US Oil Reserves Double World
Facing our energy needs now and in the future is something that all American's are concerned about. We all have to pay for energy use in one form or the other and the cost of that energy seems to have grown more and more each year. Moving away from oil dependence from other nations is a great idea but it is a path that will take at least two generations of Americans to accomplish. Renewable energy sources are expanding in the United States as far as implementation and large scale projects about to break ground. Wind and solar energy is growing by double digit percentages every year That is how we begin our journey to energy independence. In addition we must consider tapping the vast resources of oil that are right here in the United States.
The GAO came out with a report this past week that stated the following regarding shale oil reserves in the Green River Basin area of Utah, Colorado, and Wyoming...
Increasing domestic oil production. Being able to tap the vast amounts of oil locked within U.S. oil shale formations could go a long waytoward satisfying the nation’s future oil demands. The Green River Formation—an assemblage of over 1,000 feet of sedimentary rocks that lie beneath parts of Colorado, Utah, and Wyoming—contains the world’s largest deposits of oil shale. USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions. The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered. At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves. The thickest and richest oil shale within the Green River Formation exists in the Piceance Basin of northwest Colorado and the Uintah Basin of northeast Utah.
Picture courtesy of Pete's Place from August of 2008
In North Dakota they are experiencing a boom of employment due to the shale oil deposits being tapped. Tapping those deposits and reserves is a technology in progress and like all new technologies its potential for extracting more of the oil will only grow over time.
It makes you wonder if the current spikes in gas and oil will be neutralized and a downward trend of pressure on pricing from the vast volume of oil available in the Green River area will effect the markets? Time will tell.
Papamoka
posted by Papamoka at
7:23 AM
3 Comments:
The thing with the oil shale deposits is that it has a high cost of extraction. Oil shale is very tacky and doesn't flow like a liquid. It's similar to tar and takes special processing. You don't drill it, but mine it. Oil shale is only profitable to extract at oil prices over $70 a barrel. That doesn't mean that oil in the US sells for $70 a barrel, because that goes on the international market. The international market is around $97 a barrel. So in the bidding war on the international market the price gets bid up. There is a speculation premium built in there too and the current supply versus demand situation doesn't really support $97 a barrel oil. It should be lower, but unless Congress is going to regulate the oil futures and derivatives markets we'll never know.
Have you read up about the goings on in North Dakota Jim? Now that is an interesting story right there. Maybe with all the practice they have there the technology will grow that much faster. Where there is a will there is a way to always do it cheaper and faster.
If I were a long term investor then I would be buying up all the cheap land I could get my hands on in the Green River Basin.
Even given enough time processing it the cost is not likely to come down appreciably. We're basically using the same refining process for liquid oil that was used a hundred years ago. We're more efficient, but basically it's the same process.
My only concern is that if there were a return to cheap oil, and I don't think there will be, then the need to conserve will disappear. We need to curb CO2 emissions before it's too late. Our civilization is caught between a rock and a hard place. Our lifestyle is built on cheap oil and our planet is being destroyed by it.
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