Understanding Oil

With the cost of gas still near record highs and crude oil prices rising and falling like a ride at Six Flags, drilling for oil has been capturing imaginations and grabbing headlines. But caveat emptor: misinformation abounds. In one case a recent graphic by a respected news service painted a rosier picture of our nation's resources than the facts would indicate.

Take a look at the graphic. The black text shows the original as it appeared in newspapers; the text in red shows our corrections. The bottom line: lifting all bans on offshore drilling will make about an additional 18 (not 115) billion barrels available for drilling.

Corrections (in red) to an oil-drilling graphic published in June 2008 by McClatchy Newspapers

So Where Does the Estimate of 115 Billion Barrels Come From?

The "115 billion barrels" number corresponds to the United States' total endowment of technically recoverable offshore oil (see this Congressional report [pdf]). The operative word in this category is "endowment." It includes both:

• an estimate of what is remaining in the ground (in terms of discovered resources and future finds) and
• the amount of oil we have already recovered and used (in oil-world jargon this is the cumulative production).

Since the debate is about how much oil we can get from opening up offshore fields for drilling, we clearly cannot count the oil we have already used -- some 14 billion barrels. Subtracting that from 115 leaves us with 101 billion barrels.

But there is another problem: the remaining 101 billion barrels include some 15 billion barrels of oil in fields that have already been discovered and to which oil companies already have access. If they already have access to them, those barrels clearly do not represent oil that can be gotten by opening new oil fields. When we subtract these 15 billion barrels, we are left with 86 billion barrels -- the so-called undiscovered technically recoverable resource (UTRR). (See report [pdf].) The UTRR is the total undiscovered potential oil resources we think might be in the ground based on geologic knowledge and theory (see our glossary for more on UTTR). 

This UTRR is what the offshore drilling discussion has really been about -- or should have been about. Hence, the change in title.

To underline the point, let me reiterate: the total offshore UTRR for the United States is estimated at 86 billion barrels.

Potential Offshore Oil Resources: Very Speculative
It's important to note that UTRR is an estimated, undiscovered resource without consideration of how much money it would take to get it to the pump. In other words, there is no guarantee that it's really there and if it is, that it would be economically viable to produce.

Offshore Potential Resources: Most Is Already Available for Drilling

To date, most of our offshore drilling has been concentrated in the Gulf of Mexico. From the corrected graphic you can see that at 45 billion barrels, about 50 percent of our undiscovered technically recoverable offshore oil resource is located in the gulf. Alaska holds another 31 percent of our offshore UTRR.

What most people don't realize is that oil companies already have access to 90 percent of the gulf's UTRR and 100 percent of UTTR located off the coast of Alaska. Only some of the eastern part of the gulf, which is estimated to hold about 4 billion barrels of UTRR, has remained off limits to leasing. But opening up this part of the gulf is not currently on the table, as this region is closed to drilling under a separate Congressional ban that will remain in effect until 2022.

How Much Potential Oil Is At Stake

So the drilling bans Congress has allowed to expire will only open up offshore lands along the Atlantic and Pacific coasts, giving us access to about 14 billion barrels of undiscovered technically recoverable oil. If Congress also lifted the ban on drilling off Florida's coast, the additional 4 billion barrels this region is thought to hold would bring the total to 18 billion barrels.

So, here's the bottom line. The debate that has consumed our nation has been about 18 billion barrels of offshore oil that may or may not be there and/or may or may not be economically recoverable to produce. That's a whole lot less than the 115 billion barrels that appeared in our newspapers.

Sources:

"Report to Congress: Comprehensive Inventory of U.S. OCS Oil and Natural Gas Resources," Minerals Management Service -
www.mms.gov/revaldiv/PDFs/FinalInvRptToCongress050106.pdf

"Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation's Outer Continental Shelf, 2006," Minerals Management Service -
www.mms.gov/revaldiv/PDFs/2006NationalAssessmentBrochure.pdf

Dr. Bill Chameides is a member of the National Academy of Sciences and the dean of Duke University's Nicholas School of the Environment. He blogs regularly at www.thegreengrok.com.

 

 

Follow Bill Chameides on Twitter: www.twitter.com/theGreenGrok

Comments

[Bill Chameides - Huffpost Blogger]

Thanks for the lively discussion. I did want to weigh in on a couple of points.

The purpose of the post was to lay out the facts - how much oil becomes potentially available by lifting the ban on offshore drilling. Where you go with this information (for drilling or against drilling) is up to you.

The comments claiming that the oil resource we cite is too small are misplaced.

For example, take the new Chevron find in the Jack field mentioned by NL207. Oil from this field as well as other deep water fields in lower tertiary formations in the Gulf is not relevant to this discussion because WE ARE ALREADY DRILLING THERE, i.e., the ban on offshore drilling did not prevent drilling in these fields, and lifting the ban does not make any more of this oil available for drilling.

The same goes for ANWR - not an offshore site and not relevant to a discussion on offshore drilling.

[KillTheMessenger]

As you can tell, nobody is listening.

"Drill, baby, drill!" captures 0.7 second attention spans way better than a graph with numbers can.

[NL207]

Maybe you and this esteemed member of the National Academy would like to talk reality about available oil supplies.

Dr. Chameides makes this statement above:
"The debate that has consumed our nation has been about 18 billion barrels of offshore oil that may or may not be there and/or may or may not be economically recoverable to produce"

The is disingenuous at best. The recent strike in the Gulf of Mexico was almost this large by itself. "Chevron’s new Jack field will produce a total of 10–15 billion barrels of oil.": sourcre http://www.cgfi.org/2006/09/12/big-gulf-oil-strike-could-save-100-million-acres-of-us-forests//

This debate mentioned above includes the drilling ban on ANWR, where there is a proven 10.4 B bbl field in section 1002 and the possibility that another 80+ B bbls exist in the areas of ANWR outside section 1002. http://pubs.usgs.gov/fs/fs-0028-01/

The debate mentioned above includes drilling in the Arctic Ocean, where there are an estimated 90B more bbls. http://www.bloomberg.com/apps/news?pid=20601082&sid=aqEDMhrCvp28

The debate mentioned above includes drilling to recover Green River shale oil, which might produce 800B bbls of oil. http://www.fossil.energy.gov/programs/reserves/npr/Oil_Shale_Resource_Fact_Sheet.pdf

[realpolitic]

In other more reputable sources, the real size of Chevron"s new Jack field is "3 billion to 15 billion barrels of oil"

"Simmons said the gulf had yielded several highly touted oil finds over the years that fell short of expectations."

"If the partners decide to develop the field, production will follow in six or seven years, Chevron said."

http://articles.latimes.com/2006/sep/06/business/fi-oil6

And with the discovery, Chevron could avoid more than $1 billion in royalty payments to the federal government for the oil.

http://www.nytimes.com/2006/09/12/business/12oil.html

Where do you find the 80 billion barrels outside of section 1002 in Alaska?

"The total quantity of technically recoverable oil
within the entire assessment area is estimated to be
between 5.7 and 16.0 billion barrels (95-percent and 5-
percent probability range), with a mean value of 10.4
billion barrels. Technically recoverable oil within the
ANWR 1002 area (excluding State and Native areas) is
estimated to be between 4.3 and 11.8 billion barrels (95-
and 5-percent probability range), with a mean value of 7.7
billion barrels (table 1)"

http://pubs.usgs.gov/fs/fs-0028-01/fs-0028-01.pdf

[realpolitic]

The shale oil in Green River will take more energy to remove it than it will produce!!

'Shell’s ICP involves drilling holes more than a thousand feet deep, inserting electrical heaters and heating the rock to 650-700°F for two to four years to enable kerogen conversion. In order to prevent groundwater from mixing with oil products, Shell also intends to inject coolants around the production site to create a frozen, impermeable barrier. '

"These operations and prices are by no means proven, and most doubt that
commercial production of oil shale will ever be possible."

"Furthermore, the minimal energy efficiency of shale oil extraction means that these costs will more than likely outweigh the limited resource benefits."

In terms of raw energy content, oil shale is vastly inferior to coal,
firewood, and even manure. Pound for pound, oil shale contains around one-sixth the
energy content of coal and only one-fourth that of recycled phone books.

RAND estimates that a production operation of 100,000 bpd would require a dedicated 1.2 gigawatt dedicated power plant, comparable in size to the Seabrook nuclear plant in Connecticut which serves more than 900,000 customers; production of a million barrels a day would require ten of these.

http://srb.stanford.edu/nur/GP200A%20Papers/elliot_grunewald_paper.pdf

About three barrels of water are needed per barrel of shale
oil produced.

http://www.rand.org/pubs/monographs/2005/RAND_MG414.sum.pdf

[NL207]

The notion that new oil production in the US should be prohibited by government force because there isn't any oil to produce or that production costs is simply false. Those who propose this must do so for soome other reason. I think they do it because they know full well that in the absence of government force oil WILL be produced in these areas and they are opposed to this production for reasons unrelated to the availability or economy of this oil.

You support Chameides argument? --> You aren't any more intellectually honest than he is about true US oil reserves.

Continued government prohibition on development of economic oil reserves = plan for economic disaster.

[realpolitic]

Well, if you have different information about the true US reserves would you please present it, instead of just making ad homeniem attacks, as so many conservatives always fall back on.

The argument is not that the government should prohibit drilling because there is not enough oil to produce or production costs are too high. The argument is that given the miniscule oil we have along our coasts and Alaska the costs outweigh the benefits of drilling for it. The costs include ruining vulnerable, pristine wildernesses areas and the loss of tourist dollars for states with beautiful coastlines given the inevitable oil spills. Another argument is given our low oil resources and high oil needs why not put our resources into developing alternative fuels?

[realpolitic]

I can see why NL feels the need to deny all global warming science, including even that polar bears are endangered by the diminishing ice in the artic. Those arguments are a perverse rationale to open all these vulnerable areas to drilling for oil.

[mamacat]

OMG.
Are you saying that the right-wing pundits and McCain and the Republicans have all been lying to us? Quick! Get my heart medicine! I am shocked!

[realpolitic]

I can't believe it either!