The Truth about Offshore Oil Drilling
04 Aug 08 | Commentary, Conservation, EnvironmentYou have been hearing all sorts of things about drilling for oil offshore. The White House insists that it is the answer to at least some of our energy problems. Various news organizations have put out some interesting, if not slightly contrary and confusing stories on the subject.
I thought I’d boil it down to U.S. product vs. U.S. consumption.
Oil is a world wide market commodity, which means just because it was produced in the U.S. doesn’t mean it will be used here. Think of it as a huge jug with a bunch of straws stuck in it. Everyone sucks out what they need and then pays for it. That being said, I am going to analyze this as if it where only a U.S. problem, e.g. all oil produced, including the new offshore oil, will only be used in the U.S.
The offshore oil facts:
- The U.S. Department of Energy (DOE) proven non-producing reserves are 5.2 billion barrels (5,147,000,000) of oil. Some estimates show about 18 billion barrels (18,000,000,000) of recoverable oil in the offshore areas currently closed to drilling. Other estimates are much higher, about 78 billion barrels. For sake of argument, we will use The President’s numbers (18 billion).
- The U.S. currently uses 20.68 million barrels (20,680,000) of oil per day. This is projected to rise at 1.4% per year (source: DOE).
- The U.S. currently produces 5.064 million barrels (5,064,000) of oil per day. This is decreasing by about 1% per year (source: DOE)
- At current use rates, drilling in the offshore areas currently closed would provide about 2.4 years of oil (18,000,000,000 bl ÷ 20,680,000 bl/day = 870.4 days or 2.4 years ).
- It will take at least 10 years to bring the first oil well on line, by that time we will be using 23.77 million barrels per day and producing 4.58 million barrels per day. By this math, the new reserve could supply 938 days (18,000,000,000 bl ÷ (23,770,000 bl/day - 4,580,000 bl/day = 19,190,000 bl/day) = 938 days) or ~2.6 years of oil including current production.
Any way you slice it, clearly we have a problem. Drilling in offshore areas will give us 2.6 years of oil. The Arctic National Wildlife Refuge (ANWR) is though to contain about 10.4 billion barrels of oil. If drilling were allowed there, it would add 503 days (~1.4 years) to our oil supply.
Thus, the total Bush energy plan would add ~4 years of crude oil to our dwindling supply. Clearly not a long term plan. Even if we allow for reduced consumption due to higher prices, the outlook does not look good. During the first part of 2008, gasoline usage dropped by 1% over the same period in 2007. Overall demand for light sweat crude fell by about the same amount. For all the hullabaloo about high prices, not much of a dent.
Start thinking about this, plan ahead and be prepared. Perhaps nothing bad will happen, perhaps somehow energy use will be properly managed and everything will be okay…
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Tags: energy costs, peak oil
It’s about energy, Stupid.
25 Nov 07 | Commentary, ConservationRemember when Bill Clinton ran against George H. W. Bush (Aka Bush senior)? He had this sign that he hung in his campaign headquarters that read “It’s about the economy, Stupid.” It was a sort of reminder of what the important issue of the day was for most Americans, plus it sort of chided the opponent at the same time.
This time around, we are dealing with a more fundamental issue: Energy. We need energy, as a society. We need energy as a species. We will die without energy. Energy produces food, clothing, housing, warmth from the cold, employment, communication, commerce, entertainment, and in reality, society itself. Without a source of energy, the world as we know it, will end.
There are several things that can be done. First of all, federal, state, and local politicians need to be made aware of the situation. This means becoming active, registering to vote and becoming active in all elections. The internet is a wonderful thing. There is a lot of information on how your US or State representatives or senators have voted at Project Vote Smart. This is a great way to keep an eye on what your representatives are doing. The next greatest thing about the internet is e-mail. Anytime your representative does something you don’t like, let them know. If you are a registered voter, your e-mail will be read by somebody. Finally, one more great thing about the internet, you can find all the contact information for your representatives including local phone numbers, local office locations, etc.
All of this is important, as we need to keep hammering away at the US congress in particular to change the energy course of this country. Further more, talking about this issue among family and friends without being too obnoxious will help to push the issue along.
If we run out of food or clean water, nothing else matters.
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Tags: Commentary, Environment, peak oil, politics
Peak Oil
18 Oct 07 | CommentaryAh, ehm. Not to be an alarmist or anything, but have you seen the price of oil lately? West Texas crude was selling at $90.00 per barrel today. That’s higher than the post Hurricane Katrina levels when a gallon of gas was $3.60. The price of gas today? Oh, $2.86 per gallon, which I find strange. Does this mean there was massive gouging after Hurricane Katrina? I dunno, but it seems likely.
The reasons for today’s rise is the weakening dollar, which has caused speculators from other countries to buy oil with cheap with hope to sell higher when the dollar rebounds. This has created a supply squeeze, which has made priced go up. Most of this seems like market manipulation of one form or another, which is to be expected as lots and lots of money can be made.

There are many dire predictions about Peak Oil and the end of cheap energy. Most see some form of resource competition or conflict, which I believe is already taking place in Iraq. Additionally, a general rise in prices across the board as fossil fuels supply the energy and raw materials for almost everything we depend on. Fortunately, the world will not simply run out of oil. The production of oil is based on a bell curve, that shows a steady predicable decline. That is if the geologists are right about the oil reserves, and countries and governments are telling the truth about the amount of oil still in the ground. There may indeed be some very turbulent times, but I do not think it will be the end of the world as we know it. That is, provided we begin to plan now.
There are many on the political right that pooh-pooh peak oil and the notion that we need to start moving away from fossil fuel use. These will cite all sorts of reasons why it is not a concern, we need not worry about the environment and so on. That is an imprudent course of action. Unfortunately, many of these are in the military or defense contractor sectors. Often as is the case, these types think that a strong defense will keep any and all harm away from them or the country. This is a mistake that has played out time and time again though history; Think of Greece, Rome, etc.
Right now, there exists an opportunity to take a huge step in the right direction. The US congress (House and Senate) are trying to compromise on the 2007 energy bill. This bill has a lot of great things for the renewable energy sector. It needs to pass both houses of congress with a veto proof majority, otherwise the President will veto it and we will be back to square one again. If you have a chance, contact your Senator or Representative and let them know how important it is to move ahead with renewable energy. There are two websites that make it easy. The first is SaveOurEnvironment.org and the other is Solar Nation. Both sites have online forms that can be filled out and emailed directly to your Senator and Representative.
Regardless of any of that, the more expensive oil and natural gas become, the more attractive renewable energy systems will become. This will be good for those involved in the renewable energy sector as more and more people turn to things like solar and small wind to meet there energy needs.
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Tags: Environment, peak oil










































