wrong in the 70′s with their estimate of no oil any day now (back then).

    Brian, possibly I’ve mis-interpreted or mis-represented some of your points.

  14. June 22, 2008 1:12 pm

    BrianR:
    With all due respect, 66.6 to 115.3 billion barrels of oil is a wide swing in anybody’s book. You might ask why it’s such a wide swing?

    Because they haven’t taken a close look, as this writer indicated.

    Silver Fox, it’s expensive to do seismic expeditions — oil companies don’t waste their money where it does not good. So, no there aren’t any “supersecret estimates” lying around.

    There are no oil leases in the Carolina Trough — no oil companies have done advanced seismic studies on the Carolina Trough.

    The U.S. Geological Survey did do one in the early 1990′s looking at the methanehydrates and in the process commented on the strong indicia of oil deposits — that’s not a detailed look.

    As general practice, if you have limited information about any subject, and are asked to predict, what will happen, what is there, or how much is there, the correct procedure is to give a conservative number. That’s why this writer indcated 85 billion is a conservative number. but one is hard pressed to guess how much of a “low ball” number.

    But again, just taking the average 85 billion barrels of oil that was estimated, that’s a lot of oil.

    If this is about objecting to politicians posturing — okay, this writer get that. So, have the Democrats change their posturing policy and let’s start exploring, now!

    Because Americans want to explore for offshore oil now, one recent poll shows 76% of Americans want to explore for offshore oil.

    Is this not a democracy?

    Of course, it is — so let’s get off the dime and start the process for oil exploration.

    By the way, this writer supports ‘alternative’ energy sources, but a healthy economy will produce more investment, research & development than an ailing economy.

    Don’t worry Brian — prices for oil aren’t dropping below $100 a barrel anytime soon, anything above that floor will spur ‘alternative’ energy development.

    That’s a good thing.

  15. June 22, 2008 5:07 pm

    An excellent blog. A lot of timely information and hopefully thoughtful thoughts will be thought about the need to begin to resolve our energy crisis. Our politicians have had there say and now it is time for us to be heard.

    Best Blogs

  16. PepeLegal permalink
    June 23, 2008 4:45 am

    Brian,

    Excellent post. I intend to comment on your post in more detail later on. For now, let me make two(not so)short comments.
    First, about your remarks on national oil companies and the meaning of the “our oil” expression. Do you really think that having a national oil company makes the oil belong to a certain nation? Nigeria can have as many “national oil companies” as they want and I will always doubt if the oil is really “theirs”. The US is the most powerful nation in the world. The military, the technology, the dynamics of your economy is what makes your oil (and somebody else’s oil too…) yours, not the fact of having or not having a national oil company. You make about 5% of the world population and yet consume 25% of the world’s oil production (and let us not talk about coal and natural gas…).
    Second, look at Brazil to see how you can shorten the discovery/production cycle offshore, even in deep or ultra-deep waters. Furthermore, Brazil has recently made HUGE discoveries in the pre-salt section in ultra deep waters of the Santos Basin. I don’t know much about the geology of your eastern Atlantic Passive Margin Basins and I am always apalled on the scarcety of easily available data on these basins, but I guess that the ~4 billion barrel figure for undiscoverd recoverable oil in the Atlantic “OCS” may be grossly underestimated. Generally, I am not adept to conspiracy theories, but I think this underestimation is not without a reason…

  17. June 23, 2008 6:51 am

    PepeLegal,

    To your points:

    (1) Fair enough. But, a country could, if they wanted, say “we don’t want to sell our oil to so-and-so”. I’m not sure why they would, if they have a buyer as thirsty as the United States, why not sell it to them. But … they could. But, your point well taken … the dynamics of all that is complex.

    (2) I have not studied the Atlantic margin of the U.S. in any great detail. When I find some time, I will try and do some digging around. Several components need to come together for a petroleum system (w/ significant quantities) to develop. The figures for the Atlantic OCS could very well be an underestimation … it would take a bit more research on my part to understand why (i.e., as a scientist I get uncomfortable speculating too much). As for some diabolical scheme to purposefully under-report the reserves … I don’t buy it. Assuming conspiracy as the default position is dangerous in my opinion.

    (Note to everyone: In an effort to keep this post and this blog scientific, I have no problem moderating comments to keep wild speculation about conspiracy theories out of the discussion. If I delete your comment and you are offended, tough beans. There are plenty of blogs that discuss those topics in great detail.)

  18. June 26, 2008 5:41 am

    Brian, the thing is – the “undiscovered recoverable resources” aren’t reserves; those resources have not been discovered, yet. There hasn’t been a well drilled in the Atlantic in numerous years because of the OCS moratoriums and bans. What MMS is calculating is not a calculation of an oil reserve. A resource estimate is based on known geology, any existing geophysical data, and on existing wells if there are any. A reserve is an economic calculation based on drilling and the economics of production of an area.

    So, if MMS estimates undiscovered recoverable resources and it turns out they are way wrong, it would be just because they don’t currently have enough drilling information (and geophysical in many cases) to accurately predict what will actually be found if any real exploration is ever done. It would not be because they are trying purposely to hide or misrepresent anything.

    I might be able to describe the process they use to estimate undiscovered (and recoverable) resources.

    Btw, in the mineral exploration industry, no one ever estimates undiscovered resources except in a very limited way. No one will tell you how much undiscovered gold exists on the Carlin Trend, for example, because it hasn’t been discovered. I find it odd to even think about that kind of “resource” – one that doesn’t have a single drill hole in it. I can estimate what could possibly exist as a maximum in a given area based on say, generous vein width, generous vein extent, generous actual mining depth, say 1 ounce per ton gold, multiply by some generous recovery percent — if that number is small enough, I will not go any farther with exploration and will not recommend drilling. I would not call that a gold resource, even if I factor in a lower number, because there might not be any gold there at all. That is really the kind of thing MMS does when it comes up with it’s undiscoverd numbers. They are just that — undiscovered.

  19. June 26, 2008 6:32 am

    Silver Fox,
    Good points … always good to remember what we are talking about here.

    Here are some definitions from the USGS:

    In-place resources: Volume of petroleum contained in accumulations of at least 50 MMBOE, without regard to recoverability.

    Technically recoverable resources: Volume of petroleum representing that proportion of assessed in-place resources that may be recoverable using current recovery technology, without regard to cost.

    Economically recoverable resources: Volume of technically recoverable petroleum for which the costs of discovery, development, production, and transport, including a return to capital, can be recovered at a given market price.

    As you point out, reserves are indeed different from resources. Reserves have their own categories of ‘possible’, ‘probable’, and ‘proven’.

    That said … even though this assessment is not reporting reserves, it’s all we got for forecasting.

  20. June 26, 2008 2:06 pm

    Silver Fox … I think I corrected all the places I said “reserves” above when I should’ve said “resources” … thanks much … who says the blogosphere doesn’t have peer review! :)

  21. June 26, 2008 3:46 pm

    I think that somewhere in all these pages we have a short course about economic geology! ;)

  22. June 29, 2008 2:08 am

    Great article and very informative. Now I know why you have a Ph.D. and I do not. Well done, good and faithful sedimentary geologist! mc

    Best Blogs

  23. Wm Feathergail Wilson permalink
    June 30, 2008 7:48 am

    I am a retired or semi-retired exploration geologist. I was involved in geophysical and geological exploration of ANWR. I was involved with offshore exploration in the Gulf of Mexico, Florida, California and the East Coast, as a line geologist and a coprorate officer. In my opinion the MMS and the Bush Adminstration estimates are inflated. The time frame to explore, produce and transport any discovery could be 10-25 years out, depending upon the location. Yes, NOC’s can bid on the OCS lease blocks either as partners or not.

  24. June 30, 2008 8:00 am

    Wm … thanks for taking time to comment.

    It’s important to hear from those that have both the expertise as well as first-hand experience. I’m trying to piece together what I can from these reports, you’re comment and perspective adds more value to this discussion.

    From your perspective, what are good references (publicly available) for Atlantic OCS geology within the context of these resource assessments?

  25. June 30, 2008 1:15 pm

    Ok…here I sit with a petroleum geology and exploration degree from “The World’s First Petroleum Geology School”, the University of Oklahoma not exploring for oil and gas since in the early 1980′s the oil and gas industry went into a depression….geologists…geophysicists…petroleum engineers..coulnd not find substantial employment let alone a career..and we now have a world wide crisis at $140US a bbl..no wonder we have a shortage of technical scientists, engineers, on site drilling crews, and face this hardship.

  26. June 30, 2008 1:33 pm

    Niles … that “gap” is very apparent. The age distributions of oil company geologists show a peak in their 50s to early 60s and then a younger group (<35 yrs old) … when the “boomers” retire, there will be even more issues w/r/t to technical knowledge and experience.

    I’ve heard the “gap” is primarily a function of the ’86 crash … maybe you have some thoughts on that.

  27. July 5, 2008 3:01 pm

    Brian,

    The way I see it, is that states should have the right to determine who drills immediately off their coasts (up to the 3 mile(?) economic limit) – The areas beyond that fall into federal jurisdiction should therefore be under the MMS. However, that is a political digression, but it would allow persons of interest to get their say.

    I do find your 11 years of oil supply though, to be a little misleading. It would in all likely hood be about 80-100 years of production that incrementally provides some of our energy needs. What I mean by this is that we would probably only see ~2-3 MMBOPD at the most, which means we’d only get out about 1 billion barrels a year (and I’m betting that is on the high side). Hence 80 or more years of supply (to the market).

    This could have a significant effect on price though. If we continue to have tight supply markets, and extra 2 MMBOPD would be huge – it would probably lower prices by 25% or more.

    The rate of alternative energy growth will hopefully create demand destruction for fossil fuels and lead to lower energy… but, if not, and if supply is 20-25 years away, we should get the cogs turning sooner rather than later.

  28. July 5, 2008 7:04 pm

    Cam … you are definitely right … the ‘oil-years’ calculation is misleading. The best thing to do would be put other resource assessments into the same ‘oil-year’ unit and compare apples to apples. If so, then 11 ‘oil-years’ might prove to be a lot.’

    However, my main thoughts regarding the politicization and opportunism are still valid in my opinion. The 2-3 MMBPOD wouldn’t happen for a decade. Again … I’m not arguing it wouldn’t later, but saying it will help this summer is malarkey.

    Cam says: “If we continue to have tight supply markets, and extra 2 MMBOPD would be huge – it would probably lower prices by 25% or more.”

    If this all plays out over 80 years though … might growing non-U.S. demand trump that 25% decrease in price estimate? Additionally, 25% lower than what? I suppose a decrease is a decrease however you cut it.

  29. July 6, 2008 5:35 pm

    Brian,

    It’s probably more like 20 years out until we see substantial production… I would bet the first permits won’t be issue for 2-3 years at best, then take another 1-2 years to get the seismic crews out there and the data processed… then 1-2 years for the initial geo-work to be doneand you’ve got 4-7 years before the first location get’s approved by management… I would even bet on my time line being accelerated. Then you take the normal amount of time it takes to lay pipelines and build the infrastructure to get the oil and gas onshore, an you’ve just tacked on another decade.

    I only advocate opening it up because I don’t think the rate of technological change in alternative fuels to be great enough close the gap that will arise in production.

    However, it’s also likely that those wells will never be drilled at all. Consider a scenario where Iraq and Nigeria stabilize, and return to strong output, Iran drops their nuclear ambitions, sanctions are lifted and they increase their capacity, and some moderate demand destruction until that happens, and we are back to the 1990′s in terms of price. [in this scenario, I also win the lottery so I don't have to find another job after I get laid off]

  30. July 7, 2008 9:22 pm

    This country is like a frazzled junkie down on his knees, begging his dealer for just one more fix.

    Oil is not mastery, it is slavery, pure and simple. For anyone with eyes, and who does not have a vested economic interest in oil production (as opposed to energy production), this is self-evident.

    No matter how much oil is or is not located in the OCS, it runs out. It may be 20 years, it may be 50 years. For geologists, used to measuring time in millions of years, this is, frankly, somewhat less than the blink of an eye.

    Today the price of a barrel of oil fluctuated nearly five dollars merely based on the changing prediction of the storm track of an Atlantic hurricane. The panicked markets have given new meaning to the word “unstable”, and a few million more barrels a day would not somehow magically change that.

    The one thing that COULD demonstrably change the equation and move
    us closer to energy independence is conservation and efficiency. Good estimates show an immediate, significant effect on the demand side, thereby affecting the supply equation. The equivalent of discovering an oil well in your backyard.

    If all the oil in the ground was somehow pumped to the surface tomorrow, and prices plummeted accordingly, everyone would breathe a huge sigh of relief and go on with their normal lives. Then, one day, the oil would really be gone. And once again we would be shocked, and begging our “dealer” for just one more fix.

  31. Payam permalink
    July 14, 2008 7:19 am

    “15 years worth of oil” is deceiving. That’s assuming 100% of the oil being consumed in the US is coming from the OCS. If the US were to produce 6 million bpd from the OCS it would cut oil exports by half and contribute over $300 billion to the US economy every year FOR 40 YEARS (that’s a total of $12 trillion!), instead of shipping it overseas.

    Secondly, this isn’t Saudi Arabia, Iran, or China where the oil companies are owned by the government and it would require government funds to extract the oil. This is America where the private sector will do all of the work and it wouldn’t cost the tax payers a cent. All the tyrannical environmentalist-hijacked government has to do is get out of the way.

    Any moron can see that the US government’s ban on that oil is completely illogical, which is why the US is the ONLY country in the world that has bans on such massive oil reserves (equivalent to Venezuela’s entire reserves or a third of Saudi Arabia’s). Too bad the US government is a puppet of the demented environmentalist cult. They’re really undermining this country’s security and economy.

  32. July 14, 2008 8:34 am

    Payam … I noted that putting into those terms was misleading in the update above.

    “If the US were to produce 6 million bpd from the OCS…”

    Where does the 6 MMBPOD estimate come from? … I’d like to see that report.

  33. July 14, 2008 8:41 am

    Payam says: “This is America where the private sector will do all of the work and it wouldn’t cost the tax payers a cent.”

    Would you propose letting only American companies being able to obtain OCS leases? Would you shut it down to other NOCs? Would you stipulate that any OCS-produced oil MUST be delivered to U.S. refineries?

  34. July 14, 2008 1:02 pm

    Brian,

    As a kind of an aside, you said “…when the “boomers” retire…”!

    Are we really going to retire? I’ve heard that collectively we haven’t saved enough money to retire. ;)

  35. Payam permalink
    July 15, 2008 6:31 am

    The 6 million bpd was just an example of how a substantial amount of oil could be produced for a long period of time. Enough time for America to develop its solar, wind, and hydrogen infrastructure. I’m actually very excited about the nano solar cells that are going to come out in the next 10 years.

    Yes, I think all those hypothetical provisions you gave make sense. I certainly wouldn’t want state owned companies of any kind (oil or otherwise) to have any activities in the US.

    The point is that nothing can be stupider than just letting the oil sit there doing nothing while there’s an energy crisis. And since the American government is the ONLY government in the world that has such ridiculous bans on developing such massive quantities of oil, I have come to the conclusion that it’s not stupidity, but treason. The liberal politicians are puppets of the environmentalist cult and are undermining this country.

  36. July 15, 2008 6:39 am

    Payam … are you then for nationalizing the resources within our borders? Maybe not going as far as creating a national oil company, but regulating to such a degree that only certain companies can participate in the lease sale? There are already NOCs participating as partners w/ multinationals in the Gulf of Mexico … do you deem those partnerships illegal?

  37. Payam permalink
    July 16, 2008 6:13 am

    Nationalize means government ownership and I’m not for nationalizing anything. Not allowing foreign governments to control American resources is an issue of sovereignty and national security. Can you give me examples of NOCs extracting American resources from the Gulf of Mexico?

    Secondly, you’re changing the subject of my original post, which had to do with the insanity of leaving those resources untouched and the treacherous nature of the liberal politicians undermining this country’s interests. Stop changing the subject.

  38. July 16, 2008 6:45 am

    Hopefully me answering your direct questions is not changing the subject.

    Payam says: “Not allowing foreign governments to control American resources is an issue of sovereignty and national security”

    I understand that … read my words above. I didn’t say “control”, I said “participating as partners”. There is a HUGE difference.

    Payam asks: “Can you give me examples of NOCs extracting American resources from the Gulf of Mexico?”

    To reiterate, I’m talking about partnerships. Columbia’s state-owned Ecopetrol has a 25% interest (along w/ Shell and others) in Garden Banks area of GoM. As of 2006, Petrobras’, Brazil’s state-owned company, GoM portfolio had 320 leases (operating 170), 6 producing fields, and 3 discoveries under development. There are some other examples as well if you poke around. Granted, these aren’t the big NOCs like Saudi Aramco, Gazprom, or PDV. And IOCs do business with NOCs around the world. Joint ventures are crucial for mitigating risk of these huge projects. Would you want to make it illegal for American companies to seek partnerships with NOCs when they are developing resources in the OCS? American companies have developed a great relationship w/ the Angolan state-owned company for offshore west Africa … what if they wanted to get in on 10% of a GoM prospect?

    Payam says: “Secondly, you’re changing the subject of my original post, which had to do with the insanity of leaving those resources untouched and the treacherous nature of the liberal politicians undermining this country’s interests. Stop changing the subject.”

    I apologize, I was simply responding to details of your comments for clarification. You can ignore my questions above if you like.

  39. Glenroy permalink
    July 17, 2008 6:29 am

    We need to drill and we need to drill before the economy is ruined…

  40. July 17, 2008 6:39 am

    Glenroy says: “We need to drill and we need to drill before the economy is ruined…”

    Do you think that getting the prospects that are ready to drill in the queue (5-7 year backlog for rigs) today will really save the economy?

    I’m not necessarily saying we shouldn’t do it or that it wouldn’t have SOME economic benefit, but this notion that it’s the end-all-be-all savior to our economy is hyperbole.

  41. OscarR permalink
    July 22, 2008 5:59 am

    Since my livelyhood is dependent upon oil and gas exploration, I say drill here and drill now. That being said, everyone knows that opening up the OCS will not solve our energy crisis. We need a combination of conservation, alternative energy, and a serious look at domestic oil and gas production.

    Destin Dome is one example of a place where lifting the moratorium could have an impact in the near term. The discovery has already been made and it lies relatively close to existing infrastucture. The state of Florida blocked the development. Since the discovery is predominantly natural gas, the chance of a spill is minimal.

    We need to end the stupid energy politics and focus on smart energy policy. One of Bush’s tax credits was for vehicles weighing over 6000 lbs. Does anyone think that was a smart policy now? Wind and solar are starting to make sense but we need a concerted effort to curb demand. Oil and gas are going to be with us for a long time since we also generate plastics and fertilizer from them. Also, using food as fuel is nuts.

  42. July 22, 2008 6:29 am

    Oscar … I agree with you … it is indeed time to start talking about energy in a smart way. It’s time to call out both Republicans and Democrats on stupid policy. I think we’ll end up adding domestic oil/gas resources to the mix and it should be done smartly (like your example above). But, it should be clear that it is simply part of the mix … this doesn’t mean we don’t vigorously pursue non-hydrocarbon energy. As usual, the debate seems to be collapsing into opposing dichotomies. Thanks for your comment.

  43. lewdis permalink
    August 4, 2008 10:44 pm

    I have intentionally not read any of the above reply’s, to give mine without rancor or slanting (except my own). I believe that the reason we are even having this debate now is because we have unnecessarily limited ourselves for aprox. 29 yrs. So it is all well and good to question the motive of today’s politicians, but it is important to note that we would not be in this position if the politicians of yesteryear had understood and moved on energy policy. Is this a left or right issue? I am not sure. I (to be sure lean right), but that does not mean that I am insensitive to the environmental impact of what is being discussed. One of the travesties of this current debate is an unwillingness (I think, on both sides of the aisle) to acknowledge that something must be done, and should have been done over twenty years ago. All of the points made above, while valid, disregard the fact that if we had moved twenty years ago, we would not be in this position. Or if we were in this position, it would be for different reasons.

    I did not once see above in the article any mention of refining capacity which is, and has been the number 1 limiting factor in gasoline production in this country (besides boutique blends allowed by the EPA).

    Two things should happen first (in my opinion)… the EPA should be empowered to establish one “blend” of gasoline that is binding on all of the states of this union, and number two, NIMBY should be dealt with directly. Refining of fossil fuels is a fact of life, and not all of us are blessed with being far removed from where OIL is deposited when it is delivered. Conclusion? Some of us are going to end up by refineries as I did as a child. DEAL WITH IT. Alternative fuels will come along as technology and markets allow. Too bad if you are in the way. (Some of us have already been there.) The greater good is served by increased refinery capacity.

    All right, I still have not read a work, but I have book marked this. Flame away. I look forward to seeing anyone who has a well reasoned response that is not simply a knee-jerk one.

  44. August 5, 2008 6:30 am

    lewdis says: “All of the points made above, while valid, disregard the fact that if we had moved twenty years ago, we would not be in this position. Or if we were in this position, it would be for different reasons.”

    That’s a valid point and I certainly agree, but I guess it depends on your definition of “moving” on the problem.

    You ask whether it’s a right/left issue … I would contend that the Republicans are making it one. There is so much hyperbole surrounding this ‘Drill Here, Drill Now’ stuff (and the political theatrics in Washington) … as if it will actually solve anything. Read the Bush Admin report I link to at the very top of the post. An additional 2% of production by 2030 (and that’s not even taking into account the refining capacity problem that you mention). Two percent!! It doesn’t matter … people need to get it though their heads. Obama has communicated that he would vote yes on a bill that allows drilling if that’s what it takes to compromise on moving ahead. In other words, he’s not against it. In fact, if I were him, I would just say “go for it … drill!” … okay, now what? Oh yeah, the problem still exists. The drill-here-drill-now brouhaha masks a much bigger problem … bottom line: domestic drilling will NOT lower gas prices (maybe a short-term blip). Every serious economic and energy industry analyst knows this.

    I apologize that I didn’t cover every nuance and complexity of this issue in the post above to your satisfaction … in fact, I barely scratched the surface. Thanks for bringing up the other issues.

  45. ddoss permalink
    August 5, 2008 7:02 am

    I have a couple questions. Say we drill and find the 86 billion barrels of oil or more, well will this oil be exclusively for America? Can we say as Americans that even though we have been taking resources from other countries for our entire existence we should not export our resources to them? Then, if we do choose to export this oil to China, India, and the rest of the world, (which will continue to have an ever increasing demand for oil) how much will these 86 billion barrels really affect the price? If we choose to hoard the oil will this not intern effect the amount of oil we import?
    I am not an expert on this stuff but I feel like if it is going to have minimal effect on the prices, and that effect won’t take place for 10-20 years, why don’t we switch the focus to hardcore research and funding for alternate energies, so when the oil does in fact run out we aren’t scrambling for answers. If we have the technologies to get oil from the bottom of the ocean to the pump in a year, what is the hold up on biodiesel and switchgrass?

  46. August 5, 2008 8:50 am

    ddoss says: “I am not an expert on this stuff but I feel like if it is going to have minimal effect on the prices, and that effect won’t take place for 10-20 years…”

    Experts agree with your feeling based on real analysis.

    ddoss says: “Say we drill and find the 86 billion barrels of oil or more, well will this oil be exclusively for America?”

    That is a good point … the “our oil” rhetoric as increased significantly, and I’m not exactly sure what that means. Surely it’s not for nationlizing our resources, but it’s difficult to get a straight answer out of such a complex issue.

  47. win permalink
    August 6, 2008 5:06 pm

    I’m not an expert, but interested.

    The bill from this year that I read would have required the oil to be for the use of the US only. We are an oil importing nation, and we currently use most of the oil produced here. Exceptions are the oil we export to Canada from Alaska in areas where it is more economically feasible for it to be delivered from Canada. As well some state owned oil companies (Venazuala for example) has some of our oil leases, the export some of the oil they drill to their nation.

    Since one argument for the high price of oil now is the instability in areas where drilling occurs, drilling offshore here (presumed a more politically stable envioronment) may help to some extent along with the increase in expected future supply. It seems that oil production is actually in decline in many areas, US, Mexico, that along with increased demand on the world market has contributed to a higher price.

    Offshore drilling, possibly drilling in other some areas of ANWR, and conservation along with alternative energy growth seems to be the best long term solution.

    One thing I remember on the moratorium, when it was enacted, the idea was that it would be looked at in the future, and as it became technically feasible to do it in a more enviornmentally safe way it would be done. I forget the details, but I do remember reading that, perhaps in the Congressional Reports or news articles.

  48. August 7, 2008 6:13 am

    win says: “Offshore drilling, possibly drilling in other some areas of ANWR, and conservation along with alternative energy growth seems to be the best long term solution.”

    I certainly agree that we ought to do many things at once (there’s no single magic solution), but by putting ‘drilling’ first on your list implies that it is a big contributor to the solution. While it may be a contributor, it’s certainly not the most important when you do the numbers. It seems now it’s simply the path of least resistance … doesn’t require us to change our attitudes or behavior about energy sources and consumption. In other words, I wouldn’t necessarily take it off the list of ‘things to do’, but I wouldn’t put it up top.

    The term “drilling” or “offshore drilling”, as its used right now in summer 2008, equates to increasing domestic production by <5% by 2030 … whenever you hear someone say ‘we need to drill now’, you should really hear ‘we need to increase domestic production by <5% by 2030 now’. Doesn’t sound so good anymore, does it?

  49. WillyT permalink
    August 8, 2008 11:03 am

    Economically the impact of such drilling would extend further than just the price at the pump. Employment and investment would rise as a result of lifting the moratorium. In the long term, it could reduced our much maligned trade deficit and help curb the influence of the Middle East on global politics.

    If the ~2mb/d figure quoted by cam is correct that represents a significant percentage of the daily production of countries such as Iran and Venezuela. I would assume that if hurricanes and Iran’s sabre-rattling inflate oil prices, giving the oil industry access to the OCS could apply just as much downward pressure on commodity prices. The current energy crisis is not a product of current supply and demand factors as much as it is a product of concern for future supply shocks. So yes doing something now to to increase production in the next few decades sounds like a good idea.

    True something needs to be done to change our attitudes on our use of fossil fuels, but ending this moratorium is an immediate step we can take.

  50. August 8, 2008 12:19 pm

    WillyT … but is an additional 2 million barrels/day a reasonable estimate? Perhaps if oil shale is included (that’s another story), but I can’t find any estimate of the OCS that is projected to create a 2 million barrel/day increase in domestic production. If somebody has that reference and a link to it, please share.

    WillyT says: “The current energy crisis is not a product of current supply and demand factors as much as it is a product of concern for future supply shocks.”

    I guess I would put it under a broader umbrella of supply-and-demand, but, you make a great point, it’s a lot more complex than just saying supply and demand. Unfortunately, I don’t think collective America is good at talking about and dealing w/ complexity, nuance, and multi-factor problems/solutions.

  51. Ian permalink
    August 13, 2008 8:27 am

    Why have the areas of the OCS presently open for the issuance ofdrilling licenses been thus far ignored by oil companies?

  52. Jeff permalink
    September 4, 2008 2:33 pm

    Informative post, (for the most part) good intellectual discussion following it. Maybe some of the experts can help with a few of my questions…

    1) The discussion continues around ‘if’ we should drill & extract the oil, which seems to ignore that we have drilled and are actively extracting the oil. Gulf of Mexico OCS (according to the chart) has more than half of the reserves, and last I heard we are already benefiting from this. So, this whole discussion seems to be revolving around the other (potential) half of the oil. Question: Are we already indeed sucking oil from OCS, or is that whole report about stuff we have not tapped?

    2) Seems ironic to me that even as we discuss this we continue to buy expensive oil to top off our strategic reserves, right? So, while we have not been sucking more of the oil ‘potentially available’ to us we have been tucking oil because we recognize the wisdom of having a reserve in the first place. Way I see it, we are already drinking from our reserve. I can see the wisdom of planning and executing to enable access to more if needed – for strategic needs. I would not agree that tapping this reserve to feed our addiction and/or keep prices down for this generation is strategic. Question – do we need a reserve, and if so, why are we already planning to use it up?

    3) I thought Reagan was running the show when we stopped drilling in 1981. Before Payman’s July 15 post I had never heard of Mr. Reagan referred to as a ‘liberal politician puppet of the environmentalists cult’. Question: Is he really a liberal???

  53. September 4, 2008 5:36 pm

    Jeff … thanks for coming by. This post is rather old and the commenting died down a while ago. So, I’m not sure who else is ‘listening’ anymore.

    I’ll try to answer your questions the best I can.

    Jeff says: “Gulf of Mexico OCS (according to the chart) has more than half of the reserves, and last I heard we are already benefiting from this.”

    That’s true, there is a lot of production coming out of the GoM. The numbers in the chart are for ‘undiscovered resources’. What’s already in production or currently under development for future production would be put in a different category of either ‘probable reserves’ or ‘proven reserves’. So, I believe those numbers are not in that chart.

    Jeff says: “Are we already indeed sucking oil from OCS, or is that whole report about stuff we have not tapped?”

    The latter. As mentioned above, that particular report is about undiscovered resources.

    Jeff says: “…do we need a [strategic petroleum] reserve, and if so, why are we already planning to use it up?”

    I honestly don’t know much about the SPR (Strategic Petroleum Reserve). The DOE has a good web page about it, but I don’t know of any other more in-depth articles about the SPR w/in the context of this current discussion off the top of my head.

    Jeff says: “I thought Reagan was running the show when we stopped drilling in 1981.”

    Not only that, but George H.W. Bush extended the moratorium during his term. Personally, it’s difficult for me to take the ‘liberal environmentalist cult’ comments from commenters like Payman very seriously.

    Hope that helped.

  54. Jim permalink
    December 2, 2008 4:54 pm

    Brian–again a terrific blog(if one is a geology geek).

    I voted for McCain,, but when he came out for OCS drilling I was so mad, I almost sat out the election.

    Shell and BP, both foreign, are active in the US portion of the Gulf of Mexico.(FORBES, 11/24/08) BP’s Thunder Horse play opened in June and cost an estimated $8.3 billion. Shell’s deeper-water Perdido field is just getting started, with an estimated $6.7 billion to be spent before a drop of oil is produced.

    We are in a crisis, and numbers like those indicate that the cost of deep-water extraction is prohibitive on a large scale.

    Jim

  55. William Ess permalink
    April 13, 2009 7:57 am

    I have read a lot of the posts and I agree with the ones who want to drill now. Let’s face it, God made the earth and all the elements inside it. He put it here for mankind’s use. With thoughtful technologies and administrating of these methods, we can use our God-given resources. Don’t be bullied or buffooned by the so-called “green” groups or the global warming myth that has ascerbated many of their arguments. Biofuels use up corn and other veggies that raise the price of items that are grown to be eaten, not burned. Some of you bloggers have arguments, but they are only arguments. Get the facts!

  56. April 13, 2009 8:11 am

    William Ess says: “Some of you bloggers have arguments, but they are only arguments. Get the facts!”

    While I certainly editorialize toward the end of the post, the first part is chock full of facts from the MMS. Do you dispute them?

    Don’t turn this into a false dichotomy … drilling for oil domestically WILL NOT be a cure-all for energy issues. If you disagree, then give me the facts you are proclaiming I should get. Since you have the facts, provide me those facts — if there isn’t a link, then provide the full citation for the study/report you are getting your numbers from.

    And, those who think we never should drill domestically are also missing the big picture. It will happen eventually, so we ought to think about it now and be smart about it.

  57. Chelsea Smith permalink
    March 2, 2010 1:02 pm

    This website has so much information on it but, i just cant seem to get off from it! its amazing! so i read the other comments and most of them are very random so i guess i’ll be random to so OMG…………I LOVE TACOS! oh and i walked out side and the cats that live out side are really intresting i could watch them all night: which i have!

  58. Ben Sherman permalink
    June 15, 2010 8:57 am

    Just arrived here from Google. Thanks you for a very well researched, well written post! I had the same trouble you did in finding an accurate account of exactly what led to the 1981 moratorium. The Santa Barbara spill was in 1969, 12 years previous. Surely something else had to have happened to kick Congress’s butt into acting pro-environment. Finally it occurred to me what the answer probably is: Ixtoc. One of the biggest spill disasters in history, happened in the Gulf of Mexico in June 1979.
    Speaking of Ixtoc, does it bother you that the stoppage methods that didn’t work at the Ixtoc are pretty much the same ones that were used on the Deepwater horizon, and again didn’t work?
    All the discussion about the merits and benefits of drilling seem to rest on the assumption that the oil companies and the government agencies that regulate them all have nothing but our best interests at heart; that they would never cut corners on safety or lie to anyone about it, that they would never allow substandard equipment to go into service, that they have top-notch accident response plans but they are really aren’t critical because accidents just won’t happen. And even if they do, well that’s an acceptable risk; the environment will just absorb it and it will be fine.
    Obviously my opinion is that all that is a bunch of crap. And the results of this negligence and complete lack of ethical standards have been hugely counter-productive, even to the profitability of the industry itself. What do you think?

  59. June 23, 2012 8:35 am

    Great amazing issues here. I am very satisfied to see your post. Thanks so much and i’m taking a look forward to touch you. Will you please drop me a mail?

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