How Much Oil Does The US
- No sooner than we
came up with the outline of a $1-2 trillion crash program to eliminate US
dependence on volatile-region oil plus create an export capacity (see
below) using every measure we could think of, than we come across two
articles 2 US Department of Energy articles that suggest the US has 1.124
trillion barrels of conventional oil left.
- Well, since the
official figure you will see for US reserves is 21-billion barrels - just
3-years total consumption, you will be justified in asking what controlled
substances has DOE been ingesting and why are we worrying about oil when
we should be worrying about why DOE has not made this wonderful stuff
available to everyone.
- The mystery is
resolved once readers recall we had run a piece some months back which
said only one-third of available known oil had been recovered in the
world. Let's back off a minute to go over the matter in admittedly simple
- Primary recovery of
oil is when the pressure inside an oil field suffices on its own to push
oil out through drilled holes. This is the easy, cheap oil, and yes, the
US is just about out of it. Primary recovery gets 10-20% of the oil out.
- Secondary recovery
comes when you have to inject pressure into an oil field to force oil out.
This can be done with water or with CO2. US has been using secondary
recovery to get up the percentage of oil recovered to 20-40%. We knew
about this technology as surely did most of our readers, its no secret.
But whenever we did read about it, it was all "Waaaaaah! It's so
expensive! Weep, moan, whine".
- What was not known
to us - we do have to earn a living and then there's Orbat.com to run, so
it's not like we can spend 12 hours a day researching - is that the
technology has now advanced to the point that once large quantities of CO2
are available, DOE figures US can comfortably recover 83-billion barrels
- Now, our program
calls for a reduction in use by 5-million of 20-million barrels a day,
eliminating volatile region imports, and production from shale and coal of
another 5-million barrels, which the US would export while blockading
enemy oil. So, for example, if you didn't want the world to suffer when
you blockade Iranian oil - a move that will destroy Iran in short order -
you would put 2-million barrels a day on the market to make up for the
- But if all that's
needed is CO2, we don't have to go the shale/coal route. That 5-million
bbl/day could come from US fields for 50 years. And the nice thing about
CO2? You've guessed it - you sequester it from existing coal plants. It
can be shipped via pipeline - one project in the works has CO2 being
shipped over a 300-km pipeline for use in injecting oil fields. So
everyone should be ecstatically happy, including the greens.
- You would still need
programs that shift our energy from dirty to clean - nuclear, solar, wind
etc etc because you still want to run vehicles on fuel cells and not on
gasoline, for environmental reasons.
- But we're talking
about 83-billion barrels, where did the 1.124 trillion come from? Well,
developing technologies that exist today can push up secondary recovery to
430-billion barrels. Next, geologists have found that under the secondary
layer is yet another layer - we don't know if we are into tertiary
recovery yet, perhaps readers can look at the articles closer than we did.
But this additional layer is achievable with technologies we can conceive
of, but still need to develop. That's how we get to 1-trillion plus
- Yes, the stuff is
expensive. And yes, the pure economics of oil say that oil companies will
want to develop where they get the most money, so let's be off to distant
parts of the world and worry about the strategic dependency later.
Economic theory will also tell you when companies are making huge profits
doing business as usual, they have no incentive to shift to new
- The problem with all
this is that as Orbat.com has repeatedly said, we are not paying
$70/barrel for our oil. When you add in the cost of securing that oil
- for example, obviously we wouldn't be in Iraq if it did not have oil
aplenty and even there they've only scratched the surface because without
oil Iraq would not be a strategic interest - we are paying way over
$100/barrel. We did this exercise some years ago, we'll do it again soon.
- You cannot in any
case rely on market mechanisms when you are dealing with something so
fundamental as energy procured from volatile regions. If for some reason
the flow of Chinese toys to the US is disrupted, that is not a problem.
But if the flow of oil is interrupted, we have a big problem. Energy
independence, and indeed, the ability to export energy in support of US
foreign policy, is a strategic national security issue. It requires top
priority - right now.
- The government will
have to spend money to encourage conservation, demand reduction, and
technologies for recovering secondary/tertiary oil because it's spending
that and likely more anyway on defense of overseas production areas and
the sea lanes.
- So if companies say:
"well, secondary CO2 recovery makes no sense for us because oil will
come in at $80 barrel", then the government has to say "fine,
we'll make up that $10" because right now the people, via the
government, are paying more than that $10 AND there is no assurance overseas
supply wont get disrupted. How much better to subsidize production of US
oil than to subsidize Iran and Saudi Arabia.
- The two articles can
be found at http://www.fossil.energy.gov/programs/oilgas/eor/index.html
The absolute best way for
the US to destroy Iran...
- ...and other enemies like Saudi
Arabia is to launch a crash program to substantially reduce oil
consumption and to produce oil by other means such as shale and
coal-to-oil. US should be installing enough capacity that it exports oil.
- Oh yes, we are quite aware of
the environmental issues. But freeze that thought for a minute.
- Think of a crash program
utilizing ALL technologies: more US drilling, coal-to-oil, shale oil, tar
sands, N-power, vastly expanded solar/wind, cut transport use by
increasing mileage standards/raising taxes. double mileage standards/cut
demand by raising taxes.
- Let's use round figures. US
imports about 13-million bbl/day of crude/products. Lets say US needs to
replace 5-million bbl/day that comes from unstable areas and it needs to
export 5-million bbl/day to supply the world with oil when it blocks oil
exports from countries that need smacking.
- Okay, increasing mileage
standards/decreasing use can cut 5-million bbl/day. Goodbye imports from
volatile areas. Produce 5-million bbl/day with the combination of above
technologies. That will be needed when you smack - say - Iran. WE blockade
its ports and supply the world with the lost 2 million bbl/day or
whatever. Let's arbitrarily assume the US government will need to
subsidize this shift to the tune of $200-billion for 20 years. Throw
$200-billion more into a mass expansion of N-power - that's the government
contribution, the world is awash with liquidity, money for capital costs
is not a problem. Why N-power? Because you need to start shutting down
coal generation plants both for environmental reasons and to reduce the
pressure on coal prices.
- Next - back to the greens, and
aside from Mr. Dick Cheney we are all greens at some level. Simple
politics, and simple good stewardship of the earth says that if you are
going to get the greens to agree even on national security grounds, they
have to get something in return. So throw $200-billion over 20 years into
each of the following: environmental cleanup of the damage caused by the
coal-to-oil etc.; $200-billion into subsidies for clean new technologies -
solar, wind, whatever; and $200-billion as subsides for mass transit. You
are then spending $4 dollars to keep greens happy plus money to shift the
existing base from coal to nuclear for every $1 for oil produced by other
- Forget about Iraq for the
moment, assume the regular defense/foreign aid/intelligence budget can be
cut by $50 billion/year - say less than 10% of existing spending because
we wont have to give a hang about the Middle East. You've paid off that
trillion in 20 years. And in 20 years, with new technologies and a vast
expansion of existing technologies like wind and solar producing results,
you can start shutting down the extra coal and start drawing down on
existing coal, which is used mainly for power plants.
- You don't want to cut the
defense budget? You don't like our figures and you want to - say - spend
more on clean-up and subsides for solar/wind etc so less is needed for
N-power etc? Okay, would you be happy with an additional $50-billion a
year? That's $100-billion/year - what we spend on Iraq without a squeak.
It means 0.8% of the current GNP - a lot less of the 2027 GNP. That money
won't break any bank - and it will generate millions of good jobs for the
- It would be nice to build a
consensus on this, and if it is presented as a national security issue,
and environmentalists are given iron-clad assurances that money will be
spent on things they value - reduced consumption, clean-up, new clean
technologies - and that the dirty stuff is temporary, they should find it
- After all, no one wants to be
held hostage to foreigners who hate America and use our money to try and
destroy us. Environmentalists are patriots too.
- But if consensus cannot be
quickly built - well, the President keeps telling us we are at war,
doesn't he? Time to put his money where his mouth is. In war you enact