4.3 Billion Barrels Discovered

Published Wednesday, October 01, 2008 by Dan Gainsford | E-mail this post

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Read the US geological Survey press release here,
http://www.usgs.gov/newsroom/article.asp?ID=1911

And my friend Grant Buffett's response. Grant is a contributor to SFD you can read his blog HERE!

This is why I have friends who are earth scientists.

peace,
d
__________
Hey Dan,

I just read the report. Not to be too pessimistic or anything, but 3.645 billion barrels is a drop in the bucket in terms of world oil consumption rates. The world consumes at a minimum, 84,000,000 barrels a day (the US, 25% of that). So, assuming we can extract 100% of the technically recoverable reserves:

3,645,000,000 barrels = 43 days
84,000,000 barrels/day

Or, if the US used it all, 174 days.

So, that buys us some time, but doesn't solve our problem of limited oil supply with regard to rising demand. Not to mention that this is "technically recoverable", so that means, that the assessment has been made but they haven't drilled any wells yet to prove it. So, if they started now, they would likely do seismic next to pinpoint exactly where to drill. That would probably take a couple years to design the survey, acquire it, process and interpret the data. Then they would go into the drilling phase, which would take a few more years. They would also have to manufacture a pipeline to transport the oil. So, given all that, the oil wouldn't likely come online for about 5-10 years, and it would only then give us another 43 days of world supply. Of course the well will produce for more than 43 days, because no well can pump 84,000,000 barrels per day. It would probably operate for decades, trickling slowing into the main pipeline. Then, there is the question of what grade oil this is. Light crude, (or sweet crude), needs little refinement and can be turned into gasoline, diesel quite quickly. But, if it is heavy crude, it could take more processing.

My overall feeling is that this is a a decent find, but doesn't solve peak oil problems. If I were to speak from a practical point of view (that is, being dispassionate about environmental issues, which of course, I am not), I would recommend drilling off all coasts of North America, including the Arctic. If global warming trends continue (this year the ice cap was just a little bigger than the record smallest last year), we could see an ice free Arctic in a decade or two. If this is the case, there is high motivation to explore in the continental shelf off North Canada and in the Canadian Islands, as well as off the northern coast of Russian, Norway, Alaska, etc... But, exploration up there has really never begun in earnest, because of the ice shelf. We would be talking decades after the icecap melts before any of that came online. As far as the Alaskan reserves go, in ANWR (Alaskan National Wildlife Reserve), there are only 10.4 billion estimated technically recoverable reserves. So, that gives the world another 4 months, assuming current consumption rates. But, of course world demand is going up and and up. All this, would only buy us time to make the necessary, massive change to alternative energies.

The long term solution is to "get off" oil as much as possible and switch to alternatives, as well as make a quantum cultural change to proceed to living more locally and frugally, restoring the rail system, making it electric and high speed as well as restructuring our cities to be more walkable and to transform suburbia into little semi-independent enclaves.

Peace,
Grant

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