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Wednesday, July 09, 2008

We've Got Plenty of Oil, Not Enough Legislative Will

By Donald Wolberg
Geologist
       SOCORRO — I frequently enjoy the astute comments of Charles Krauthammer, whether delivered via the Albuquerque Journal or his televised appearances. However, I suggest that some facts may have escaped his research regarding matters of energy pricing and availability.
    Of course the United States (and all of the industrialized and industrializing world) has an oil addiction. Oil and its refined products offer the most efficient sources of energy and are available in quantity, safe when used properly.
    Petrochemicals are an additional set of products needed by the entire world. The recent spike in cost of fuel and other products is complex, involves much speculation, but can be remedied by increasing, not rationing supply.
    There is really no shortage of energy in terms of reserves available for development and production. There is a shortage of legislative will. There is also a surplus of special-interest and agenda pleading without concern for the socio-economic impact on the lives of real people.
    North American tar sands and oil shales hold somewhere between 800 billion and 1 trillion barrels of oil, more oil than is present in the entire Middle East. This oil can be recovered.
    The midcontinent Bakken Formation has another 3 to 4 billion barrels of recoverable oil, sitting largely untapped. Apart from the overly abused mention of the Alaska National Wildlife Refuge, where the total footprint of development would be equivalent to a few football-sized areas in the state of Indiana, there are untapped mega-reserves on all our continental shelves, the Western Interior and Gulf Coast.
    The only development of oil platforms and drilling off of Florida, by the way, are operations by China via permits issued by the Cubans. Most "cartel" oil in the world is now state-owned or controlled (at least 80 percent) and American or other "Big Oil" companies actually produce a very small share of the oil pumped in the world Í size and supply matter in the oil industry.
    It still costs the Saudis less than $2 to pump a barrel of oil. It costs American companies from $30 to 40 a barrel to produce U.S. oil, the same as it did before the price spike.
    The difference is that most American oil is "old oil," since it is almost impossible to gain access to new fields because of the bizarre actions of a less-than-motivated Congress and the pressure of elitist and mostly urban special-interest alarmist groups.
    The pricing of oil is complex, but it is obvious that expansion of production will cause the price to decline greatly, no matter how long it takes to bring the increased production on line. More importantly, oil is a strategic necessity, and I suggest that those who prevent the expansion of a domestic production strategy are guilty of a "fuzzy logic" that threatens our economy and society.
    U.S. oil consumption has actually stabilized at about 580 million barrels a year, as recently reported. This consumption rate has not changed much in 20 years (570 million barrels annual consumption 20 years ago. In truth, we do not "over-consume," given the diversity, geography and needs of our economy and social structure.
    New England homes tend to use oil for heating and that is not likely to change. Railroads use oil to move trains since there are very few U.S. corridors for overhead or third-rail power. Trucks use oil. One truck with 200 to 300 gallons of diesel capacity Í 1,500 mile range Í may need three or four refills on transcontinental runs to haul what we all need.
    Interestingly, there is sufficient available known North American untapped oil reserves for more than 600 years and possibly 800 years at present consumption. There is sufficient coal to be used as coal for 500 to 600 years with enhanced uses as coal or modified products. New Mexico has significant undeveloped coal resources in the San Juan and Raton basins.
    New Mexico can and should be a major participant in nuclear energy development, and together with reactor technology these resources can provide nuclear power of virtually infinite duration. In the end, significant development of these resources will reduce energy costs to a more reasonable and marketplace-driven level.
    Dr. Wolberg teaches a course in renewable energy at New Mexico Tech.