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Big Oil Wants More, but Leaves Millions of Acres Untapped

6/24/2008 11:29:30 AM

Tags: oil prices, gas prices

With the ongoing record surge in the price of oil against declining supplies, there’s renewed clamor from oil companies and some politicians for drilling in protected areas, such as the Arctic National Wildlife Refuge and offshore locations along the East and West Coasts. 

But don’t shed a tear for Big Oil as it begs for more drilling. According to a report from CNNMoney.com, oil companies aren’t producing oil on 70 million of the 90 million offshore acres for which they already have drilling leases. The majority of these permits are for locations in the Gulf of Mexico. 

Oil companies need to “finish what’s on their plate before they go back in line,” says Oppenheimer analyst Fadel Gheit in the CNN article. 

For their part, the oil companies say it takes years of research and exploration before drilling can begin in a specific area. 

This is basically true, and few think Big Oil is hoarding oil (why would they given record prices?). But how long have those leases gone unused? It does seem likely that the oil industry is holding out hope for drilling in federal lands, such as the Arctic Refuge, which would be much less expensive to tap than locations deep within the ocean. 

About 8 million barrels of oil are produced every day in the United States (versus 21 million consumed). A report from the Energy Information Administration, Analysis of Crude Oil Production in the Arctic National Wildlife Refuge, projects that oil production from the Arctic Refuge could be between 1.9 and 4.3 billion barrels over the course of 12 years, with the most likely scenario being 2.6 billion. 

Click here to read the CNN Money article.


John Rockhold is a green car enthusiast and Contributing Editor for MOTHER EARTH NEWS. Find him on .



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Post a comment below.

 

cajunmudman
7/16/2008 2:27:03 AM
"Now suppose you are an idiot, no supposed you are a Congressman, sorry, I repeat myself." Marl Twain There is a very good reason why they don't drill on all the leases. There isn't any or enough oil or gas down there. Duh!!!!! Not every place on earth has oil or gas. And even if it has oil or gas, that doesn't make it economically viable.

Craig_1
7/15/2008 3:27:54 PM
I want to set the record straight. You are right when you say that Big Oil has drilling leases on these lands. However, these leases don't allow for production. Big oil has tried to drill oil for production but can't get the permits they need from congress. Congress has blocked their efforts and continue to block their efforts. Certain politicians are saying that Big oil is not drilling on their existing leases and this is true. What you aren't hearing is that it is because congress continues to put up the roadblock of actually being able to "PRODUCE OFF THAT LAND". I believe congress wants to "NATIONALIZE" the oil industry and the way to do it is to smear the Oil Industry. You get the public to believe that the oil industry is evil and the public won't object when government goes in and nationalizes it. Also, they talk about "Excessive Oil Profits" and how much money the Big Oil is pulling in. The government gets more money from Big Oil in the form of taxes than the Big Oil actually makes in profit. Big Oil makes about 8% profit of the oil they sell while other industries such as the drug companies and the software companies are profiting 20% - 25% of every dollar the sell. Shouldn't we call government out on their "EXCESSIVE PROFITS" that they are pulling in in the form of taxes. It really angers me when the media and politicians lie to the public. Believe me.....they are straight out lies.

John Rockhold
7/12/2008 2:01:43 PM
willia79 -- thanks for your comment. While I certainly understand the difference between million and billion, you're right that my number is wrong. I just misinterpreted the language in the CNN article. I looked up a report from the Energy Information Administration on ANWR's potential oil production; it projects ANWR's potential to be about 2 billion barrels, as you say. For oil production between 2018 (it would take 10 years for it to begin) and 2030, the report lists three production scenarios: low, mean and high. Low estimate: 1.9 billion barrels Mean estimate: 2.6 billion barrels High estimate: 4.3 billion barrels Here's a link to the report: www.eia.doe.gov/oiaf/servicerpt/anwr/pdf/sroiaf(2008)03.pdf Thanks for helping with the math. And we're happy and well aware that people who work for oil companies read Mother Earth News. Our audience is diverse as America itself. As it should be: concern for the environment and living wisely shouldn't be limited to one political part of social group.

David Williamson
7/11/2008 9:15:20 PM
To the author of the Article John Rockhold: Please stop confusing million and billion. I see this day in and day out when journalists who know very little about oil production and the industry want to jump in and pen articles on the topic of oil. The US uses roughly 21 million barrels per day which you state correctly yet you state incorrectly that ANWR could hold 2 million barrels, which should have been 2 billion barrels. This goes to the heart of many things wrong with the discussion around oil. The simple fact that many do not know the difference between million and billion when it comes to discussing oil. When the texas city refinery blew up I saw several papers report that the refinery was responsible for 460 million barrels a day (nearly 6 times what the world used at that time). The article should have stated 460 thousand a day. Please research and learn your topic before you write about it. If you ask what credentials I have for pointing this out I am a geologist who has been in oil and gas exploration for over 7 years. Yes people who work for oil and gas companies do read mother earth news, eat organic food, garden etc.

David Williamson
7/11/2008 9:01:23 PM
Get your math right Robert Jordan. It's 8 million a day not 8 billion. Canada has 1 tenth the population of the US yet bigger reserves of almost all natural resources. Of course they are exporting, duh. 8 billion barrels is enough oil to supply the world for 93 days (world demand is about 86 million barrels per day).

Robert Jordan_1
6/28/2008 1:37:47 PM
According simple math 8 billion barrels of oil domestically produced, and over 1 billion dollars a day sent out of the country, it seems to me adding AMERICA, all coasts, oil sands, Alaska, and opening same to speed up exploration adds well above 2 new billion barrels added... and energy INDEPENDENCE! Canada is in full production on ALL LEVELS and selling SURPLUS OIL, adding to their national wealth.







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