Great column at The American Thinker by Janet Levy regarding the supply of oil resources in the US. First, energy supply estimates use false methodologies and are consistently understated - predictions of the oil supply running out were been made seven times before the year 1950 alone, even while the US was the world's leading oil producer until 1973, and is still the third largest (if I recall correctly) today.
The primary issue with the numbers are that they do not count actual oil resources, but oil reserves, which is the oil that can be economically and physically recoverable, which changes as new technology is introduced. Resources also include huge amounts of oil from unconventional resources such as oil shale, tar sands, and coal liquification. Reserve calculation also use current prices and production rates, which are also subject to change. In addition, as prices rise, the economic feasibility of more difficult to reach supplies becomes more attractive, and it becomes increasingly feasible to exploit unconventional resources.
Levy discusses some of the changes new technology brings:
"...well depths now approach 30,000 feet on land and, in offshore drilling, water depths to 9,000 feet. The yield from a single well has increased greatly through the use of horizontal drilling techniques. Instead of a single well accessed through one vertical shaft, multiple horizontal shafts are now bored from a vertical shaft, resulting in substantially greater yields. Other new technologies that have increased the efficiency and effectiveness of oil discovery and exploration include:
Hydraulic fracturing - Injection of fluids into a well under high pressure to release oil from rock formations.
Tertiary recovery techniques - Injection of C02 or natural gas into the well to improve oil viscosity and draw more oil into the well bore.
Reservoir simulation technology (RST) - Computer modeling of reservoir properties through mapping and behavior simulation to aid in resource prediction.
4-D seismic imagery - Use of time intervals and dynamic evolution of reservoirs, to lessen guesswork and allow geologists to view reserves below the surface. It also reduces drilling risks and improves recovery by identifying drainage patterns and bypassed petroleum sources.
In addition, technological advances have led to re-tapping of previously capped wells and opening of closed formations to production. It has also dramatically reduced the oil-production footprint. In the 1970s, wells were spaced at least 100 feet apart. Today, with drilling and equipment advances, wells can now be placed 50, 25 and even 10 feet apart. An oil field covering 65 acres thirty years ago would use less than 10 acres today."
Levy also discusses unconventional resources in some depth, the first being Oil shale, of which there is an estimate 1.5 trillion barrels to be found in the American West, a oil supply far greater than the known reserves of even leading oil producer Saudi Arabia. Such oil resources can be profitably extracted at prices over just $30 a barrel. Tar sand supplies in Canada, which exceed 174 billion barrels, already supply about half of that nation's million plus barrel exports to the US, and their total oil producton from such supplies is expected to reach over 3 million barrels a day in the next decade. Canada is the US's leading oil supplier.
And then there is coal liquification, or the conversion of coal into liquid fuels. This technology was pioneered by Nazi Germany during World War 2 and is used today in South Africa to supply 40% of that nation's petroleum needs. This technology is proven economically effective at world oil prices of just $30 a barrel, and the US possesses 27% of the world coal supply - in effect, the US is the Saudi Arabia of coal. The US Airforce is planning to use the tehcnology to supply all its domestic fuel needs by 2016.
Levy then returns to conventional sources of supply to be found within the US, which using 30 year old estimates is thought to be around86 billion barrels in offshore depsoits and 32 billion onshore. However, this estimate does not include new technologies, unconventional resources, or relatively new estimates of recent discoveries like the Bakken formation found under the northern Great Plains states and the Alaskan National Wildlife Refuge. The US Geological Survey increased its estimates of the Bakken formation in 2008 to between 3-4 billion barrels, and oil industry estimates of ANWR believe that area could hold anywhere from 9 to 16 billion barrels.
Unfortunately, at least until Sept. 30th when it is set to expire, we can't even go take a look at 85% of the offshore deposits due to the Congressional moratorium, not to mention develop our oil shale deposits. We shoulod at least examine what we have, shouldn't we?