Commentary 34- Mulshine on Oil

From the New Jersey Star-Ledger, 06/09/08

Oil's finite but there's an endless well of ignorance
Posted by Paul Mulshine June 09, 2008 10:42AM


The other day I got an e-mail from some well-meaning soul who wanted to instruct me on the infinite amount of oil that we could tap right here in America if only we wanted to drill for it.

Why do people send me this stuff? As a journalist for a major newspaper, I can pick up the phone and get the top experts in the field to discuss this with me at a moment's notice. And I have done so repeatedly and written in some detail about the results.

And the result is that I learned that American oil production peaked way back in 1970. We have more wells than any other country on Earth. And no matter how many more we drill, we will never again pump as much as we pumped back in the good old days.

That's the truth in real life. On the Internet, it's a different story. Now that gas prices have hit $4 a gallon, everyone with e-mail seems to be forwarding a message about the fabled Bakken field in North Dakota. That field contains 4 billion or 40 billion of 400 hundred gazillion barrels of oil, depending on who's doing the telling. Why if only we could drill it ...

In fact, we are drilling it. And it's a nice little oil field. But like the Arctic National Wildlife Refuge and all those offshore spots where we should be drilling, the amount of easily accessible oil amounts to just a fraction of the world market. And all oil produced in the U.S. goes on the world market. Even if we drilled everywhere worth drilling, we'd be lucky to put another two million barrels a day on a market that consumes ... I'm not saying how much it consumes. If you don't know that figure off the top of your head, you shouldn't be discussing how oil relates to gas prices.

What you should be doing is running a search on the information in these e-mails. When I did I came upon this very interesting dissection of the Bakken frenzy.

The writer links to a recent United States Geological Survey fact sheet that states the reserve holds "estimated mean undiscovered volumes of 3.65 billion barrels of oil."

That may sound like a lot. In reality it's about the amount that the world burns in two months. And of course it wouldn't all come on the market in a month. Therefore it would be just a drop in the bucket in world supply and would have little effect on gas prices.

But if you want to believe there are vast oil reserves out there that could bring the price of gas back to a dollar a gallon here in the good old U.S. of A., be my guest. Just don't forward me any e-mails on it.

Original Referenced Link


My Commentary:

Posted by Zemack on 06/09/08 at 8:35PM
It may indeed be true that, as Mr. Mulshine states, "we will never again pump as much as we pumped back in the good old days." But, given all of the potential fossil fuel producing property that our government keeps off limit from exploration and development by America's oil and gas industries, that statement may be as much of a speculation as the most optimistic projections of potential untapped American reserves. There is only one way to find out.

All areas now closed off, from the Arctic, to Pacific, Atlantic, and Gulf offshore sites, to Western shale oil...should be opened up for energy development. With all due respect to the "experts", their estimates are just that...estimates. There is no way to estimate the content of heretofore unknown or unsuspected fields that may be discovered once all restrictions are removed. There is simply no way to foresee what new ideas and technologies might emerge from the entrepreneurial minds of individuals working either independently or for major companies that could greatly expand the recoverable oil and gas from existing known reserves currently off limits. One does not have to be an expert to understand the extraordinary, and unpredictable, productive potential of free, profit-motivated people willing to risk their own money and time on the job of producing valuable products.

The politicians and their constituents who vilify America's private energy companies...people who themselves contribute nothing to our energy needs...are mostly the same people blocking them. They should get out of their way.