Home > Capitalism, Economics, Energy, Oil > Of Course – Drill!

Of Course – Drill!


The most benefiting answer for “when should we drill?”, although completely unworkable, would have been “ten years ago”.  Since that has been made continuously unfeasible by various politicians and special interest groups, now is as good a time as any to begin (any armchair economist will tell you that as something becomes more scarce, its price will rise, as will demand for the resource).  “Where”, you may wonder?  Well, anywhere that the U.S. Geological Survey even suspects that might be a pocket of oil.  There is so much federal land that sits either idle or having received a protected status, will not be tapped, even as oil and gasoline prices continue to soar upward.

ANWR

Arctic National Wildlife Refuge, Northern Alaska

Americans sit on massive amounts of natural resources, that, if we were to begin seriously exploring and utilizing, could have the ability to affect prices downward.  With the current administration’s rhetoric about environmentalism and “green jobs”, the amount of oil domestically produced could help the country ween its way onto another energy source (which escapes me now, but I am sure the administration policy makers and yes-men will come up with something comparable to the gasoline engine in their last two years in office…)

Let’s start with everyone’s favorite oil patch – way up north, in Alaska, it’s the Alaskan National Wildlife Refuge.  Yes, it’s that green tundra with a half-frozen stream above.  Apparently, no companies are currently able to drill because doing so may affect the calving grounds of the Porcupine Caribou.  According to the U.S. Energy Information Administration, there are at best 5.7 billion barrels of oil beneath the permafrost of ANWR.  Gamblers think there may be as much as 16.0 billion barrels, waiting to be tapped. [1]  Whether people realize it or not, drilling was actually approved in ANWR, in 1996, but then-president Bill Clinton vetoed the measure.  That’s right, we could have been driving around in our cars, burning sweet Alaskan crude for four years now.

Another big potential oil field is down in the northern part of the Lower 48 – the Bakken Formation, stretching across Montana and North Dakota.  The unrealized oil from this region is conservatively estimated to be around 3.6+ billion barrels. [2]  The area had previously been  identified as oil-rich, but U.S.G.S. estimates are know believed to have been too low.  Add to that, North Dakota has enacted a tax break for drilling, and now the region is finally realizing its potential – in fact, the Bakken field in Montana has more than doubled previous Montanan oil production.

One last area, amongst many resource-rich regions in the Continental United States, is the Anadarko Basin, reaching from Colorado, into Oklahoma, Texas, and Kansas.  This deposit is a little different.  Instead of having the formerly mentioned regions’ massive oil reserves, the Anadarko Basin “only” has 495 million barrels of crude[3].  But it contains some of the nation’s largest natural gas reserves – with 27 trillion cubic feet of the stuff[3]!   To put this in perspective, that amount of natural gas could sate Americans’ natural gas demand for over one million years(if current annual demand holds steady).  Such a cheap and plentiful supply, and it’s only now really being explored and extracted.  Using various processes, natural gas can actually be converted into a liquid fuel substitute. (Using something called the Fischer-Tropsch process, invented and used in World War II Germany, sounds promising)

When it’s all said and done, I think that there is really no reason for this country to be so beholden to despots and harm-doers (both here AND abroad).  The Trans-Alaskan pipeline was supposed to endanger wildlife too, and yet now we find those same threatened caribou and other fauna, happily munch lichens and scrub underneath those heated pipes.  Eastern Montana, western North Dakota, and north-of-the-Arctic-Circle-Alaska aren’t exactly bustling places, and the companies seeking to extract and cash in on the resources aren’t going to endanger their leases just to cut some corners for a quick buck – why risk billions to save a hundred thousand?  Laws already in place are sufficient deterrents to environment-wrecking behavior.  As for the Senate and President?  Let the engineering and oil extracting companies do their jobs, whereever holds promise (as well as in the Gulf)!

1.  “Potential Oil Production from Coastal Plain of Arctic National Wildlife Refuge: Updated Assessment.”U.S. Energy Information Administration. Energy Information Administration, 01 May 2000. Web. 6 Jun 2010 <http://www.eia.gov/pub/oil_gas/petroleum/analysis_publications/arctic_national_wildlife_refuge/html/execsummary.html>.

2.  ” Assessment of Undiscovered Oil Resources in the Devonian-Mississippian Bakken Formation, Williston Basin Province, Montana and North Dakota, 2008.” National Assessment of Oil and Gas Fact Sheet. U.S. Geological Survey, April 2008. Web. 5 Jun 2011. <http://pubs.usgs.gov/fs/2008/3021/pdf/FS08-3021_508.pdf>.

3.  ” Assessment of Undiscovered Oil and Gas Resources of the Anadarko Basin Province of Oklahoma, Kansas, Texas, and Colorado, 201.” National Assessment of Oil and Gas Fact Sheet. U.S. Geological Survey, January 2011. Web. 6 Jun 2011. <http://pubs.usgs.gov/fs/2008/3021/pdf/FS08-3021_508.pdf>.

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Categories: Capitalism, Economics, Energy, Oil
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