How much truth is there in President Obama's latest favorite mantra that we consume a disproportionate share of the world's oil, especially considering how little of the world's reserves we have? Posted on 03/09/2012 4:15:57 AM PST by Kaslin
How much truth is there in President Obama's latest favorite mantra that we consume a disproportionate share of the world's oil, especially considering how little of the world's reserves we have?
Recently, Obama said: "But here's the thing about oil. We have about 2, maybe 3, percent of the world's proven oil reserves. We use 25 percent of the world's oil. So think about it. Even if we doubled the amount of oil that we produce, we'd still be short by a factor of five."
First, let's look at the raw numbers and then examine Obama's misleading framing of the issue. This is important because he uses these statistics to justify his reckless expenditure of federal funds to pursue alternative "green" energy sources, such as the disgraceful and scandalous Solyndra project.
The United States has some 20 billion barrels of oil in reserves. By "reserves" we're talking "proven" reserves, meaning those that are certain to be recoverable in future years from known reservoirs under existing economic and operating conditions. That is, we have 20 billion barrels of oil that is recoverable at current prices and under lands currently available for development.
That definition excludes many oil reserves that Obama has declared off-limits. According to the Institute for Energy Research, we have more than 1.4 trillion barrels of oil that is technically recoverable in the United States with existing technology. The largest deposits are located offshore, in portions of Alaska and in shale deposits in the Rocky Mountain states. So the United States has more recoverable oil than the rest of the non-North American world combined. The Heritage Foundation says this is enough to fuel every passenger car in the nation for 430 years. Therefore, "it is merely semantics -- not a scientific assessment of what America has the capacity to produce -- that allows critics to claim repeatedly that America is running out of energy."
When you add in recoverable resources from Canada and Mexico, the total recoverable oil in North America exceeds 1.7 trillion barrels. "To put this in context, Saudi Arabia has about 260 billion barrels of oil in proved reserves."
Another critical point: Even using the restrictive definition of reserves Obama is using, the 20-billion barrel figure is misleading, because Obama is clearly implying it is a fixed, or static, number -- as though with every barrel of oil we consume, we are pushing the oil energy doomsday clock another second toward the apocalypse. But in fact, that number is not static, but constantly in flux.
The institute tells us that in 1980, for example, the United States had 30 billion barrels of oil in reserves. But over the next 30 years -- through 2010 -- we produced 77 billion barrels. Now, how can it be that we produced almost 2 1/2 times more oil than we had available, consumed a great deal and still ended up with plenty left over?
Obama's own Energy Information Administration is predicting a steady increase in reserves on land currently available for exploration. Heritage's David Kreutzer says, "It projects that improvements in technology and the economics of extraction, production, and sales actually will lead to a 23.7 percent increase in U.S. reserves -- even after extracting billions of barrels of oil in the interim."
There's more. Obama's formulation conflates two different measures. True, we might have only between 2 and 3 percent of the world's recoverable reserves -- as narrowly and misleadingly defined -- but we don't consume 25 percent of the world's oil reserves, which is what Obama wants you to believe. We consume closer to 22 percent -- but it's not of reserves; it's of the world's oil production. But, as Heritage notes, "we consume about 22 percent of the world's production of everything," not just oil. Consumption is determined by income, not by available resources -- and for those who are always knocking the United States, we also produce about 22 percent of the world's total output of all goods and services.
Admittedly, we don't produce 22 percent of the world's total oil output; it's more like 6 to 10 percent. But experts say this number will increase even if we don't access the other abundant sources that Obama has declared off-limits.
For overblown and in some cases completely fabricated environmental concerns, Obama is preventing us from greatly expanding the pie of our oil reserves, from offshore drilling to Alaska to Keystone to fracking, and at the same time throwing government money down the ratholes of projects that aren't sound and economically prudent enough to warrant substantial private investment dollars.
He's told us he wants to bankrupt the coal industry, get us out of gas-driven cars and into electrical clunkers and onto bike paths, and increase the price of gas.
Why don't we believe him?
Why don’t we figure out what % of the USA the
Tyrant Emperor and his Marxist Czars and Czarinos
represent, ... and what % of US gasoline consumption
is actually consumed by THEM?
Key key word is proven (actually should be called "proved")
Oil is not allowed in the proved reserves column until it is drilled and flow tested.
By keeping large areas not available from exploration and production, he artificially lowers the amount of the actual oil in the ground to be counted as proved reserves.
Bookmark bump.
Another lefty claim is that ‘big oil’ has many wells that are proven, but capped, sitting on them while the price goes ever upward. Thoughts?
Obama is also parroting Marxist rhetoric about the US using disproportionately too much of the “world’s” resources that must be shared with everyone. What the US does with its use of oil is to quite literally feed the world, serve as the world center for new innovation and invention and give ALL its people the highest standard of living in the world. Obama wants to end all this.
And then there’s the claim that the companies aren’t maintaining their refineries, letting them go, and not building new ones, to keep the price of refined goods up.
Sounds like balderdash to me.
His lips move - you know what that means!
Oil companies don’t make money leaving oil in the ground.
If it is owned by a major oil company, it is either flowing or so new the pipeline is a year away to complete then it flows.
Some old stripper wells producing maybe 2 barrels a day get capped when the price falls. When the price climbs and the drill rigs get busy, you cannot justify tying up a rig to rework an oil well for a few barrels a day versus a new well producing hundreds to maybe even thousands a day at first.
The only wells left capped are the uneconomic ones.
We have spent billions upgrading and expanding our existing refineries. Combined with our falling demand, our refinery capacity is now noticeably larger than our refined product consumption.
Note: our total petroleum usuage is larger than the above graph, but that includes about 2.2 MMBPD of Natural Gas Liquids like propane, ethane, etc.
Click the graphs for the data links.
Either way, coal can be converted to liquid fuels and gas, further enhancing the supply. Clean burning coal-gas can also be used to generate the electricity desperately needed for the liberals' sacred electric cars.
The coal gasification plants should be built at or near the mining sites. Underground pipelines should be run to power-plants near the filthy communist cities where it is used, rather than the inefficient power robbing high tension transmission lines currently in use.
So what do you claim is the efficiency of a gas pipeline versus the efficiency of a high voltage transmission line?
Well, doesn’t all of the gas get to where it’s going?
No. Compressor stations are built along the pipeline consuming a portion of the Gas as fuel to keep pushing it along and overcoming the constant pressure drop created by friction.
Gas and Liquid pipelines have losses due to friction. They require some other form energy to overcome those losses. You either burn the fuel in the pipeline, or consume some other source of energy to drive pumps or compressors.
The total pipeline is miles 1,407 miles long.
It has 18 Compressor Stations.
The total installed Horsepower of those stations equals 517,000.
It can carry up to 2,400 million cubic feet per day. This is a very large pipeline.
Some of these stations are compressors as large as 42,000 Hp aircraft derivative jet engines. Other are smaller 10~15,000 Hp Electric driven variable speed drives.
Nuclear plants are Satan, and for some reason so is hydro, but their "fuel" efficiency is not a factor.
The gasification concept is practically pollution-free other than the dust and exhaust from ground equipment. Plus pipelines generate no electromagnetic induction issues.
Gas and Liquid pipelines have losses due to friction. They require some other form energy to overcome those losses. You either burn the fuel in the pipeline, or consume some other source of energy to drive pumps or compressors.
We also have tons of NG, pipelines already crisscross the US. NG is almost free, and could be used to power the booster pumps...I'm not sure if the two are miscible, but they might be, allowing NG to flow from its source and coal gas to be added where it is produced.
Being sold as a cleaner/safer technology, think of the jobs it would create.
Pull out all the stops!
With the glut of Natural gas out there shouldn't the price of propane go down?
There are plenty of wells that are capped, typically because the yield has dropped off as the oil was depleted. It's not economical to continue trying to pump out the oil at the reduced flow rate. The equipment could be moved to someplace else more productive. Or even if it was left in place, the equipment has to be maintained.
If the price gets high enough, then it can become economical to restart production on marginal oil wells. There's no conspiracy -- it's just supply and demand. What is the point of spending $110 to pump out a barrel of oil that you can only sell for $100?
If the price goes to $120, you can make a profit. However, are you sure that the price will stay at or above $120? Or, will it drop again before you can get production started? Think about it, and you'll understand why it's a risky bet.
A lot of the solar boondoggles (like Solyendra) are because Chinese imports reduced the market price per kilowatt to a point where US manufactures can't compete. And, one of the reasons that solar power is still a niche market is because the cost of producing power is STILL more than just buying it from your local electric utility.
If either of these factors were reversed, there would be a huge market for solar panels, and manufacturers would be cranking up the production lines. But, if you were to apply the same leftist analogy: solar panel manufacturers are holding them off the market to inflate the prices.
One last thing to consider: so many people think that "big oil" is making obscene amounts of money. But, they only consider revenues, and not the costs. What is the actual profit margin? You can get the information here:
That has an entry for a lot of different industries involved in resource recovery. The net profit margin for "Major Integrated Oil and Gas" (like Exxon, BP, etc.) is 7.9%. Compare that to this:
You can click on the header entry for Net Profit Margin and sort by profit margin. Look around and you'll see that a 7.9% profit margin is not outrageous. You can even check individual companies. Check out:
Compare those to Apple, Inc. -- which has a 28.20% profit margin.
Just for grins, check the "Semiconductor - Specialized" industry under the "Technology" sector. You'll find most of the well-known names in the solar panel business in that category. Their profit margins will explain why it's a horrible investment at this time.
I don't know where you came up with that concept, but it is far from true. The same impurities in the coal still exist when you gasify the coal. They same sulfurs and the like still have to be recovered.
Coal Gasification is also VERY energy intensive. You have huge losses of energy, orders of magnitude greater than the transmission line losses you were trying to save.
Plus pipelines generate no electromagnetic induction issues.
No, they produce exhaust along the pipeline at every compressor station. They have EPA monitoring and special NOX limitations. They are far from pollution free. And electromagnetic radiation from transmission lines are only a problem for people wearing tinfoil hats.
We also have tons of NG
Yes, over a 1/3 of it is used to generate electric power in this country.
NG is almost free
Dream on. Although it is far cheaper than petroleum, it is far more expensive than the coal you are trying to replace.
Being sold as a cleaner/safer technology, think of the jobs it would create.
Only to the ignorant. First you waste energy and release the same pollutants in the coal gasification plant.
Then you added more engines at the compressor station spreading them along the pipeline as they approach the population center.
Now you have the power plant burning gas, at the population center (EPA attainment area with greater requirements for pollution controls). Also, since the most efficient thermal power plants (combined cycle gas turbine, using waste heat recover) are around 60% efficient, you have to move far more energy in the pipeline than you would have in the electric transmission line.
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