Skip to comments.A World Affloat on an Ocean of Oil
Posted on 06/15/2008 8:12:08 AM PDT by kellynla
Considering how much untapped oil is known to exist, not just in the United States, but worldwide, one would think that its current price was some kind of anomaly and it is. It is more the result of speculation than anything else.
The most fundamental fact about oil worldwide is that there is lots of it. Though frequently overlooked, the ability to refine crude oil plays an essential role in the supply and demand equation. More refining capacity is needed worldwide. Finally, theres the fact that, in general, oil is very expensive to get at and often found in the most inhospitable places on Earth.
For sheer insanity, however, consider a nation that has an estimated 31 billion barrels of oil offshore of its coasts and 117 billion barrels of oil under land owned or managed by the government, plus 139 billion barrels beneath privately held land.
In just one area, a desolate place designated a wildlife refuge, theres an estimated 7.7 billion barrels untapped. The nation with this abundance of oil is, of course, the United States of America. Most of the areas where oil is known to exist have been ruled off-limits to any exploration or extraction by the government.
In the areas where it is accessible, drilling for it is hugely encumbered and often denied by the National Environmental Policy Act, the Clean Water Act, the Endangered Species Act, and the National Historic Preservation Act.
If, however, you connect the dots, you will have noticed by now that Americas energy problems, namely the price of a gallon of gasoline or heating oil, is making everyone miserable thanks in great part to environmental legislation designed to make it impossible to access oil on both public and privately held lands. Then, just to make matters worse, the government requires that every gallon of gasoline include the additive, ethanol, which reduces its mileage and increases its cost.
Further, were told that Sen. Barack Obama, if elected, intends to seize windfall profits. This is sufficient reason for American oil companies to decide to drill anywhere else. The last time a windfall profits tax was implemented was at the end of President Carters term. It had such a negative impact on U.S. oil companies that drilling for oil domestically dropped dramatically. It has stayed that way since the 1980s. Their actual profits are now less than pharmaceutical, high tech, and other elements of the economy. Imagine how thrilled they were to hear Rep. Maxine Waters threat to nationalize them.
No profits. No exploration. No drilling. And no domestic oil with which to correct our dependence on foreign oil and thus provide a measure of security to a nation that runs on oil.
If you wanted to bring the United States to ruin, you could not have designed and implemented a more perfect scheme. Along with too many members of Congress, environmentalists are Americas Fifth Column.
As my friend, Seldon B. Graham, a veteran petroleum engineer and oil industry attorney, and a graduate of West Point says of oil, says If it is worth dying for in the Near East, it is worth drilling for in the United States.
As to the claim that the Earth is running out of oil, that can be easily dismissed simply by reading information available in respected publications such as Business Week. Its June 9 edition reported the Saudis already plan to increase production by 300,000 barrels a day in June for a total of 9.45 barrels to meet customer demand. Unlike the U.S., The Saudis have embarked on an ambitious expansion program that should see more than 2 million barrels of new production capacity come onstream by the middle of next year.
Those of us who follow energy trends read the Energy Tribune because it has some of the best information available on what is really occurring. In its May edition, Matt Pickard wrote about the expansion worldwide of offshore drilling, noting that todays prices are being driven by increased demand from rapidly developing nations such as China and India. This demand is going to increase over the next two or three decades.
Unless the United States begins to free up its own oil and natural gas reserves, Americans are going to be paying more at the pump and in their homes for a very long time to come.
The good news is that the offshore oil and gas industry, despite the huge risks and costs involved and despite an aging, understaffed workforce, is making strides to meet demand. Whether its in the Gulf of Mexico or the North Sea, the icy waters of the Barents Sea or offshore of Brazil and Africa, massive new reserves of oil are being found.
Large discoveries offshore Brazil, the continued progress in every regions major projects, and the ongoing push for Arctic exploration and production point to the industrys potential for growth over the next 20 to 30 years, wrote Pickard. Brazil is poised to become a major producer. In its Tupi field, Petrobas announced an aggressive development plan, with an early production system possible within two or three years, reports Pickard. The nearby Jupiter field has gas reserves to rival Tupi.
None of this is a secret! Both privately owned U.S. and foreign national oil companies are going to find more oil and gas.
Neither candidate for President is telling the truth these days because both believe global warming is real and both keep blathering on about alternative energy. The big problem for the rest of us is that you cant pour wind or solar energy into a gas tank.
The U.S. mandate for ethanol as a gasoline additive has already significantly put the worlds food supply in jeopardy, but most Americans are blissfully unaware that it requires 1.5 gallons of ethanol to produce the same energy as a gallon of gasoline. It actually emits more carbon dioxide than gasoline. It is an environmental hoax.
The world is afloat an ocean of oil. Meanwhile, the United States continues to rule 85% of its offshore oil off-limits to exploration and extraction. This is occurring while the Chinese prepare to pump oil just offshore of Cuba, a merely 90 miles from Florida. It is occurring while the Russians are looking to plant their flag on potential reserves of subterranean oil in the Arctic.
The next time you hear a politician say we need to be energy independent, ask him or her why Americans cannot have access to the oil reserves known to exist in California, in Alaska, and in many of our other States or off the coastlines of Florida and elsewhere.
Ask them why the fate of the condors and little known species is more important than the family budget of Americans forced to make choices between more food and more gasoline.
Ask them why they continue to claim that global warming is a threat when the entire Earth is now in a decade-old cooling cycle.
Ask them why they insist on blaming investor-owned oil companies whose own reserves are barely four percent of the all the oil that exists worldwide? Ask them how they expect these oil companies to compete in the global marketplace when they threaten to seize their profits.
Energy is the master resource. It determines which nations thrive and which lag behind. For now, America is being ill-served by a Congress that refuses to permit access our own energy resources.
Ask yourself how we have arrived at a point in time when both candidates for President believe in a non-existent global warming and whose proposals offer no practical solution to our current and future energy needs.
France derives over 75% of its electricity from nuclear energy. This is due to a long-standing policy based on energy security.
France is the world's largest net exporter of electricity due to its very low cost of generation, and gains over EUR 3 billion per year from this.
France has been very active in developing nuclear technology. Reactors and fuel products and services are a major export.
France has 59 nuclear reactors operated by ElectricitÃ© de France (EdF) with total capacity of over 63 GWe, supplying over 430 billion kWh per year of electricity, 78% of the total generated there. In 2005 French electricity generation was 549 billion kWh net and consumption 482 billion kWh - 7700 kWh per person. Over the last decade France has exported 60-70 billion kWh net each year and EdF expects exports to continue at 65-70 TWh/yr.
The present situation is due to the French government deciding in 1974, just after the first oil shock, to expand rapidly the country's nuclear power capacity. This decision was taken in the context of France having substantial heavy engineering expertise but few indigenous energy resources. Nuclear energy, with the fuel cost being a relatively small part of the overall cost, made good sense in minimising imports and achieving greater energy security.
As a result of the 1974 decision, France now claims a substantial level of energy independence and almost the lowest cost electricity in Europe. It also has an extremely low level of CO2 emissions per capita from electricity generation, since over 90% of its electricity is nuclear or hydro.
If the government continues to regulate and interfere
with the production and marketing of energy commodities the
supply will farther decrease causing shortages and the
price will go up even more.
“I cannot understand why Obama, Reid, and Pelosi are in any position of power. Are we insane?”
When you have half the population in America dependent on some kind of government assistance; it’s not difficult to “understand” how the “mommy” party continues to rule.
Who says communism is dead.
“Liberalism is just Communism sold by the drink.”
Drill. Nukes. Coal. Shale. Capacity.
There's the proper energy policy for the US for the next hundred years, in just 5 words.
There is an ocean of oil. There is oil to fill a six mile cube. A six mile cube is apparently an ocean.
They are also unaware that it takes 1.25 gallons of gasoline to produce one gallon of ethanol.
Actually, it's cheaper than regular gas, not to mention cleaner. And if people would tune their engines right, would find it provides more power which makes consumption about equal to regular gas. If E85 was readily available, it would enable engines to be built developing much more power and much better fuel efficiency. We will see hybrids using E85 in the very near future.
You are the one peddling ignorance here.
Plus there is the problem of refining capacity, which IS near peak capacity.
Demand is moving no faster than population growth world-wide, and peak argument are hopelessly wrong. Proven reserves are rising faster than demand or use, enough so that known reserves as 10% higher than they were 10 years ago, despite all the use in the meantime. 20% higher with newly recoverable forms, economic at current prices (or even well below them).
I think you’re arguing semantics here. Or perhaps grammar.
“its current price” is referring to oil that is being sold now. Not oil in the ground.
He’s not commenting on the (potential) price of untapped oil. He referring to what would happen to the current market price of oil if more of the untapped (but available) oil was being accessed & produced.
That said, my old trading motto applies: when the public start yammering about ''the price of X is too high (or too low)'', it's time to start looking about for careful ways of fading their 'opinion'. The public -- one way or another, and sooner than later -- are always wrong, and can be (and have been) wrong for quite enormous lengths of time, which of course makes fading them a very useful tactic.