President Obama announced back in late March his desire to drill offshore, “But the bottom line is this: given our energy needs, in order to sustain economic growth and produce jobs and keep our businesses competitive, we are going to need to harness traditional sources of fuel, even as we ramp up production of new sources of renewable, homegrown energy.”
But will it ease oil prices? When? Not today and not tomorrow…maybe never.
The U.S. Energy Information Administration (EIA) did a detailed study of the likely outcome of offshore drilling for their Annual Energy Outlook 2007, “Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf (OCS).”
The conclusion:
“The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017….Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.”
According to the Energy Information Administration in 2007, lifting the bans might boost the nation's oil production by 1 or 2 million barrels a day by sometime next decade.
Now, in 2010, they say, “In the short term, a vast majority of the increase [in US oil production] comes from deepwater offshore fields.” “In 2035, U.S. crude oil production includes 0.4 million barrels per day from the Pacific offshore, 0.2 million from the Atlantic offshore, and 0.1 million from the Eastern Gulf of Mexico.”
That’s just 700,000 barrels, about 45 minutes worth of oil for the US each day.
What about ANWR? (Arctic National Wildlife Refuge) How much oil is there?
95% Probability 5.7 billion bbls = .5 mbpd
Mean (Expected)10.3 billion bbls = .9 mbpd
5% Probability 16.0 billion bbls = 1.9 mbpd
EIA estimates that if Alaska's Arctic National Wildlife Refuge were opened for drilling tomorrow, oil wouldn't flow at full production until almost 2030 at .9 mbpd.
By 2035, the US is projected to consume 22 mbpd. Today, we consume 20 mbpd.
22 mbpd divided by 24 hours = .9 mbph
.9 mbpd is 100% of one daily hour US demand
Conclusion: ANWR would power the US for 1 hour/day, the rest would have to be imported or come from existing fields.
US oil production has been in terminal decline since 1971 from a height of 9.6 mbpd to about 5.5 mbpd in 2010. Even the discovery of oil in Alaska in the 1980’s was unable to reverse this decline. With C02 EOR from on-shore wells, the EIA projects 6 mbpd by 2035.
“Over the longer term, production from the continued development of other recent discoveries, as well as new discoveries, offsets production declines in older fields, resulting in an increase in production through 2035.” --EIA
I don’t think we can drill our way out of this oil crisis. I posit that all of the EIA forecasts for 2035 are likely high. Since 2000, oil companies working in the U.S. have doubled the number of wells drilled per year. Although increased drilling has added new oil to the nation's supply, it has not done so fast enough to offset the terminal decline of existing fields.
We lose approximately 1.25 mbpd of US production every 10 years, due to terminal decline of existing fields.
According to the EIA, “U.S. dependence on imported liquids, measured as a share of total U.S. liquids use, is expected to continue declining over the projection period, from the high-water mark of 60 percent, attained in 2005 and 2006, to 45 percent in 2035.” “The projected growth in energy imports is moderated by increased use of biofuels (much of which are produced domestically), demand reductions resulting from new efficiency standards, rapid improvement in the efficiency of appliances, and higher energy prices.”
Biofools? The biofuel mandate for 2010 was 100,000,000 gallons, which has been reduced to 6,500,000 gallons (< 10% of the original), because they just couldn’t do it, both economically and with a positive enough EROEI.
With the low or negative EROEI of biofuels and Jevons’ Paradox, I still think we are going to have to import more of our oil, barring another economic collapse from “higher prices.”
Note: This is an update from a thread I wrote some years back. With the gulf spill at hand, I thought a revisit was in order. Lots of numbers. Hope I got them right.
