[meteorite-list] OT -Oil reserves, the reality

From: David R. Vann <drvann_at_meteoritecentral.com>
Date: Fri, 8 Apr 2011 14:16:24 -0400
Message-ID: <234ABB34F89B4C159258F4901E805AAB_at_sas.upenn.edu>

Thought maybe it was time to change the thread title, and maybe stop this
non-meteorite thread. In truth, I am responding to correct some factually
inaccurate statements.

Guido, I respectfully suggest that you investigate the facts before you make
statements like "We are played for fools by the career politicians in Washington
who pander to the environmentalists and prevent us from tapping our own reserves
which are larger and easier to obtain than all the oil in the Middle East.
That's why we object to increased pump prices."

Politicians are not pandering to environmentalists, they are pandering to
businesses, I think the events of the last thirty years speak very strongly to
this; attacks on the Clean Air and Clean water acts, the Great Recession, the
Savings and Loan disaster, the Energy trading frauds, etc. (I can go on for
quite a while here, but is not the forum).
Environmentalists have very little influence on the price of oil, if any.
Rather, market forces determine this entirely. Examples: in the late '70's oil
did not skyrocket because of environmentalists, it did so because OPEC was
flexing its newfound muscle. Oil prices did not jump prior to the Great
Recession because of environmentalists; it jumped because of speculators and
because the oil refiners underestimated demand by China and India, resulting in
inadequte production capacity (there was plenty of crude oil). The cost of oil
is related to the cost of drilling; I could, again, go on, but this isn't really
the forum. Suffice it to say, the price of oil is driven by market factors that
are *not* related to supply, as the supply can be (and frequently is) increased
to meet demand.

So, environmentalists atempting to reduce drilling are not affecting the price,
regardless of how one wants to view it. Most recently, the state of Florida,
under a Republican govorner, decided to limit in-shore drilling to protect the
states' fishing and tourist industries. They were deemed more valuable (to the
state) than the short-term gains from onshore drilling - an economic argument,
not an environmental one.

Our oil prices are lower because we consume so much, getting a discount, and
because we subsidize the oil companies with tax dollars. Government subsidies
for profitable companies are not defensible, yet they keep getting them, because
the politicians are pandering to the industries paying for their reelection.


The final inaccuracy, " tapping our own reserves which are larger and easier to
obtain than all the oil in the Middle East" is the most egregious. This is
simply wrong. The proven resources in the US are about 22 billion barrels of
oil; Saudi arabia *alone* has an estimated 270 billion barrels. Although that
number has been questioned as possibly politically motivated, it is not
overestmated by a factor of ten. If we take the 1968 numbers (before OPEC), they
had something like 170 billion barrels, still fabulously more than our reserves.

Our remaining reserves are not easier to obtain (discounting the politcal issues
related to dealing with the Middle East), as they are increasingly deep water
reserves (whose difficulty was amply demonstrated last summer) or in shales,
which are environmentally destructive and energetically and mechanically
difficult to extract; in fact, to date, there has been no economically viable
method to extract these (but we will, when gas is expensive enough). The oil
companies are going for the easy fruit first, as it is the most profitable.


Sorry, but I have a difficult time letting false information get distributed -
much like the NYT article. Plenty of others responded to that, so I'm responding
to this one. The fact is, the Middle East holds more than one-half of the total
reserves in the world. North America, including the shale sands in Canada holds
maybe 16%. The largest reserves are in Venezuela, Saudi Arabia and the former
USSR.

We consume about 6.6 billion barrels per year, so we have about 3 or 4 years, if
we drilled everything (that we 'own').

The world average consumption rate vs the reserves indicates that we have about
50-60 years left (at current consumption rates, which are increasing
substantially each year).

So, to recap this too long message:

Oil prices reflect market forces, not environmentalist obstruction.
The US does not have more oil, easily obtained or not, than the Middle East.

We complain about high oil prices, not because of politicians, but because it
means we have fewer dollars left to buy meteorites.
(that puts it back on topic. Sort of.)







David R. Vann, Ph.D.
Department of Earth and Environmental Science
THE UNIVERSITY of PENNSYLVANIA
240 S. 33rd St.
Philadelphia, PA 19104-6316
drvann at sas.upenn.edu
office: 215-898-4906
FAX: 215-898-0964
Received on Fri 08 Apr 2011 02:16:24 PM PDT