As I am sure you have read or heard somewhere, "the world is running out of oil" and we're all doomed. Unless we can figure out how to run our cars on soy sauce, it's back to the bicycle and horses.
Well, not quite. Here's what a U.S. Energy Information Administration 2002 report had to say, "At year-2000 consumption rates, the world has many thousands of years of crude oil and crude oil substitutes (heavy oil, oil sands, and oil shale) remaining."
When people tell me that America is too dependent on foreign oil imports, I keep telling them we have lots of oil, but thanks to the environmentalists, our own government has made it either too costly to get at it or access has been restricted because the bulk of our undeveloped energy resources is found on federal lands or federally controlled areas offshore. This is what happens when the federal government owns nearly half the landmass of the nation.
Myths about oil are constantly repeated by the mainstream media. The truth, however, is available from open sources such as a U.S. Geological Survey that estimates the United States has almost 175 billion barrels of oil reserves. The survey cites 21.9 billion barrels of known oil reserves and an estimated 150 billion of "undiscovered" reserves.
Why wouldn't Big Oil go elsewhere to tap known or newly discovered oil reserves when faced with a government that is hostile to permitting access to our own? Alaska alone is a treasure of oil and natural gas. Alaska's North Slope, home to the Artic National Wildlife Refuge, is known to have the potential of providing millions of barrels of new oil production. If we started now, it would be available in ten years, maybe less. In reality, Congress has delayed access for some three decades!
Yes, you're paying more for oil and, yes, you will continue to do so because the U.S. government has failed to grant access to our own known reserves of oil.
Meanwhile, we keep hearing that the world is running out of oil. I am not going to dispute geologists and others who know far more about these matters than myself, but I am encouraged by reports of new oil discoveries. Let's take a look at what is actually occurring worldwide.
In 1995, crude oil production in Australia began in its Wanaea and Cossack fields, located 81 miles off the northwestern coast. The fields were estimated to contain 200 million barrels of recoverable oil.
Six years ago in Kazakhstan, Kazakhoil Aktobe was making plans to begin development of three new oil fields.
In 2003, new oil fields were found in Iran with reserves estimated as high as 38 billion barrels though analysts expressed the view that only a fraction of that might be commercially worthwhile because it is what is called heavy crude which is more expensive to process.
More recently, an oil field rivaling the largest in Mexico was discovered just off the coast in the Gulf of Mexico. The new field is estimated to yield up to 10 billion barrels. Extraction is not expected to begin for about a decade.
In March 2005, Egypt's oil minister announced that three new oil fields had been discovered near the Gulf of Suez with estimated total reserves of 70 million barrels. These were the first discoveries in the area in nearly forty years. Egypt has a proven reserve of 2.7 billion barrels of oil and 1.2 trillion cubic meters of natural gas.
In late 2005, Libya announced the discovery of two new oil fields in the south of that nation. They are estimated to have a production capacity of 252 million barrels a year. A coalition of Spanish, French, and Norwegian oil companies that found the new fields will share the profits.
The Middle East will continue to dominate the world's known reserves of oil. Saudi Arabia has the largest, followed by Iraq. In Oman, four new oil fields were recently discovered. The Sultanate's crude oil exports were over 238 million barrels in 2005.
Even New Zealand has discovered oil. The Tui Area oil fields in the offshore Taranaki Basin, will be the country's first stand-alone offshore oil development. Nearby oil fields in Amokura and Pateke were discovered in 2003 and 2004 respectively. When everything gets going, an estimated 50,000 barrels a day are expected, but that could rise to 120,000 barrels in time.
The president of Russia's Union of Oil and Gas Industrialists wants to see more oil development in Eastern and Western Siberia. A new field offshore of Sakhalin, a large island just off the mainland, plus a new pipeline to Russia's Pacific coast is going to increase the world's supply of oil.
China's a very big place. Not only they going to compete for the world's oil, they have had their own fields since 1960. In 2001, Chinese researchers announced the discovery of new gas and oil deposits in Tibet in southwestern China. It is an area called the Qiantang basin and initial estimates, though speculative, suggest that China may have hit a mother lode. If it turns out to be true, many of the world's major oil companies will make significant investments. There are more than a dozen Chinese oil fields currently pumping crude.
In April, ExxonMobil announced that its affiliate in Nigeria had started production from the world class Erha deepwater development, some sixty miles offshore. It will come on-stream later this year and will ramp up to produce up to 150,000 barrels a day by the year's end.
I know about the "Peak Oil" theory that says we either have or are about to reach the point of diminishing returns regarding the world's oil supply, but these recent discoveries suggest there is still plenty of oil to be found
What is lacking, however, is the political will of Congress to remove the many regulatory barriers that would insure America would be far less dependent on imported oil. We don't have an oil problem. We have a government problem.