Oil Facts

By Ron Beasley

Once again we are hearing rants of outrage about the inability to drill in ANWR.  Yesterday Dyre Reports took a look at what impact drilling in ANWR would have today (and keep in mind if drilling were approved we would not see a drop for 7 to 10 years). 

ANWR is estimated to be able to produce two million barrels of oil a day. Since America uses about 20 million barrels a day thats a pretty impressive amount. The problem is that that the Alaskan pipeline can only transport 2.1 million barrels a day and its already moving an average of 650k barrels a day which means its remaining capacity for carrying oil produced from drilling at ANWR would be 1,450,000 barrels on average. Thats still a good bit. However the additional problem is that since crude oil's price is set by a world wide market that currently consumes roughly 90 million barrels a day. So even if all of ANWR's oil is used only by Americans (say through a clause in the drilling rights lease) then it would only offset an equivalent amount of imported oil (a good thing) however it would only represent a 1.6 percent increase in global supply thereby resulting in an equal price drop. With gas currently at four dollars a gallon that would only equal a 6.4 cent per gallon decrease in prices.

According to the Department of Energy the impact would be even less, less than 75 cents on a barrel of crude.  Of course by the time the first ANWR oil hit the market we will all be driving electric cars anyway.  Assuming the amount of oil is 10 billion barrels and that 2 million barrels can be pumped a day ANWR could supply 1.6 percent of the worlds oil supply for about 13 years.  If you think that ANWR may not be worth it you would not be alone.  The major oil companies have little or no interest in ANWR - it has been used as a political football over the years in an attempt to get what the oil companies really want, to drill on the continental shelf off of California and Florida.

The Wall Street Journal gives it away today:

While energy "independence" is an impossible dream, there's no doubt the U.S. has vast undeveloped fossil-fuel deposits. A tiny corner of the Arctic National Wildlife Refuge contains an estimated 10.4 billion barrels of oil and would be the largest producing oil field in the Northern Hemisphere. Yet the Senate blocked that development as recently as last month. The Outer Continental Shelf is estimated to contain some 86 billion barrels of oil, plus 420 trillion cubic feet of natural gas. Yet of the shelf's 1.76 billion acres, 85% is off-limits and 97% is undeveloped.

Did you get that?  eight times more oil in areas that are much easier (cheaper) to develop - that's what the oil companies want but that is being blocked, not by Congress but the States themselves.  That has resulted in an brand new blatant lie for the big oil Republican supporters.

Update

House Republicans vow push on oil drilling

WASHINGTON (Reuters) - Congressional Republicans vowed on Thursday to make a major push for more U.S. oil and gas drilling and in the process force Democrats to cast difficult votes at a time of skyrocketing gasoline prices.

With the November congressional and presidential elections looming, Republicans and Democrats in the U.S. House of Representatives are blaming each other for rising energy costs and gasoline prices that are topping $4 a gallon.

Republicans cited Democratic opposition to opening up the Arctic National Wildlife Refuge and more offshore areas to oil and gas exploration and drilling.

House Minority Leader John Boehner of Ohio said Republicans would try to raise public awareness and force more votes on the issue. He said Republicans would back a comprehensive approach of more oil and gas drilling as well as energy conservation and moves toward alternative fuels supported by Democrats.

"Over the next five months, House Republicans will fight every single day to hold Democrats accountable for their dismal record on producing more energy in our country," Boehner told reporters.

Bring it on.  It's going to be difficult when their own presidential candidate doesn't support it.  If they come up with one that includes Florida they write that state off in November.

GOP claim about Chinese oil drilling off Cuba is untrue

WASHINGTON � As Congress has debated energy policy over the past several days, an unusual argument keeps surfacing in support of drilling off the U.S. coastline and in Alaska's Arctic National Wildlife Refuge.

Why, ask some Republicans, should the United States be thwarted from drilling in its own territory when just 50 miles off the Florida coastline the Chinese government is drilling for oil under Cuban leases?

Yet no one can prove that the Chinese are drilling anywhere off Cuba's shoreline. The China-Cuba connection is "akin to urban legend," said Sen. Mel Martinez, a Republican from Florida who opposes drilling off the coast of his state but who backs exploration in ANWR.

"China is not drilling in Cuba's Gulf of Mexico waters, period," said Jorge Pinon, an energy fellow with the Center for Hemispheric Policy at the University of Miami and an expert in oil exploration in the Gulf of Mexico. Martinez cited Pinon's research when he took to the Senate floor Wednesday to set the record straight.

Even so, the Chinese-drilling-in-Cuba legend has gained momentum and has been swept up in Republican arguments to open up more U.S. territory to domestic production.

Update:  MojoBlog has more.

The Wall Street Journal article throws in another red herring, oil from shale.  As I pointed out in Oil Shale - a really bad idea for a serious problem the oil shale in the US cannot be developed.

There are of course several problems with oil shale production.

1. It is still a hydrocarbon and will do nothing to reduce our carbon footprint.



2. The environmental impact over several thousand square miles will be devastating.



3. The production requires water - lots of it.

I'm going to concentrate on number three today - that is enough to make it impractical.

The oil shale is located in the Green River formation which is located in Colorado, Utah and Wyoming. Colorado, which has most of the shale, already has a serious water problem which will only get worse over time.

More on this can be found here.