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Posts Tagged ‘arctic’

Arctic oil and gas bonanza

Posted by Richard on June 3, 2009

The American Association of Petroleum Geologists is meeting in Denver next week. One of the featured sessions looks at a recent re-appraisal of arctic oil and gas potential that significantly increased previous estimates:

The session will be co-chaired by Don Gautier and David Houseknecht, both with the U.S. Geological Survey, and will follow-up on a USGS report released in late May that said 30 percent of the world's undiscovered gas and 13 percent of its undiscovered oil are estimated to be located north of the Arctic Circle.

The study, presented by Gautier and colleagues, is the first detailed, peer-reviewed and geologically based assessment of natural resources in that region. Most of the undiscovered oil and gas will be found underwater, on continental shelves, the researchers said.

The USGS study was recently published in Science magazine, but is only available for free to AAAS members/subscribers. There's a brief overview (heavy on concern for the poor creatures of the Arctic and somewhat dismissive of the value to us humans) at ScienceNow

Some of the richest Arctic oil fields are likely to be off the Alaskan coast in the Bering, Beaufort, and Chukchi Seas. A lease auction last year in the Chukchi area brought in over $2.6 billion. Many of the promising parcels there are comparable in size to the North Slope field (Prudhoe Bay) that's fed over 15 billion barrels of oil down the Trans-Alaska Pipeline in the past 30 years. 

Unfortunately, on April 17, a three-judge panel of the D.C. Appeals Court vacated the Alaskan leasing program and ordered the Interior Dept. to "conduct a more complete comparative analysis of the environmental sensitivity of different areas…" Fortunately, the ruling was fairly narrow, and the court dismissed plaintiffs' arguments that Interior needed to consider the "climate change" impact of burning any oil found. Interior Secretary Salazar is at least giving the impression that he wants to "move forward and fix the shortcomings," not scrap Alaskan offshore development completely. No suggestion that they might appeal, though. I suspect he's delighted by the ruling and won't seriously try to reverse it.

With oil (and gas) prices on the rise again, it's high time the government stopped standing in the way of increased domestic oil production. That's especially true in the Alaskan Arctic, where — as Investor's Business Daily pointed out — if we don't go after those resources, others will:

It ought to be reassuring to Americans that energy can be developed here. Americans are environmentally conscious, and Palin herself has a good record on balancing development with ecology.

The alternative isn't reassuring: If we don't drill, the Russians will. Situated over on the eastern end of the Chukchi Sea, they have global ambitions of dominating the energy trade and no qualms about muscling in on the U.S.

Drill Chukchi. Drill now. Pay less.  

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Drilling in the suburbs

Posted by Richard on August 5, 2008

In Colorado, environmentalists are suing to stop oil and gas drilling, Gov. Ritter and the Democratic legislature are pushing for tight restrictions on the industry, and residents in some areas are complaining about the despoiling of their land and poisoning of their water.

And yet, Texans somehow have figured out that gas wells can coexist with upscale suburban neighborhoods. Maybe Texans are a lot smarter than Coloradans (or Congress). Or maybe they're just more immune to environmental hysteria: 

In the 1980s, Houston wildcatter George Mitchell drilled the first well into the Barnett Shale formation that stretches through north and central Texas. He tapped into what would turn out to be one of the largest onshore natural gas reserves in the United States.

It would take nearly two decades and millions of dollars to develop the horizontal, hydraulic technology necessary to bring that gas to the surface. But today there are about 7,500 gas wells in the Barnett Shale — many located in the city limits of Fort Worth, and some a stone's throw from suburban homes and schools.

If there is an energy crisis in this country, it is because too many states and too many lawmakers in Washington are too timid about allowing entrepreneurs to bring to the surface what is buried right below us. In Texas, we're not timid. …

What I've seen is that while Congress balks at drilling in the Arctic National Wildlife Refuge in Alaska out of fear of disturbing a few caribou, we've moved ahead to safely tap into an energy reserve located underneath suburban homes. And there is no better example of how Texas gets the balance right between energy and the environment than the development of the Barnett Shale.

As for the ANWR caribou, I suspect they'd be no more disturbed by a few wells than the residents of suburban Ft. Worth. The caribou around nearby Prudhoe Bay certainly aren't:

Caribou at Prudhoe Bay

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Oil in abundance

Posted by Richard on July 26, 2008

On Wednesday, the U.S. Geological Survey released a petroleum resource appraisal for the Arctic region that estimated it contains 90 billion barrels of recoverable oil, 1.6 trillion cubic feet of natural gas, and 44 billion barrels of natural gas liquids (PDF factsheet). At least a third of the oil is under U.S. territory (Arctic Alaska).

Investor's Business Daily put this study into perspective by noting that:

the U.S. "official" estimate for total oil reserves is 21 billion barrels. So by putting our Arctic resources into play, we would more than double our reserves overnight.

What's more, there could be more oil up there — much more — according to Donald Gautier, who wrote the report.

"Most of the Arctic, especially offshore, is essentially unexplored with respect to petroleum," Gautier said. "The extensive Arctic continental shelves may constitute the geographically largest unexplored prospective area for petroleum remaining on Earth."

That phrase stuck in our mind — "essentially unexplored." How much of the rest of the U.S., including the oil we have offshore, is likewise "essentially unexplored"? And this study only counted oil that could be retrieved using current technologies. So Arctic reserves may ultimately prove to be much larger.

IIRC, at Prudhoe Bay we've already pumped several times as much oil as the original estimate. 

Let's put this in perspective. That 90 billion barrels of Arctic crude is enough to run the entire world economy for three years. And it could fuel the U.S. alone for 12 years.

Using a conservative estimate, let's say we pump 3 million barrels a day after developing these Arctic resources. That would boost total U.S. crude output of 8 million barrels a day by 38%. It would shrink the trade deficit, saving us roughly $137 billion a year in money we now send to Mideast and South American oil potentates, some of whom use the money to train and equip terrorists.

This latest report, by the way, means there are now about 938 billion barrels of oil available for us to take from the Outer Continental Shelf, Alaska and shale-rock formations in the West, based on current technologies and prices of less than $100 a barrel.

That's a century's worth of oil. But the Democrats won't let us drill. And Al Gore wants to leave it in the ground forever, destroying our economy in order to abandon fossil fuels in a decade (an utter pipe dream). 

In a rare instance of unanimity and cojones, on Friday Senate Republicans (sans Olympia Snow and Susan Collins, who understandably have no cojones) blocked Harry Reid's attempt to push through an "energy bill" that does nothing to increase energy supplies. Now the question is: will Congress take meaningful action before their August vacation?

Keep the pressure on — sign those petitions and send those faxes (I chose the $50 fax option, so I'm not asking you to do anything I haven't done).

Drill here, drill now. Let us drill, dammit! 

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