I’ve already blogged on the American Solutions website and their snake oil sales job on shale oil here. Now it seems that everybody is promoting boosting domestic production as the solution for high gasoline prices (see National Review Op-Ed here, for example, rebuttal here). Sorry folks, we can’t drill our way out of high gas prices, not as long as our consumption keeps outpacing production. And don’t get me started on how wrong Michelle Bachmann is. By her definition of wasteland, I could declare much of her home state of Minnesota a vast wasteland suitable only for clear-cut logging and open-pit coal mining.
This figure is courtesy of Joe Taplin (original here). Joe used the 2004 Annual Energy Outlook, the current Annual Energy Outlook (AEO) is here, and the findings are substantially the same. Rising energy prices, combined with economic downturns, means that non-transportation energy use is rising less than previously predicted in earlier AEOs, but the transportation sector continues to consume approximately 70% of total petroleum energy use.
Until we, as a country, get over the myth that we have a god-given right to drive big vehicles whenever and wherever we want, we will be indebted to foreign sources of petroleum. We consume roughly 9 million barrels of gasoline each day (source: U.S. Energy Information Administration). That’s roughly equivalent to 70% of all oil imports (source – yes, I know it’s not accurate to compare gasoline use to crude oil imports, but for back-of-the-envelope estimates, they can be considered relatively the same). As I’ve noted before, if the average fleet economy of our passenger vehicles was raised from the current 17 mpg to 27 mpg, the daily savings would be roughly equal to the amount of crude oil we import from Saudi Arabia.
What impact would increasing domestic drilling have on our oil imports? We can generally assume that any oil from ANWR or offshore would directly displace imported oil. From ANWR certainly, offshore probably the majority. Current imports are roughly 13 million barrels per day (source).
ANWR is anticipated to be able to produce between 0.6 to 1.9 million barrrels/day at peak production, with peak production occurring 20-30 years after initial production (US DoE 2000 estimate). That’s about 14% of current imports, which is nothing to sneeze at. But to put it in context, that’s roughly the same amount of oil that we could be saving by raising the CAFE standard to 27 mpg across the board. And that production won’t do anything to reduce prices within the next decade or more.
It seems obvious that increasing transportation energy efficiency is absolutely necessary for any real increase in energy independence, or at least increased energy security.
Update [12/29/2008]: The Energy Bulletin has also written on the subject, here.
How realistic is it to believe that opening all of America to oil exploration and development will cause a surge in production?
It may surprise most Americans, but over the last 15 years, millions of acres of federal lands and waters have been opened to oil exploration and development. Particularly important in that regard are the millions of acres in the deepwater Gulf of Mexico (GOM) and the National Petroleum Reserve-Alaska (NPR-A).
A large number of fields, many quite large, have been brought on-line during the last 15 years including Alpine (Alaska), Northstar (Alaska), satellites of the Prudhoe Bay field (Alaska), satellites of the Kuparak field (Alaska), satellites of the Alpine field (Alaska), Mars (GOM), Auger (GOM), Ursa (GOM), Ram-Powell (GOM), Thunderhorse (GOM), Mad Dog (GOM), Tahiti (GOM), Holstein (GOM), Diana-Hoover (GOM), Atlantis (GOM), Na Kika (GOM), Brutus (GOM), Matterhorn (GOM), Neptune (GOM) and many more.
In spite of all the oil field development in the US over the last 15 years, field production of crude oil + condensate has declined every year during that period with a total decline of about 2.1 million barrels/day (b/d) from 1992 to 2007. Even since 2000, when the pace of new oilfield development in Alaska and the deepwater GOM has increased, US oil production has still declined about 760,000 b/d.