Why Don't We Drill in the U.S. for Oil?

[Zoom-boing]

We want to get off of foreign oil, correct? Then why don't we drill here for it? I mean, within the U.S. (on land)?

 

[Jeremy]

We're doing pretty good here.

North Dakota oil production forecast to surpass Alaska's: Oil | adn.com


But we do need to do more nationaly.

 

[boedicca]

It's inane that we don't utilize our own resources while other countries are drilling off of our coasts.

 

[Modbert]

We want to get off of foreign oil, correct? Then why don't we drill here for it? I mean, within the U.S. (on land)?

We do. However, much like a drug addict, the U.S needs more smack to get their fix.

 

[Madeline]

We do, Zoom-boing.

United States Oil - production - Economy

We just consume far more than we produce.

 

[Modbert]

But we do need to do more nationaly.

Such as where? The problem with drilling for oil in the first place for companies is finding deposits large enough to be profitable. The same problem occurs with pretty much any similar resource including rare earth metals.

There is also the issue that a lot of people don't want oil drilling in their backyard. Instead of trying to find another vein to stick the needle in (land being the vein, needle being the oil drill), the U.S is better suited finding a real solution instead of just a temporary one that merely delays the inevitable.

Never mind the fact we already drill a lot more than people think.

 

[Modbert]

We do, Zoom-boing.

United States Oil - production - Economy

We just consume far more than we produce.

Some things to point out about those numbers:

We're already #3 in the world.

Take a look at the definition:

Definition: This entry is the total oil produced in barrels per day (bbl/day). The discrepancy between the amount of oil produced and/or imported and the amount consumed and/or exported is due to the omission of stock changes, refinery gains, and other complicating factors.

Unless I'm misreading that, it would be over 9 million barrels a day. There are 42 gallons of oil in a barrel of oil.

42 gallons x 9 million barrels = 378 million gallons of oil produced a day.

378 million gallons of oil a day x 365 days a year = 137,970,000,000 gallons produced a year. Almost 138 Billion. That's billion, not million.

 

[Modbert]

Another thing too, the U.S and the other two top countries (Saudi Arabia and Russia) are far ahead the rest of the pack.

Oil - production - Country Comparison

1 Saudi Arabia 11,000,000
2 Russia 9,870,000
3 United States 8,322,000
4 Iran 4,150,000

As reflected in CIA handbook updated numbers, the U.S is closing in on Russia for the #2 spot.

 

[Zoom-boing]

I asked because I saw this and wondered if we were drilling enough. Could we drill more here to really make a difference in our foreign oil dependence -- or make more of a difference? I realize this article is two years old. It just made me wonder is all.

3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate—

The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest "continuous" oil accumulation ever assessed by the USGS. A "continuous" oil accumulation means that the oil resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences. The next largest "continuous" oil accumulation in the U.S. is in the Austin Chalk of Texas and Louisiana, with an undiscovered estimate of 1.0 billions of barrels of technically recoverable oil.

USGS Release: 3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate— (4/10/2008 2:25:36 PM)

 

[Modbert]

Crude Oil FAQs - Energy Information Administration

In 2009, about 51% of the petroleum consumed by the United States was imported from foreign countries.

"Petroleum" includes crude oil and refined petroleum products like gasoline. About 77% of gross petroleum imports in 2009 were crude oil. About 63% of the crude oil processed in U.S. refineries was imported.

Now wait, 51% was imported from foreign countries. Let's go back to our previous numbers from 2009 shall we?

Unless I'm misreading that, it would be over 9 million barrels a day. There are 42 gallons of oil in a barrel of oil.

42 gallons x 9 million barrels = 378 million gallons of oil produced a day.

378 million gallons of oil a day x 365 days a year = 137,970,000,000 gallons produced a year. Almost 138 Billion. That's billion, not million.

Of course, we can't assume that we use every drop of oil that is drilled here and that it's not exported. However, what % could it be? Not very high.

Crude Oil FAQs - Energy Information Administration

Export of oil transported in the Trans-Alaska Pipeline System was banned until 1996. Between 1996 and 2004, a total of about 95.49 million barrels of crude oil, equal to 2.7% of Alaskan production during that period, was exported to foreign countries. As of September 2009, no Alaskan oil has been exported since 2004.

And according to the U.S Energy Information Administration:

In 2009, the United States consumed a total of 6.9 billion barrels of oil (refined petroleum products and biofuels), which was about 27% of total world oil consumption.

6.9 billion barrels (6,900,000,000) x 42 gallons a barrel = 289,800,000,000 Billion gallons of Oil used in the U.S per year.

 

[Modbert]

I asked because I saw this and wondered if we were drilling enough. Could we drill more here to really make a difference in our foreign oil dependence -- or make more of a difference? I realize this article is two years old. It just made me wonder is all.

3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate—

The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest "continuous" oil accumulation ever assessed by the USGS. A "continuous" oil accumulation means that the oil resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences. The next largest "continuous" oil accumulation in the U.S. is in the Austin Chalk of Texas and Louisiana, with an undiscovered estimate of 1.0 billions of barrels of technically recoverable oil.

USGS Release: 3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate— (4/10/2008 2:25:36 PM)

It is a really good question to ask. If you notice for a moment, your article discusses I believe the same thing Jeremy's does. However, let's take a step back and take a look at my post just before this. 3 to 4.3 billion barrels of Oil would not even last a year.

 

[Madeline]

It's the same with Alaskan oil, Zoom-boing. There are technological challenges to bringing this oil to the surface, and they drive up the costs. So far, the oil companies have not found all such reserves economically viable.

But even if all oil fields in the US were under production, it would not eliminate our dependence on foreign oil....and it would drive up our costs, as consumers, quite a bit.

 

[Zoom-boing]

It's the same with Alaskan oil, Zoom-boing. There are technological challenges to bringing this oil to the surface, and they drive up the costs. So far, the oil companies have not found all such reserves economically viable.

But even if all oil fields in the US were under production, it would not eliminate our dependence on foreign oil....and it would drive up our costs, as consumers, quite a bit.

But would it cut down (substantially) on our foreign oil dependence? If yes, wouldn't that be worth the higher cost? Hmmm . . . . .

 

[Zoom-boing]

I asked because I saw this and wondered if we were drilling enough. Could we drill more here to really make a difference in our foreign oil dependence -- or make more of a difference? I realize this article is two years old. It just made me wonder is all.

3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate—

The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest "continuous" oil accumulation ever assessed by the USGS. A "continuous" oil accumulation means that the oil resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences. The next largest "continuous" oil accumulation in the U.S. is in the Austin Chalk of Texas and Louisiana, with an undiscovered estimate of 1.0 billions of barrels of technically recoverable oil.

USGS Release: 3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate— (4/10/2008 2:25:36 PM)

It is a really good question to ask. If you notice for a moment, your article discusses I believe the same thing Jeremy's does. However, let's take a step back and take a look at my post just before this. 3 to 4.3 billion barrels of Oil would not even last a year.

When I read that it sounded like a lot to me. After reading your numbers . . not so much.

If we had more oil coming from the U.S. used in the U.S. (rather than exported), wouldn't it be worth the cost/expense of extracting it?

 

[Madeline]

Some think so. There are also environmental concerns where the Alaskan oil fields are concerned.....and that may be true of the others as well; I don't know.

But remember, this would deplete these fields....it's a short term solution at a high cost.

 

[Modbert]

It's the same with Alaskan oil, Zoom-boing. There are technological challenges to bringing this oil to the surface, and they drive up the costs. So far, the oil companies have not found all such reserves economically viable.

But even if all oil fields in the US were under production, it would not eliminate our dependence on foreign oil....and it would drive up our costs, as consumers, quite a bit.

It has gotten to the point that companies like ExxonMobil are drilling in the arctic waters of Canada:

Canada: Exxon, BP and Imperial Oil form joint venture to explore Canada's Beaufort Sea

Exxon and Imperial acquired the Ajurak lease for nearly $600 million in 2007, and BP acquired the Pokak lease as part of a package of other Arctic assets in 2008. Both companies have conducted 3D seismic surveys, but haven't done any exploratory drilling of the sites yet.

Exxon and Imperial will each hold a 25% share in the joint venture and will be in charge of the operations; BP will hold the remaining 50% share.

Of course, one of the major problems being even be able to get crews up there in workable conditions. Never mind being able to drill.

Another interesting tidbit that this article does mention is that Imperial Oil (Canada's biggest Oil supplier) is also a subsidiary of ExxonMobil.

I did a paper on ExxonMobil this past semester. The short term is going to be great for a company like ExxonMobil. However, the long term future is oil is not quite what many are saying. This is why ExxonMobil has not only recently become the world's largest natural gas company (again) but are also making investments into petrochemicals in countries such as Qatar. They're currently working on a $6 billion complex there and diversifying their investments. Qatar is also home to four of the world's largest plants for LNG projects and crucial to ExxonMobil.

Another thing to note is that ExxonMobil and other oil companies have been and will continue to deal with is oil-rich countries which are not stable. Further resulting in price increases for oil.

CBC News - World - 7 oil workers kidnapped, Nigerian rebels say

From November:

The main militant group in Nigeria's oil-rich southern delta said Tuesday it kidnapped seven local workers from an Exxon Mobil Corp. offshore rig and promised new violence in a region vital to U.S. oil supplies.

The hostage claim came as a military spokesman said soldiers had begun an operation to fight militants hiding in the region.

Such raids, as well as the possibility of new militant attacks, could hurt the OPEC-member nation just as its oil production appears to be reaching levels seen before the insurgency began four year ago.

This is a very complex issue and people suggesting that drilling for more oil is the solution to our problems are ignoring a larger and deeper issue at hand here.

 

[ScienceRocks]

The reason that we don't Drill is because we are trying to ban co2 from going to the Atmosphere. That is what Obama is doing.

 

[Modbert]

When I read that it sounded like a lot to me. After reading your numbers . . not so much.

If we had more oil coming from the U.S. used in the U.S. (rather than exported), wouldn't it be worth the cost/expense of extracting it?

And that's the key thing to note here. 4.3 billion barrels sounds like a lot until you look at how much we use a year. Never mind barrels but also stepping back and looking at how many gallons. Gallons is a useful indicator considering that is how gas stations gauge oil use instead of in barrels for the general public.

The problem with getting more oil coming from the U.S is that other countries are willing to pay for that oil. Often, more then we are. China and India alone are driving up the need for more oil. Think about what would happen if China and India became like the U.S (it's already on it's way) in terms of oil usage within the next ten years. Think about what that would do for not only the U.S but for the world when it comes to oil prices and oil supply. Oil is not a renewable energy, one day, we will run out. At the going rate, it will be sooner rather than later.

In my opinion, I see the U.S response being like the rest of the world's as it was with the rare earth metal problem. In short summary, China had a monopoly on rare earth metals (used just about everything ranging from fighter jets to cell phones) due to driving out the competition by undercutting prices years prior. U.S and other countries did nothing about it until it was realized last year that China itself is going to run out by about 2013-2015 and has proceeded to cut off other countries including the U.S.

Now, think about the impact that would have if we could no longer use rare earth metals? All various types of industry would take a new hit as time is spent trying frantically to find a replacement as Japan is finally doing so.

However, now, U.S companies are finally getting back into mining for rare earth metals. Why? Because the supply is so low and the demand is so high that it's worth the cost and risk of being undercut by China again.

If you're interested in reading more about that, here's a previous thread of mine about it:

http://www.usmessageboard.com/economy/147555-undermining-chinas-monopoly-on-rare-earth-elements.html

There are others as well.

 

[Modbert]

The reason that we don't Drill is because we are trying to ban co2 from going to the Atmosphere. That is what Obama is doing.

Except, we're the #3 country in the world in terms of production of barrels drilled. Reality does not match your post.

 

[Zoom-boing]

Some think so. There are also environmental concerns where the Alaskan oil fields are concerned.....and that may be true of the others as well; I don't know.

But remember, this would deplete these fields....it's a short term solution at a high cost.

How long would it take for them to be depleted?