« BACK  |  PRINT

RS

FRONT PAGE CONTRIBUTOR

North America’s Energy Bounty, By the Numbers

Debunking The Big Energy Lie?

By: Steve Maley (Diary)  |  December 9th, 2011 at 04:00 PM  | 

RESIZE: AAA

On Tuesday, the Institute for Energy Research issued its North American Energy Inventory (.pdf link), a report which documents the government’s own estimates of oil, natural gas and coal resources for the U.S., Canada and Mexico. (The IER is a non-profit, non-partisan 501(c)3 organization that is dedicated to advancing America’s supply using free market principles.)

In a nutshell, North America contains a vast bounty of energy sources in the form of oil, natural gas and coal. Reports that we are “running out” of energy sources use semantics and terminology to play with the facts. Simply put, we have chosen not to exploit potential sources close to home, finding it more expedient or convenient to depend on faraway sources for our energy.

Based on the ongoing tangible successes in North Dakota and Pennsylvania, one would think that the jobs/growth potential presented by aggressive energy development would tantalize any politician who is truly interested in helping the economy. One would think.

The following video will give you a quick run-down of the key points of the report, but I would encourage anyone interested to download and read the full report. It is extremely well-documented and although it is chock-full of facts and figures, I found it to be an easy read.

Excerpt from the report’s executive summary:

The amount of oil that is technically recoverable in the United States is more than 1.4 trillion barrels, with the largest deposits located offshore, in portions of Alaska, and in shale in the Rocky Mountain West. When combined with resources from Canada and Mexico, total recoverable oil in North America exceeds 1.7 trillion barrels.

That is more than the world has used since the first oil well was drilled over 150 years ago in Titusville, Pennsylvania. To put this in context, Saudi Arabia has about 260 billion barrels of oil in proved reserves. For comparative purposes, the technically recoverable oil in North America could fuel the present needs in the United States of seven billion barrels per year for around 250 years.

Moreover, it is important to note that that “reserves” estimates are constantly in flux. For example, in 1980, the U.S. had oil reserves of roughly 30 billion barrels. Yet from 1980 through 2010, we produced over 77 billion barrels of oil. In other words, over the last 30 years, we produced over 150 percent of our proved reserves. …

Proved reserves of natural gas in the United States and throughout North America are enormous, and the total amount of recoverable natural gas is even more impressive. The EIA estimates that the United States has 272.5 trillion cubic feet of proved reserves of natural gas. The total amount of natural gas that is recoverable in North America is approximately 4.2 quadrillion (4,244 trillion) cubic feet.

Given that U.S. consumption is currently about 24 trillion cubic feet per year, there is enough natural gas in North America to last the United States for over 175 years at current rates of consumption.

A key point of the IER report: We have been told repeatedly by our President, liberal members of Congress and our environmental community that the U.S. consumes 24% (or somesuch) of the world’s energy, but we have only 2% (or somesuch) of the world’s proved reserves. It’s just not fair!

However, IER explains how lying liars lie:

RESOURCES AND RESERVES: WHY TERMS MATTER WHEN JUDGING ENERGY POTENTIAL

A frequent source of confusion about America’s energy potential is the terminology used, primarily the enormous yet poorly understood difference between “resources” and “reserves.” The term “reserves” typically refers to a country’s known, proved and presently economic energy supplies, but a country’s resources are much larger, representing a nation’s total potential energy. The debate over whether a country has only a few years’ supply of a particular energy source or centuries’ worth can hinge upon the terms employed. It is merely semantics—not a scientific assessment of what America has the capacity to produce—that allows critics to claim repeatedly that America is running out of energy.

Hmmmm…. Sounds familiar….

Cross-posted at stevemaley.com.

Tags: , , , , , , , , ,

COMMENTS

POSTING RULES  |  LOGIN TO COMMENT  |  REGISTER TODAY
  • trevorb

    that doesn’t matter. We still have to use green energy or we’re going to destroy our planet. In order to avoid that, we need to make sacrifices. I, on the other hand, will be flying in my private jet and riding around in my limo to lecture you about using less energy.

    • anotheraveragejoe

      becuase you buy carbon indulgances credits – from a company of which you just so happen to be the CEO – which ensures that someone else, who probably wasn’t going to be using the energy anyway, doesn’t use as much as you.

      • trevorb

        and I stand to make big, big bucks from carbon trading. I care about the environment; I’m not greedy or crooked.

        • anotheraveragejoe

          will the wonders never cease?

          • trevorb

            would take us some time to get these resources, but if we actually focused on doing that, we would become energy independent in… 10-15 years, meaning we wouldn’t have to depend on brutal dictators.

          • Menlo

            I assume you are talking about oil rather than other energy sources, but I don’t think that’s a realistic concern.

            Regardless, I think most of the nation’s energy problems are related to market manipulation, with the help of elected officials, rather than legitimate issues of increased demand or lack of existing reliable supply.

          • http://stevemaley.com Steve Maley

            “Regardless, I think most of the nation?s energy problems are related to market manipulation, with the help of elected officials, rather than legitimate issues of increased demand or lack of existing reliable supply.”

            Care to back that one up? Who is manipulating the markets? Which elected officials are helping them?

            As for your other snarky comment, most people who say that they are interested in energy independence are actually interested in energy security. Canada is a friendly North American source and our #1 source of oil imports.

            But we also depend heavily on Venezuela. Hugo Chavez counts as a brutal dictator in my book. YMMV on the level of brutality in Saudi Arabia, but it is no republican democracy. Angola? A Marxist dictatorship in a perpetual state of civil war. Nigeria? Yikes.

          • Repair_Man_Jack

            You’d have to really fear hockey and back-bacon to prefer getting your crude from Iran instead of Alberta!

          • acat

            (grin)

          • Menlo

            The numbers seem to show that the laws of supply and demand are not at work.

            Of course energy includes far more than just oil. A lack of other forms of energy could have consequences just as devastating if not more so; I don’t think it makes sense to focus on oil disproportionately. Even so, only a small percentage of this nation’s oil comes from countries with dictatorships, and those dictatorships are not a threat to the oil transactions Americans depend upon.

            I have no problem or complaint with action that discourages a lot of today’s oil use, even if it is not excessive. However, that’s got nothing to do with my views on energy.

          • http://stevemaley.com Steve Maley

            ‘The numbers seem to show that the laws of supply and demand are not at work.’

            What does that mumbo-jumbo even mean?

          • Menlo

            Consumption is not growing, and supply is not shrinking

  • juumanistra

    Because the skulking horse in this discussion is nuclear power, with the IER report not addressing uranium reserves. Given that in the spent fuel stockpile of the U.S. alone there’s a century’s worth of recoverable U-235 at current-ish consumption levels, there’s a sizable undercounting of North America’s energy potential. And all of that is before one gets into efficiency gains better fuel cycles and more exotic extraction methods. (If North America were to adopt reactor designs that burned natural uranium, extant Canadian and American proven uranium reserves could be stretched for over a thousand years. And that’s before one gets into uranium extraction from sea water and the multibillion year resources therein.)

    But nuclear’s always posed a conundrum for folks on the Right, so I’m not exactly surprised that uranium resources were excluded. They’d have only muddied the waters and detracted from the extraordinarily damning report that IER put together using hydrocarbon resources.

  • renl57

    By definition, “reserves” means “proven to be recoverable economically with today’s technology.” That’s all we can really count on; we can’t gamble with some lesser standard.

    “Resources” is something else. It’s all the natural resources we think *may* exist, but it’s not known if it’s really all there or if it can be recovered with today’s technology in a cost-effective way.

    Shale oil has been counted as one of America’s resources for many decades. But in the 1970s, we didn’t have the technology to get it out of the ground cheaply; so when the energy crisis of the 1970s hit, shale oil didn’t help us at all.

    To use an analogy: One could say that America’s desert lands are a theoretical resource for solar power. But when push comes to shove, we’re not going to pave over thousands of square miles of fragile desert ecosystem with solar panels. That’s why Obama’s “green economy” is a fantasy: A bait and switch to get us off of fossil fuels, only to discover that we can’t generate enough green power either.

    I want to know what we can realistically count on recovering in a cost-effective way with the technology we’ve got, rather than depending on some technological breakthrough arriving on schedule.

    No more fantasies. Carter’s or Obama’s or anyone else’s.

    • http://stevemaley.com Steve Maley

      “Reserves” has a conservative definition because it is basically the amount that’s reported to investors and to the SEC. It is the estimate of the amount recoverable from existing wells and from step-out locations (“proved undeveloped”, or PUD) that is reasonably certain to be produced under existing economic conditions and with existing technology. In the case of PUD locations, there needs to be a commitment to a near term (5 year) development plan.

      So it makes no sense to set policy based on proved reserves. Proved reserves average about 10 years’ production at current rates. That’s why there have always been dire predictions that “we’re going to run out of oil and gas in 10 years!”, because people make the mistake of only looking at reserves, not resources.

      In the case of the Administration, it is a blatant lie to quash pro-development argument and boost alternatives.

      Obviously, there will be a terrific environmental fight over the western oil shales. I don’t know if it will be significantly developed in my lifetime. But it’s a mistake to act like it doesn’t exist. The stuff is valuable enough that someday, if we need it enough, we have a huge supply in our backyard.

    • Raven

      Later extraction from that site shows the government to be off by 300%. IOW, we have gotten 3x as much oil or coal from any given site than the government estimated was there.

      Let’s not forget this.

      And the IER is using the Government’s own estimates (based on multiple test methods, included test-wells).

    • edintexas

      “Technically recoverable” is not pie in the sky, though they may not be financially recoverable at present. On the other hand at $30.00 per barrel in the 70s I had landmen knocking on my door for my pitifully small mineral rights. They haven’t bothered in years, small amounts aren’t worth the effort necessary with the environmental requirements today. I’m sitting on “proven reserves”, but but we have made them not worth extracting at even $100.00 per barrel.

  • bobguzzardi

    good post and it is good to be reminded of America’s resources.

    I am from Pennsylvania and you would think everyone would be thrilled about the Marcellus Shale boom. The actual results are nearly unknown and the potential is muted by a liberal media and Democrats who talk the environmental talk and talk taxes without understanding the value of less expensive energy.

    To my knowledge not one person has even been sickened as a result of fracking.

    • http://stevemaley.com Steve Maley

      Just like you know no one with Mad Cow disease, or brain cancer from their cell phone, or retardation from vaccines.

    • papat

      And you can bet all the gas in your well that if there was a PROVEN case of someone being sickened by fracking that it’d be all over the news and not just in the green propaganda video floating around.

  • dennism

    I’d be worried about the US consuming such a large share if it weren’t also true that the US produces about the same percentage of the world’s GDP. Source: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

    • http://stevemaley.com Steve Maley

      So it’s fairly easy to conclude that those who would have us cut back are actually campaigning for a reduction in the general prosperity. Their own, not so much.

      • ceili_dancer

        To the expense of energy. I remember in ’08 when the price of oil ran up, which meant the cost of transportation went up. With the added cost and no correlated increase of production the savings had to come from somewhere. either they had to cut back on personnel or raise prices. Quite a bit of the price raises are in repackaging to smaller packs and charging the same price. I found that out when I went to get a 5 lbs of sugar and realized it is now 4 lbs, but is the same price.
        In other words, I’ll wait for Obama to show up at an Occupy movement for a campaign stop with a “Mission Accomplished” banner behind him. He is fundamentally transforming this country with a bullet to the foot and burning all of the bandages to fix it.

  • bob570

    You don’t understand, American energy has a bad word in it, AMERICAN. If we were to give those reserves to Saudi Arabia, or Hugo Chaves, the Demo-nuts, would have no problem with its use.

  • ag8tor

    about energy and NO action by this do-nothing congress to try and fix it. Is the green lobby that potent that they scare the house and senate . As usual we have NO ONE that will lead the fight against the tree huggers and this Socialist regime while the middle class and poor are paying $3-4.00/gal. If you want class warfare look only to this so-called administration and Congress. They are the main offenders.The regulations could be lifted if someone had the stones to stand up to his majesty and go after the lefty-environmentalists. Why is it that the OWS crowd of losers don’t protest the insane amount of money their own green lobby spends on congess each year to further their own “green” agenda.Why do they cheer the morons like Al Gore and his global warming foolishness as he makes a speech and flies off in his Lear? I know, I know, they’re ididots too but that’s what the media follows. Doesn’t seem like there is a Republican running for Pres that will do anything about it either.

  • billstanley

    Some people cite national security concerns as a reason to support renewable-energy technologies. Czar Obama has touted solar-panel manufacturing as a green-jobs growth sector. From 2003 to 2009, China’s production of the world’s solar panels increased from 1% to 38%. U.S. production fell from 14% to 4%. The U.S. cannot compete in this industry without massive tax subsidies. Switching to solar panels made in China will not alleviate national security concerns … more domestic oil and natural gas will. www.newsandopinions.net

  • billstanley

    In 2009, the U.S. relied on Persian Gulf countries for 14.4% of its oil imports, down from 24.5% in 1979. During the same period, oil from Canada increased to 21.2%, from 6.4%. The Keystone pipeline would continue this trend. www.newsandopinions.net

    • edintexas

      This Administration would rather obstruct the Keystone Pipeline project and nudge Canada toward delivering their oil to China.

  • http://twitter.com/michael_s_grant msgrant

    Steve Maley for both Sec Dept. of Energy and Sec Dept. of Interior. Knowledge + common sense action = energy independence within a decade.

  • edintexas

    Sometimes I wonder if our politicians refusing to allow development of our energy resources is a ploy to let the rest of the world deplete their energy resources while still retaining ours.

    But then I realize that such a course would require real Machiavellian thinking and strategy, of which our politicians are incapable. Shoot, they can’t even read the bills before they pass them.