Conventional Crude Oil Resources in the US

Posted by Jennifer Schwartz on April 28, 2009 at 4:06 pm

US crude oil production, 1981-2005. (image: eia.doe.gov)

by Jennifer Schwartz

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In a 2009 Earth Day speech, President Barack Obama told the country that we “can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy.” This quip resonated with the country’s eco-conscious population.

But Obama’s comment doesn’t come long after “drill, baby, drill” chants reverberated throughout Republican Party rallies during Senator John McCain’s presidential campaign in 2008. Different as the methodology may be, the desire to “drill, baby, drill” for United States oil is rooted in the same place as the desire to develop clean energy: All sides agree we should decrease our dependence on foreign oil.

No one (except for perhaps the Saudis) denies that the U.S.’s dependence on foreign oil is harmful to national security and our economy.  According to the Energy Information Administration, the U.S. imports over 12 million barrels of crude a day, which is 60 percent of the total oil consumed. (Until 1970 and U.S. peak oil, we were producing more than two-thirds of the oil we needed.) Shifting to greater energy production at home would also create millions of jobs and potentially protect the U.S. from rapid price fluctuations. But the question remains exactly how we will replace foreign oil with domestic sources. The details of that balance are controversial and varied, depending on whom you ask.

Disparity among political, economic and industry lines makes it seem like there are only black and white choices in the energy debate, when in reality, the “right” mixture of U.S. energy will include a combination of both conventional and green sources, especially for the next few decades. We won’t be shunning conventional oil until a diminished supply and consistently inflated market demands that we adopt cheaper tactics.

We still have significant stores of conventional liquid oil right here on U.S. soil, despite the fact that oil production peaked decades ago. (According to the EIA, the U.S produced about 5 million barrels of crude per day in February 2009, down from its 3.5 billion barrel per day peak in 1970.) For the purposes of this article, we’re excluding the vast stores of coal, tar sands and oil shale.

To be sure, home heating oil is just one of the many things made out of crude oil. In fact, out of the typical 42-gallon barrel of oil, less than 1.75 gallons (4%) of home heating oil are made, according to the EIA. Despite heating oil’s presence in the shadow of gasoline, both are byproducts of crude oil. Let’s survey the U.S.  and offshore waters for this ubiquitous substance, and weigh the pros and cons of pursuing it.

Conventional Oil: Where is it, how much is there, and should we go after it?

Significant fields of domestic, conventional crude oil – the dark, viscous liquid that gets pumped from the ground either on land or offshore – are not limited to the Gulf of Mexico and Alaska. You might be surprised to learn that the waters off the New Jersey shore, for example, are potentially rife with billions of barrels of oil.

According to a March 2009 article from The New York Times, About 85 percent of the nation’s coasts are now off limits to oil drilling, including most of the Pacific and Atlantic seaboards and the western coast of Florida. They’d been that way for more than 30 years.

(image: nyt.com)

Because of the restrictions, a 30-year gap has prevented comprehensive reassessment of how much oil is actually off our coasts. Considering new technologies, the Interior Department estimates that “undiscovered oil reserves total 86 billion barrels, four times the nation’s official proven reserves. The bulk of that potential oil, nearly 68 billion barrels, is in areas that are already accessible to drilling in the Gulf of Mexico and Alaska,” according to the Times.

In his final days in office, Bush ruled to open up expansive, new areas for offshore drilling well into the next decade. It would let energy companies drill for oil and gas in all or some portion of 12 areas of the outer continental shelf, including four areas off Alaska, two off the Pacific coast, three areas in the Gulf of Mexico and three more along the Atlantic coast.  Summer 2008’s oil prices played no small role in pushing that initiative forward. Obama’s administration largely scrapped those plans. With oil demand and prices so low in the first quarter of 2009, it makes expensive exploration and extraction less viable, especially considering the weak economy.

But in March 2009, the Interior Department moved forward with the long-planned auction of leases in the Gulf of Mexico that includes 4.2 million acres that had been off limits since 1988.

Additionally, Secretary of the Interior Ken Salazar took a whirlwind tour of potential drilling sites in the U.S. (Atlantic City, NJ; New Orleans, LA; Anchorage, AK; and San Francisco, CA) to host public comment meetings and assess options. Salazar is expected to pick certain areas to lease for oil drilling as early as this summer. The official estimate from the Department of the Interior is that 18 billion barrels of undiscovered oil exist in areas previously off limits. But since those areas haven’t been explored in three decades, oil executives say that number underestimates the potential.

“The outer continental shelf will have its niche place in our energy policy,” Ken Salazar told the Times. But he added that offshore oil supplies “should be looked at in the context of a comprehensive energy policy.”