- There's still life in the old dog. While the US has been drilled like a pincushion for 150 years, we have still not found every barrel of oil that nature provided us. Don't be misled by proved reserves data that seem to show that we have less than 12 years of oil left at current production rates. In point of fact, the US has produced a cumulative 200 billion barrels of oil from reserves that never exceeded 40 billion barrels. Not only do we continue to find new resources in the manner of Tiber-1, but we continually learn how to extract more oil from the reservoirs we've already found, revising their reserves steadily upward over time.
- A discovery like Tiber doesn't mean we've merely added two weeks worth of production to reserves. US oil production, like global production, is comprised of the contributions from thousands of oil fields and hundreds of thousands of oil wells, with the most productive 20% or so accounting for roughly 87% of output. If initial guesses of recoverable oil are right, then the Tiber field could yield on the order of 100,000 bbl/day of oil for 20 years--2% of US production for a generation. If we turn up our noses at that, then we surely ought to think twice about wind power. In 2008 all the wind turbines in the US generated 52 billion kilowatt-hours, backing out natural gas power generation equivalent to just 245,000 bbl/day of oil, or 5% of US oil output.
- We've heard a lot from skeptics about how inconsequential the oil in areas that have been off limits to drilling would be, whether we're talking about offshore California, the eastern Gulf of Mexico, or the Arctic National Wildlife Refuge. Yet without actually exploring these areas using the kind of technology that found the Lower Tertiary trend of which Tiber appears to be a part, in a place that just a few years ago would have seemed both inaccessible and highly improbable, we can't know what's really there, waiting to be discovered. In that light, the official estimate of 18 billion barrels of "undiscovered, technically recoverable" oil in these areas must be regarded as an extremely conservative lower bound, based on totally obsolete 1970s technology.
- Although finding more oil may look problematic from a greenhouse gas perspective, oil is not our worst fuel, and it remains the hardest to displace, because of its unique combination of energy density and portability. I share the vision of many for a future made up of electrified cars and low- or no-emission power plants, but we're going to burn many billions of barrels of oil getting there. For reasons including national security, national pride, and our balance of trade, it matters whose oil it will be, as we make the long transition to a more sustainable energy economy. If we ignore that principle, we're likely to end up even more reliant on unstable foreign suppliers, before we arrive at the elusive promised land of energy independence.
Friday, September 04, 2009
What Does Tiber Tell Us?
Like many bloggers this week, I've been thinking about the implications of BP's big, new oil find in the Gulf of Mexico. Some analysts suggest that the Tiber field might contain as much as 3-4 billion barrels of oil, though much of it might never be recovered. The Wall St. Journal's Environmental Capital blog suggests that such discoveries serve as a kind of Rorschach test, with the various interpretations of it telling us more about the observer than the thing being observed. Fair enough. Without venturing into grandiose conclusions about whether the Tiber-1 deep water well refutes--or in some convoluted fashion confirms--the central hypothesis of the Peak Oil theory, this discovery provides a handy opportunity to remind my readers of a few principles and themes about oil exploration and production that I've been discussing here for the last six years: