From the extreme left-leaning pages of the Washington Post to the decidedly conservative website RedState, to this network, all who deal in the facts of America’s oil resources, reserves, production, etc. all agree that America has far more oil than is being presented by the leftist media and the extreme, radical leftist Obama Regime.
Even the ‘progressive’ U.S. Senator Lisa Murkowski, who we tried unsuccessfully to remove from office last year, agrees that America has HUNDREDS OF BILLIONS of barrels of oil, PLUS around a TRILLION barrels of unconventional oil resources. Here are the facts, as presented by the Washington Post, the Washington Times, and RedState:
By Lisa Murkowski, Published: April 21, 2011
With gasoline prices in many areas above $4 a gallon, energy concerns are once again making headlines. Prices have more than doubled since the start of 2009 and are projected to remain at excruciating levels for the foreseeable future.
We know from experience that high energy prices harm American families and businesses. Aside from pain at the pump, it’s harder to balance budgets or even buy groceries when transportation costs soar. Many experts have concluded that if prices remain high, economic growth will languish. At stake is our fragile recovery from the recent recession.
High energy prices therefore demand a strong policy response. For years, however, federal lawmakers have routinely ignored the supply side of the equation and the fact that — if we chose to — we could absolutely produce more oil here in America.
For that reason, I welcomed President Obama’s recent pledge to increase domestic production. It was a big step, and I hope his administration heeds the message. But I’m also deeply concerned by some of the information presented about America’s energy potential. Left unchallenged, it will contribute to a mistaken belief that increased domestic production is not truly possible.
The president said this month that “even if we doubled the amount of oil that we produced, we’d still be short by a factor of five.” That’s simply incorrect. Doubling our production would trim imports nearly in half. Boosting production by a factor of five is not currently feasible, but if it were, it would make the United States the world’s largest producer.
Perhaps most misleading is his claim — also made by others — that the United States has “about 2, maybe 3 percent of the world’s proven oil reserves; we use 25 percent of the world’s oil.” That line is crafted to make the audience think that America is both running out of oil and using oil at an unsustainable rate.
In truth, “reserves” is just one of several categories used to quantify oil and, on its own, misrepresents America’s potential. To classify a barrel as a reserve, you have to drill, prove the oil is there, and meet strict criteria established by the Securities and Exchange Commission. It’s not an easy process.
Right now, America has an estimated 22.3 billion barrels of oil reserves. But that’s hardly the whole story. A recent Congressional Research Service report that I commissioned with Sen. Jim Inhofe of Oklahoma found that the United States’ recoverable oil resources are estimated at 157 billion barrels. That is seven times as much as our reserves and doesn’t even include the roughly 900 billion barrels of unconventional oil resources nearing commercialization.
Consider this: While our nation’s oil “reserves” have never reached 40 billion barrels, we’ve managed to produce nearly 200 billion barrels since 1900. Between 2008 and 2009, America’s oil reserves rose more than 8 percent, even as roughly 2 billion barrels were produced. That was made possible by our substantial resource base. Reserves alone have never provided the full picture.
Those who repeat the 2 percent argument are falling into an old trap. Government officials have claimed since 1919 that America is “running out of oil.” Nearly a century later, we are still the world’s third-largest oil producer, behind Saudi Arabia and Russia. Our consumption levels may seem high, but in fact they’re directly proportionate to America’s share of the global, petroleum-based economy.
Relying on reserves to depict America’s oil excludes all of the lands that have never been explored. My home state of Alaska, for example, holds an estimated 40 billion barrels of oil — the equivalent of more than 60 years’ worth of imports from the Persian Gulf — that are excluded from reserve figures. Ignoring that supply underestimates America’s oil and leads us away from one of the best solutions to our various energy challenges.
If our country endeavored to produce more oil, we could slash imports and stanch the flow of dollars sent to foreign suppliers. At the same time, we could create thousands of jobs in this country and generate hundreds of billions of dollars in government revenue.
In this era of fiscal restraint, our most effective energy strategy may be to have oil work itself out of a job by using revenue from production to facilitate the deployment of alternatives. A firm commitment to greater production and lower consumption would also send a message to OPEC that the United States will no longer tolerate high oil prices.
It’s time to acknowledge how much oil America really has — and expeditiously bring more of it to market.
THE TRUTH BEHIND ALL THAT ‘THE U.S. HAS ONLY 2% OF THE WORLD’S OIL RESERVES’ MALARKEY.
Posted by Steve Maley | Tuesday, May 10th at 7:00AM EDT
Your President has been telling you things that simply aren’t true. Things like “We can’t drill our way out of our energy problems.” Or “Oil and gas are the fuels of the past.” Or, perhaps worst of all, “The U.S. consumes 25% of the world’s oil, but controls only 2% of the world’s reserves.”
Well, that last one may be technically true, but it is used to convey the false notion that to strive for energy security is an exercise in futility. In a post called The Big Energy Lie (Dec. ‘09), I attempted to explain the deception. In this post, I’ll attempt to demonstrate, in layman’s language, using graphs based on the government’s own data.
KEY CONCEPT #1: “Reserves” are not “Inventory”
This graph depicts the history of U.S. oil reserves and production over the last 25 years. In 1986, reserves were estimated to be nearly 27 billion barrels. In 1986, we produced 8.7 million barrels a day, or an annual total of 3.2 billion* barrels. The ratio of reserves to production is 8.5 years — often incorrectly reported in the press with alarm:“We have only 8.5 years of reserves left! We’re running out of oil!”
If this were true, we’d have run slap out of oil in 1995. The dashed line on the graph shows the cumulative amount of oil produced since 1986. Sure enough, by 1995 we had produced over 27 billion barrels, and we still had reserves in the ground of over 22 billion barrels.
Fast forward to 2010: we’re still producing 2 billion barrels a year, and we still have over 20 billion barrels in the ground. In fact, we’ve produced 58 billion barrels since 1986, over twice the 1986 reserve total.
Well, not really.
Imagine if you managed a shoe store. On January 1, inventory shows you have 10,000 pairs of shoes on hand, and you sell 500 pairs per day. Would you forecast that you would be completely out of shoes in 20 days?
Only if you can’t replenish supply. (Or if you’re a former community organizer really crappy manager.)
In oil and gas, reserves are replenished by drilling new wells. (Reserves can be added other ways, too, but the ultimate key is drilling.) By drilling, “resources” are upgraded to the much more restrictive and valuable category “reserves”. And the U.S. has plenty of resources to draw from. We should be encouraged by the fact that, even with a period of persistently low product prices and relatively low drilling activity from 1986 to 2004, the reserve base has only declined by a little over 20% in 25 years.
KEY CONCEPT #2: “Reserves” are only estimates.
Oil and gas reserves often cannot be estimated with a great deal of precision. Even if the recoverable quantity were known accurately, by definition reserves must be economic to produce. That means that changing economic conditions (especially changes in oil and gas prices) will effect the estimated reserve quantity. When prices are higher, wells can be produced that would otherwise be plugged.
Bottom line, reserve estimates change all the time.
The dark green bars show the rate of oil production over the 25 years. The gold bars show the year to year change in reserves. Production causes reserves to decrease, but new additions from drilling can offset production. Reserves can also be revised — up or down — due to geologic and engineering studies, or changes in economics as described above.
One more graph — the “Reserve Life Index”, or Reserves to Production Ratio. We saw that it is often misinterpreted to represent how many years of production remain. Our national R/P ratio has grown over the last 25 years, perhaps a reflection of better technology or higher prices.
There you have it. Our relatively low reserve number is not an indication that “we’re running out of oil!”, it’s merely a wake-up call that we need to get busy and shore up our domestic supplies. The only thing we are running low on is the political will to do it.
Data source: Energy Information Administration
OBAMA’S ENERGY POLICIES HIT HARDEST BELOW THE POVERTY BELT
By Richard W. Rahn | The Washington Times | 5:31 p.m., Monday, February 28, 2011
The Obama administration’s policies are causing Americans to pay far more for gasoline and other fuels than necessary. America is awash in fossil-fuel energy sources with almost 30 percent of the world’s coal and 80 percent of the world’s oil shale – which contains an estimated three times the recoverable oil reserves of Saudi Arabia. Canada, with its oil sands, has the world’s third-highest oil reserves, after the United States and Saudi Arabia. New technologies that enable low-cost natural gas production from shale mean that many countries, including the United States, will have gas for centuries at current production rates.
Fossil fuels at some prices are interchangeable. Coal, gas and oil can all fuel electric power plants. Liquid motor fuels can be made easily from natural gas, and, in fact, many auto, truck and bus fleets already use natural gas. For more than 70 years, the technology has been available to turn coal into liquid motor fuel.
Natural gas now sells in the United States for a British thermal unit (BTU) equivalent of $30 a barrel of oil, and coal sells at roughly half that price. Much of the Canadian oil sands, U.S. domestic oil shale and offshore oil in the Gulf of Mexico can be produced at prices well below $75 per barrel. The United States should be an energy exporter; Canada already is and is the single biggest source of oil for the U.S.
Most countries try to produce oil, gas and coal and sell it on the global market as a way of increasing the real incomes of their citizens, but not the United States. The Obama administration has a hatred of fossil fuels and is determined to reduce their use despite the economic damage. So-called green energy often is not very green and cannot possibly serve as a substitute for most fossil fuels. Windmills and solar panels are far more expensive than coal and gas; their production is intermittent, unreliable and largely unstorable. Because of the physics of the electrical grid, wind and solar can never produce more than about 18 percent of electrical production – at least not until low-cost storage devices are developed. Many biofuels, and in particular corn-based ethanol, are not only more expensive than the natural fuels but have a bigger total ‘carbon footprint.’
The Obamaites believe carbon dioxide (CO2) is evil because they think more of it will cause global warming. They ignore the facts:
c Earth has been at times in the past both cooler and warmer with higher concentrations of CO2.
c Other factors, such as sunspot activity, are more important than CO2 in determining Earth’s temperature.
c Scientists are in the process of finding new commercial uses for CO2 and are experimenting with the use of biological agents to turn CO2 back into a useful fuel. CO2 always has been part of our atmosphere and is necessary for plants to grow.
Just think for a moment of all the scientific advances that have been made during the past century. There is every reason to think that long before fossil fuels become truly scarce – meaning that their extraction cost begins to rise rapidly – mankind will have come up with cheaper and better energy sources and will have figured out what to do with excess CO2 if it really does prove to be a problem. For at least 100 years, “experts” have been saying we will soon run out of oil, but we are still finding more oil and gas than we have been producing in recent years. It makes no sense for the United States to hobble itself with less and more costly energy while much of the rest of the world is greatly increasing its use of fossil fuels. Both India and China have found huge new deposits of natural gas in recent weeks. Are they going to say to their still-poor populations, “We will not use this gas to better your lives”? Of course not. The Brazilians are about to enter the ranks of major oil producers. Are their leaders going to say to the people, “You may not have the benefits of these new oil discoveries”? Of course not.
Meanwhile, the Obama administration has stopped the new oil-production process in the Gulf of Mexico, even in the face of a court order requiring it to issue permits. The administration, through executive orders, has denied oil and gas producers access to millions of acres where large deposits of oil and gas are known to exist. The administration also is holding up permits for many new power plants, pipelines and industrial plants, all of which are costing Americans jobs and driving businesses to other countries.
It is not unnoticed that the president is demanding that businesses create more jobs while at the same time denying them the ability to do so because of his environmental, energy and regulatory policies. It also is not unnoticed that the bureaucrats and officials in Washington who are so keen on killing job opportunities for those in the productive sector keep theirs. And, it is not unnoticed that people within the Obama administration and Congress are deliberately and unnecessarily making millions of the lowest-income Americans even poorer.
Posted by Steve Maley | Thursday, December 17th at 12:24AM EST
The Big Energy Lie goes something like this:
The United States has only 2-3% of the world’s oil reserves, but consumes 25% of global production.
Those words have been uttered by our Dear Leader as well as his Secretaries of Energy and Interior. The idea justifies “progressive” Administration policies ranging from “green jobs” to Cap and Trade to foreign affairs.
And they are deliberately designed to mislead.
Let’s study the fraction that results in that paltry 2-3% number.
The Numerator – U.S. Reserves
Geologists and engineers make estimates of petroleum resources, the total potential future recoverable quantity of oil and/or gas. Right now, the U.S. has considerable potential resources in places like the Outer Continental Shelf, ANWR and the Colorado Oil Shale. Reserves, on the other hand, is the term applied to that subset of resources that have been proven to exist by drilling and can be recovered with existing technology. Since we’ve made a policy decision to keep ANWR and 85% of the OCS pristine, those resources will never be “promoted” to reservestatus. Until and unless someone figures out a way to exploit the oil shale profitably (and secures the blessings of the sate and the Feds), those resources will not be counted as reserves, either.
(I don’t know the numbers off the top of my head for oil, but for gas, the U.S. has reserves on the order of 200 trillion cubic feet, and annual production of roughly 20 trillion cubic feet. Natural gas resources are about 2,000 trillion cubic feet. Every year, if things go right, we should drill enough new wells to turn resources into reserves to replace production. And at the current rate of gas production, we’ll be able to do this for another 100 years or so.)
As an analogy, imagine a multi-millionaire who owns lots of illiquid assets — houses, cars and boats — but only has $250 in his checking account. Do we consider him poor? Reserves are analogous to ready cash; resources are akin to total assets. Our example millionaire is cash poor by his choice; the U.S is relatively reserve-poor because we, as a nation, have decided not to fully exploit our resources.
Another factor — U.S. public companies must report their estimates of reserves to shareholders and to the Securities Exchange Commission. Almost all companies undergo a thorough audit of their estimates by third party engineers at least once a year. These reserve estimates tend to be conservative in nature as the companies prefer to avoid the bad press associated with reserve writedowns.
So we have a fraction with a numerator that is skewed to the small side — for several reasons.
The Denominator – Global Reserves
Here, the concept is the same, but the effect is different.
Some 70% to 80% of Global Reserves are owned by NOCs — state owned National Oil Companies (see table below). The regimes that control these reserves have zero transparency in reporting. They have an incentive to lie aggressively represent the reserves they own. Most of them use the cash from oil to support their populations with generous welfare, subsidies and social programs. Bigger reserves mean that they’re more stable internally and more powerful geopolitically.
So we have a fraction with a denominator that is probably an artificially large number — for several reasons.
And, dividing a small numerator by a large denominator gives a tiny fraction. So tiny that it implies that the country’s domestic energy situation is hopeless; furthermore, we cannot reasonably expect it to be otherwise.
It’s a giant lie.
With expert John Hofmeister, the Founder and CEO, Citizen’s For Affordable Energy
Attached are documents shared by Milton (John) Estabrooks at the Song of Truth that lay out an energy policy for America. Congress has failed for over 30 years to provide an effective domestic energy policy. It is time for action by citizens to demand Congress step up. Estabrooks has worked in the energy business for 37 years. These documents are supported by some 6 months of effort. Please take the time to read and share the action steps.