Untapped Resources?

Nice map:

20080522_us_oil_2

From Friday’s WSJ:

"Mounting concerns about global energy supply are fueling a drive by the
oil industry and some U.S. lawmakers to end longstanding bans on
domestic drilling put in place to protect environmentally sensitive
areas.

Increasing U.S. oil production would require overturning
decades-old moratoriums that limit offshore drilling and accelerating
leasing of federal lands, moves that would trigger a swift and vigorous
political backlash. Still, as gasoline prices continue to climb and
squeeze household budgets, the momentum appears to be gaining to open
up new areas."

See also: New Find Fuels Speculation Brazil Will Be a Power in Oil

Now, what about raising CAFE standards?

>

Source:
Oil Industry, Lawmakers Aim To Lift Bans on Drilling
Fears Over Supply Drive Push to Enter Protected U.S. Areas
RUSSELL GOLD BEN CASSELMAN and STEPHEN POWER
WSJ, May 23, 2008; Page A5
http://online.wsj.com/article/SB121149858423815755.html   

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What's been said:

Discussions found on the web:
  1. Condor commented on May 25

    Imagine that… oil lobbyists eager to overturn environmental regs and begin domestic drilling. Nevermind that they were pushing for this back when gas was still $1.95.

    So how is it that the same group that brought us the War in Iraq is taken seriously about anything at this point? Better yet, how come they aren’t tarred and feathered?

  2. tom B commented on May 25

    “Better yet, how come they aren’t tarred and feathered?”

    I’ll chip in for the tar– that’s probably $4 a gallon, too.

  3. Bob commented on May 25

    Gas prices in the US are still relatively inexpensive compared to the rest of the world. For example, most of Europe pays over US$8 per gallon.

    Instead of drilling for more, and finite, supplies of oil, we should be raising the fuel efficiencies of our vehicles (your reference to CAFE), and exploring alternative energy approaches.

    The supply of fossil fuels is finite. Meanwhile world-wide consumption is increasing (e.g., China and India, in addition to a thirsty US). This is not a sustainable condition. When something is not sustainable, eventually it has to stop.

  4. RW commented on May 25

    Assuming I’m not missing anything the map depicts an estimated 39 billion barrels of oil in the US. The US consumes approx 21 million bbls of oil per day (2007 est) so a quick back of the envelope calculation indicates we’re looking at about 5 years worth of consumption at current rates.

    Looked at another way we could probably reduce US dependence on foreign sources of oil by a few points/year but it seems unlikely the impact would be great enough to reduce the influence of those sources over US business, policies and politics (it goes w/o saying that most of those sources are no one we would care to take orders from).

    Probably time to give up on the short-term, stop-gap thinking typified by these kinds of proposals. If such plans were a genuine intermediate-term effort to buy us time in the face of unforeseen events one could accept them as justified but when they clearly represent the same kind of thinking that got us into this mess in the first place over the past few decades the conclusion is inescapable: nothing will change if we increase drilling and the kind of serious policy adjustments, R&D, infrastructure investment, social mobilization, etc necessary to forge a clear path out of the morass will once again be delayed.

    “There’s an old saying in Tennessee — I know it’s in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can’t get fooled again.”

    Oh yeah.

  5. ZackAttack commented on May 25

    TGBBGDDD (the great big bell goes ding, ding, ding) moment – On Friday, I noted that CNBC ran a “Special Report: The Crude Crisis”

    I would think about taking a little something off or getting protected.

  6. mobiaxis commented on May 25

    Would not increasing supply have the effect of lowering prices, increasing demand and hastening the ultimate depletion of this resource?

    …But as long as I can drive the navigator down to the mall TODAY for some more cheap plastic crap from China…

  7. Leo commented on May 25

    The USGS 2007-2008 Assessment Updates puts the figures at 48.5 BBO and 655 TCFG, and the current maps (HT TBP) are on my blog.

  8. Scytale commented on May 25

    Until a few holes have been drilled, this is just speculation.

  9. Nick – Los Angeles commented on May 25

    Yep… seems pretty clear that the beneficiaries of extracting the remaining oil and gas from public US lands… would NOT be the public.

    A couple million barrels a day production would NOT give anyone noticeably cheaper energy products.

    However, what do you think are the chances that the $billions in profits would overwhelmingly flow to a couple oil & gas supermajors with typically sweet contracts from the feds? I’d say, 99.9%.

    How many oil & gas execs have a fat bonus waiting for them on the day that they secure extraction rights?

    This is about maximizing the monetization of energy resource assets before the INEVITABLE conversion to sun-sourced energy infrastructure, and actually reduces our strategic energy security. Our piddly remaining hydrocarbon energy resources should be kept for a rainy day.

    It’s an old game…… public strategic security is deliberately reduced in order to force maximum value extraction from the public. Adam Smith would sure as hell not approve.

    Almost everyone I know actually thinks that oil & gas extracted domestically would somehow wind up giving “us” cheap gasoline. No understanding of market function whatsoever.

    We always get what we deserve, dont we.

  10. Winston Munn commented on May 25

    I’m pretty certain tar is too expensive and feathers are environmentally protected…however, I have heard that waterboarding is legal….

  11. tim commented on May 25

    Interesting diagram but wow – just wow – lot of oil company hate today. The oil companies are doing exactly what we ask them to do. Provide us oil. And they do it very efficiently. How do you want it to work? Nationalize them? Because that works well.

    The bottom line is that we should be limiting our reliance on foreign sources of energy. The only way of doing that is aggressively raising CAFE limits, researching new technology, AND taping our own resources. Lets be honest here some of this local moratoriums are downright silly.

  12. Eric Davis commented on May 25

    …. What I love, is that oil companies are suffering the same Hubris, the Car companies have suffered since 1970,(and the same one that Microsoft is about to suffer) Using their monopolies to bully mother market for long enough to become completely uncompetitive, and borderline delusional.

    Oil is finished, it’s time to move on to other methods, I’m not advocating Solar or any of the other dumb shit. But how if we don’t flood the air with shit, to give our kids asthma, and everyone cancer over the next 30 years…

    all of this is just continued “rearranging deck chairs.”, and delaying the inevitable. I suspect big oil has been sandbagging it for the past 2 years, to exacerbate and initiate a Friedman-esqu crisis, so they can rape and pillage remaining resources, before we actually do have enough of a crisis to actually come to Jesus, that it’s time to move on, to develop fusion, and expanded nuclear.

    Instead of being ahead of the game, here in the U.S. and getting competitive in new markets…. We will be stupid and let Europe or Asia, develop the new technologies and markets…. While we, rearrange deck chairs, and let dinosaur old technology monopolies dominate our thinking and our markets, like the morons we are.

    But like everything, I always like to skip to the end, instead of going through the motions like we always have to do.

  13. odograph commented on May 25

    I’m glad someone above compared the reserves to the consumption. It just ain’t there to SOLVE the problem, but this keeps being presented as a solution.

    That is the key idea to refute.

  14. FT Woods commented on May 25

    Juneau Goes Into Conservation Overdrive

    A series of avalanches in April cut off the Alaskan capital from its source of cheap hydropower. The cost of electricity has quadrupled as a result. Juneau has been forced to cut its power consumption by nearly a third in one week.

    Juneau Power Crisis Brings Stark Savings Measures

    One month after an avalanche knocked out its connection to a hydroelectric dam, much of Juneau, Alaska, is still relying on diesel back-up generators. Residential electricity rates have gone up about 400 percent.

    As a result, residents and the city have embarked on an extraordinary conservation campaign. Compact fluorescent light bulbs are common; restaurants routinely dim the lights.

  15. Patrick commented on May 25

    I’m amused that “foreign oil” never seems to consider Canada and Mexico despite the fact they’re #1 and #2 of our providers, and, by definition, foreign.

    Oh well, gotta whip the masses up for the War, right?

  16. SIV commented on May 25

    CAFE standards? I would rather let the market decide how fuel efficient vehicles should be.

    High gas prices create demand for efficient vehicles.

  17. VennData commented on May 25

    …because the “free-market” doesn’t include the externalities such as taxes for roads, bridges, repairs, pollution, auto-traffic accidents, etc.. etc.. etc…

    So the government provides these lowering the cost of gasoline vehicles WITHOUT the appropriate counter-balancing “free-market” costs.

  18. rickrude commented on May 25

    raising cafe standards would hurt the US auto cos

  19. rickrude commented on May 25

    raising cafe standards would hurt the US auto cos

  20. Rock commented on May 25

    According to an article I read on msnbc, European cars get an average of 40 mpg (Hope they did the right conversion of liters and kilometers to gallons and miles). American cars get an average of 20.4 mpg. On the face of it, it would seem that raising cafe standards is the correct choice. American car manufacturers have a history of not making better cars unless forced to.

    Regarding renewed oil drilling in and around the US, I’m all for it. We really shouldn’t expect the world to ship their oil to us which we waste in inefficient ways while we also make a mess in their backyard; we have a NIMBY attitude. All of these other countries are drilling for oil and don’t make a mess of their ecology. Surely we can do as well.

  21. txshad0 commented on May 25

    EVERY energy card needs to be played, including the acquisition of new domestic reserves. We should not be forced to go to war to keep oil flowing to our economy.

  22. Markus commented on May 25

    But…., is drilling really banned in all of the places shown on that map as potential reserves? Really??

    I am wondering this because I am in Houston and there is a great big circle right next to it, possibly overlapping it. I have never heard about that area being banned for drilling and I don’t understand why it would be.

    Houston doesn’t really seem to have issues with nearby oil drilling, so long as it is not in the middle of the city. Even then, with the no zoning laws….., who knows, maybe they could set up a rig in the city. Houston is after all the oil capital of the country.

    I don’t know if I buy the whole no drilling in that area south west of Houston.

    Also, no drilling in that circle in Mississippi and Louisiana? Is that really true?? They let them drill in the Atchafalaya spill way, which would seem to be much more environmentally sensitive than there. It is even legal to drill in there right next to the interstate. They are allowed to be so close that they had to shut down I-10 there for a month or two a year or two ago when one of them blew.

    Maybe the map is of potential reserves irrespective of whether or not they can currently be drilled. If so, that map is a little deceiving given the title of the article that it is shown with.

  23. RW commented on May 25

    People are free to imagine anything they like from a bountiful god to a free market to moons made out of green cheese but the hard facts on the ground are that outfits like Toyota have beaten the US auto makers, gaining market share even while providing better performance and fuel efficiency, because they’re better capitalists: They’re not intrinsically better but they reacted to change via innovation instead of delaying tactics, cronyism and economic rent seeking.

    IMO outfits like Toyota would probably deal with CAFE standards significantly higher than today and barely break a sweat doing it because the real world is what markets work in and when the real world changes — as in society needs cleaner air and alternative fuels for example — then that alters or even creates a market environment and capitalism, I mean the real deal here and not the utopian version, just loves a new environment to play in.

    We really do need to rethink the way we’ve been playing the game here.

  24. mort commented on May 25

    This is about the oil bigs. I could do without gasoline with a decent EV and a squirrel cage on the roof. Instead we go on destroying the environment for the sake of corporate profits. Alas. On the plus side, it will be a hoot competing with dumb-assed J6P for the last tank of juice. Pucker up Joe & Jane.

  25. Zephyr commented on May 25

    The real problem is our piggish wastefulness of resources. We insist on driving overpowered, overweight, big ass SUVs.

    The oil companies and auto manufacturers are just striving to produce what the consumer demands.

  26. SoNotInTheKnow commented on May 25

    According to the London Telepgraph journalist, Ambrose Evans-Pritchard, Germany is calling on the G8 to ‘prohibit leveraged trading on energy contracts’.

    link
    Germany in call for ban on oil speculation

    Sounds like something the BP posters would like…

  27. SIV commented on May 25

    VD,

    Auto infrastructure externalities are covered by gas taxes. You left out all the positive externalities of auto ownership and travel. They more than offset the negatives.

    I would only consider CAFE standards to be acceptable if one day, automotive engineers were as well represented in congress as lawyers are now.

  28. John D commented on May 25

    Assuming peak oil is real…

    -over time ratchet CAFE standards, other energy efficiency standards, taxes on energy, etc
    -provide tax incentives to promote the R&D in alternative, clean, and/or renewable energy sources (ethanol from corn doesn’t count)
    -open up on-shore/off-shore US exploration and drilling (Alaska, Bakken, continental shelf, etc.)
    -keep a military presence in the Sunni Arab states as necessary to secure a supply of oil from the region while the U.S. makes a transition to less dependence on Gulf oil

    Nearly politically impossible to do, but could build us a bridge from here to there

  29. OhNoNotAgain commented on May 26

    “You left out all the positive externalities of auto ownership and travel.”

    Umm, what are these positive externalities ? Or are you saying that they *are* “auto ownership and travel” ? If so, then I’m not so sure that you know what the word externality means.

  30. Tiny Pepe commented on May 26

    Just before Bush.Con went off his his little crusade, we went off on our last vacation, a
    couple of weeks in Europe. Rather than ride
    the EuRail and slumber in youth hostels, we rented a French diesel sedan, which had just as much punch as anything you’d get here, short of a 440 Dodge Charger, and had one nice perk … we only had to stop to refuel once the whole time.

    By coincidence, the gas station was right next to the 357mph TGV train tracks, which, if you’ve never seen the TGV, you should fly over. Pucker power! Why don’t we have a TGV from Seattle to LA? How about Portland to St Louis on the wagon trail? No political will.
    Wait until airlines start going bankrupt.

    As soon as we got back, we called the dealer to place our order, but were told that the Toyota gas burners are corking the market, that, and US Clean Air reg’s deliberately crafted to keep European cars out. The only way we could get a French diesel was to have one shipped over after putting some miles on it, but there’s no US port where they’d let you drive off of the dock, without first changing the diesel engine for a gas hog.

    US DoD wasted $50B on the National Aerospace Plane, that hypersonic con job that dragged on for twenty-four years and a change of name to hide the scam, until Congress forced them to test it. Now the “dream” of flying from NYC to Sydney in 3-5 hours has been replaced by a $B hypersonic cruise missile, we’ll probably end up using to blow up the Green Zone, rather than let our new $1500M Ambassador Palace fall into the hands of the Shiia when Bush.Con cries Alamo II.

    I mean, with screwed up national priorities and budget scams like that, what’s the point of flopping our arms over CAFE standards?!
    If we’re lucky, gas will peak at $8 a gal.

  31. VJ commented on May 26

    Bob,

    Gas prices in the US are still relatively inexpensive compared to the rest of the world. For example, most of Europe pays over US$8 per gallon.

    But it’s taxes that are the difference:

    RETAIL GASOLINE PRICES

    (U.S. Dollars/Gallon)

    ………. tax …. ex-tax

    FRANCE .. 8.32 …. 3.30

    GERMANY . 8.50 …. 3.17

    BRITAIN . 8.21 …. 3.15

    JAPAN … 4.92 …. 3.61

    CANADA .. 4.47 …. 3.26

    USA ….. 3.43 …. 3.03

    Energy Information Administration
    APRIL 2008

    Not to mention that certain countries in Europe may not have a property tax or income tax or other taxation, so it’s six of one and a half a dozen of another.

    (Man, I had a hell of a time trying to get that to work)
    .

  32. VJ commented on May 26

    As to drilling in “environmentally sensitive areas”, it’s just more of the same old flim-flam propaganda from Big Oil.

    Any of those places would cost MORE to drill in, therefore would require a PREMIUM price over whatever the current market price would be, delivery would be ten years away, and there is a very limited quantity. So we’re going to spoil our last pristine areas for more expensive oil that we won’t see for a decade and there’s very little of it ?

    Face it, we cannot drill our way out of this. We consume something like 25% of the world’s production and only have something like 2% or 3% of the world’s reserves.
    .

  33. Zephyr commented on May 26

    We produce about 10% of the worlds oil output. We could easily produce from those protected areas for far less than the current oil prices. There would be some market price relief from that. However, I for one am happy to see us keep that oil in the ground for future use. Someday it will be of far greater value than today. And we will have it.

  34. Ken H. commented on May 26

    Peak oil my arse! This is no more about peak oil than lack of land as associated with housing prices.

    This is a political power play to decrease dependence. Our country was out of control. China and oil exporting countries were getting to the point they could effect policy decisions. I think Greenspan knew what could happen but his hand was forced by the Chinese. The Chinese cannot collapse our dollar if we do it first! then again, maybe he is that stupid?

    Oil is now a hedge against poor equity markets and banking failures after the housing bubble pop. Think Oil barrons want soccer mom driving a yugo or a Excursion? Get real! Consumption is falling off a cliff. I’m sure they are sicker than you are about the prices.

    Oil is going to be high until this credit bubble subsides which I think will be long. I just can’t see anything replacing the housing GDP engine any time soon. Anyone? Next bubble, Anyone?

  35. Mark E Hoffer commented on May 26

    It’s a good thing that they didn’t include the reserves on the Continental Shelf, one wouldn’t be able to see the map…

  36. Emma Anne commented on May 26

    I’m with the Saudi king: leave it in the ground for our children. If Peak Oil is here and oil will be getting increasingly expensive and valuable, we’ll want it more later.

  37. Babinich commented on May 26

    SIV says:

    “CAFE standards? I would rather let the market decide how fuel efficient vehicles should be.

    High gas prices create demand for efficient vehicles.”

    Excellent point… Let’s minimize government intrusion.

    There is nothing wrong with finding and utilizing new sources of oil while pursuing alternate fuels like nuclear.

    That is unless we’re still being led by the nose by the environmentalists.

  38. Brody Smith commented on May 26

    1. Producing more oil in US territory would help to strengthen the dollar by decreasing our imports.

    2. Alternative energy science and technology has improved over the last 30 years of cheap oil. By drilling to boost oil production now, we will give scientists time to develop alternatives in a more cost effective manner.

    3. By increasing oil supply now, we will give our economy time to adapt to moderately higher oil prices. Even if we all agree that we will eventually go to an oil free economy, I think that a gradual transition is far superior to a sudden one. For example compare USSR and China as they each transitioned to a more market based economy.

    4. Oil is more valuable right NOW than it will be in 30 years when we have developed alternatives.

  39. wunsacon commented on May 26

    I agree with “Tiny Pepe” and Zephyr.

    Can you imagine we exhaust the oil in the US first (by driving SUV’s)? *If* alternatives don’t come on quickly enough — and why would they when the economics favor oil? — then the phrase “dependence on foreign oil” wouldn’t begin to describe our situation.

Read this next.

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