How Oil Drilling Could Power the Future in the US

Michael Schirber, LiveScience.com Yahoo News 22 Oct 08;

Editor's Note: Each Wednesday LiveScience examines the viability of emerging energy technologies - the power of the future.

"Drill, baby, drill," is the mantra of those who think America must free up its domestic oil supplies, but drilling offshore is not the only option.

The United States is the third largest oil producer in the world (about 8 million barrels per day), but it is also the number one consumer of oil (20 million barrels per day).

Polls have shown that a majority of Americans want an increase in offshore drilling. In response, Congress let a 27-year-old moratorium on offshore oil drilling expire at the end of last month. This put into play about 16 billion barrels of oil (or about 21 percent of U.S. offshore resources), according to the Department of Energy (DOE).

However, this is just a drop in the bucket.

"We have significant oil and natural gas resources here in the United States," said Richard Ranger, a senior policy advisor for the American Petroleum Institute. He quoted government estimates that say federal lands have 116.4 billion barrels of undiscovered technically recoverable oil, which could power 65 million cars for 60 years.

Even more oil is out there beyond what is "technically recoverable."

For example, new technologies called enhanced oil recovery (EOR) can pump out some of the oil left stranded by standard extraction techniques (which can only reach about a third of the oil in a reservoir). The United States could get 240 billion barrels from EOR, according to a 2006 DOE report.

And then there is oil locked up in sand and rock. Colorado and other western states have the world's largest deposits of oil shale: a sedimentary rock containing a solid oily substance. If better extraction methods can be devised, American oil shale could supply roughly 2 trillion barrels-worth of oil, which is more than double all the traditional crude oil that humans have has so far used.

Unknown potential

With all this oil presumably there for the taking, why then the political drive to open up drilling offshore, or in the Arctic National Wildlife Refuge (ANWR)?

"Industry is already aggressively pursuing the oil and natural gas potential of lands that are not off limits," Ranger told LiveScience. "But in order to maximize the ability to develop energy resource potential within our own borders, we need to be able to have access to those areas where the energy potential exists, but may not be well understood."

There may be much more oil offshore than people have thought. A recent example of how oil resources are sometimes underestimated is the Gulf of Mexico, where oil companies have so far produced more than double the oil that was predicted in 1984 to be available at the site, Ranger said.

Advocates for more drilling say that we can't know what's there without looking.

"When Americans are allowed to drill, even on the small 4 percent of government lands that we are permitted to even look, our oil and gas reserves go up," reads a statement from the Institute of Energy Research.

Diversify

Ranger thinks the right strategy is to pursue several options, including "removal of barriers to domestic production, encouragement of energy efficiency and conservation to reduce demand, and encouragement of investment in long-term energy initiatives and advanced technologies, including renewables."

Among these options is EOR, which can obtain an extra 20 percent of oil from mature oil fields and so-called "marginal oil wells." One way to do this is by pumping carbon dioxide underground to help force more oil out of the ground. As such, this would double as a carbon sequestration scheme.

Ranger quoted a recent report from the National Petroleum Council, which says that streamlining regulation and increasing research and development in EOR could result in an additional 90 billion to 200 billion barrels of oil in the United States.

"The opportunity for nearer term production is probably greater with EOR, but the opportunity for discovery of new reserves in significant amounts is probably greater [with offshore and ANWR]," Ranger said.

Other possibilities, such as oil shale, are further out. Some countries, including Estonia and China, use shale oil for heating and electricity generation, but making gasoline is still a challenge.

"The technology to extract energy fuels from oil shale at scale remains in the developmental stage," Ranger said.

The U.S. government's recent $700 billion bailout could help. It includes a 50 percent tax break for the building of refineries that process oil shale, as well as tar sands.

Environmental concerns

None of these options appeal to environmentalists. It is not yet clear that burying carbon dioxide underground is safe or effective, while the mining of oil shale could affect large strands of wilderness and require great quantities of water.

Perhaps the most immediate concern, though, is offshore drilling.

"Offshore is dangerous because of increased spillage caused by increasingly violent storms, fueled by climate change," said Greenpeace spokesperson Daniel Kessler.

It was the threat of oil spills and their impact on beaches and marine environments that originally led to the U.S. moratorium on offshore drilling.

Ranger says that drilling no longer poses the same dangers. New technologies, such as blowout preventers and high-pressure safety valves that close automatically, have greatly reduced the chances of accidental spills.

Other advances are also lessening the impact of drilling. Remote sensing, for example, has improved the success rate for finding oil reservoirs by as much as 50 percent, Ranger said.

"The result: fewer wells need to be drilled to find a given target and production per well is increased," Ranger said.

Environmentalists like Kessler aren't convinced that any new wells need to be drilled.

"The most salient point is that we don't need these resources," he said. "We have the technology available right now to reduce our demand and to transfer over to an economy fueled by renewable energy."