Blog Archives

New Oil Finds Around the Globe: Will the U.S. Capitalize on Its Oil Resources?

Uploaded by AmericanSolutions on Mar 28, 2011

In a recent trip to Brazil, President Obama praised the Brazilians for their forward-thinking energy policy and said he wants America to be one of their “best customers.” Why, then, is he keeping American energy resources off limits?

By November 23, a team of 12 Congressmen and Senators will determine if they can agree on a way to cut at least $1.2 trillion dollars from the federal deficit. If they fail to agree, predetermined cuts will automatically occur, half of which will be to the Department of Defense budget.[i] One way to get revenues without taxation and spending is to allow the U.S. oil industry to do what countries around the globe are doing: drilling for oil, onshore, offshore, in the Arctic and elsewhere. A recent study by the American Petroleum Institute (API) finds that fewer restrictions on oil drilling could increase government revenues by $800 billion, increase U.S. liquids production by 50 percent, and generate 1.4 million new jobs by 2030.[ii] And, the United States can do that just by allowing the oil industry to develop oil resources here in the United States as other countries are doing in their countries: Canada, Norway, Cuba, Brazil, Russia, Israel, to name just a few.

Oil Finds and Development around the Globe

Brazil. Brazil has some 15 billion barrels of proved oil reserves in its sub-salt offshore fields. They lie in a 2 kilometer deep salt layer under the seabed that is estimated to hold up to 50 billion barrels of oil.[iii] These ultra-deep deposits are drilled at up to three times the normal pressure for offshore oil. By 2020, Petrobras, the country’s government-controlled oil company, is expected to produce 4 million barrels per day, double its volume today.[iv]  Other estimates have production as much as 5 million barrels a day and 6.42 million barrel a day by 2020.[v] The sub-salt’s share of total domestic oil production is expected to increase from 2 percent in 2011 to 40.5 percent in 2020.[vi]

While the United States has oil offshore in the Gulf of Mexico and in the Atlantic and Pacific Oceans, the Obama Administration either has that oil off limits to exploration or is slow at approving leases since it lifted the drilling moratorium it put in place after BP’s accident in the Gulf. In Alaska, which has over 50 percent of the entire coastline of the United States[vii], fewer than 100 exploratory wells[viii] have been drilled in federal waters, while over 35,000 wells have been drilled in the Gulf of Mexico[ix]. Alaska has tremendous unknown potential for energy discoveries, but currently, final permits have not been issued to allow exploratory wells. But, during President Obama’s visit to Brazil earlier this year, he pledged that the United States will be a major customer for Brazilian oil.

Canada. Canada is rich in oil sands with 170 billion barrels in reserves.  Environmentalists are against oil sands because their production emits more greenhouse gas emissions than the production of conventional oil. Studies have shown that the difference in emissions from well to wheel is only about 15 percent. Further, a new technology, developed by N-Solv, an Alberta Consortium, can extract twice the amount of oil as current methods and reduce greenhouse gas emissions from the process by up to 85 percent.[xi] But none the less, the dispute over the Keystone XL pipeline bringing Canadian oil into the United States is due mainly to the oil sands production issue.

Needless to say, whether the United States buys Canadian oil sands or not, someone will and that someone is most likely China, who has already bought into Canadian oil fields. In July, China’s largest offshore oil producer, Cnooc Ltd. agreed to buy OPTI Canada Inc. for about $2.1 billion a deal that has to be approved by both governments.[xii] Also, whether the United States allows Canada to build the Keystone XL pipeline or not, the United States will be importing Canadian oil sands, moving it by barge, rail, or truck, as we do now. An Ensys Energy & Systems Report, Inc. commissioned by the State Department estimated that rail alone could haul 1.25 million barrels of Canadian crude daily by 2030, nearly twice the amount of the proposed pipeline.[xiii]

Cuba. Cuba has 5 billion to 20 billion barrels of oil off its coast, just 70 miles off the Florida Keys. Soon, Cuban workers on a Chinese-built rig owned by Spain will be drilling in mile deep-waters. China has signed contracts with oil companies from Brazil, India, Italy, Russia and Spain and is in talks with China over lease deals. This oil find could make Cuba independent of Venezuelan crude, from which Cuba gets 60 percent of its oil. Due to our 49-year embargo with Cuba, U.S. oil companies cannot drill in Cuban waters, supply equipment there, or help in the event of an oil spill.[xiv]

Israel. Israel has an estimated 250 billion barrels of recoverable oil shale, second only to that of the United States, which has almost a trillion recoverable barrels. The 250 billion barrels compares favorably to the proven reserves of Saudi Arabia whose reserves total 260 billion barrels. It is estimated that the oil can be recovered at $35 to $40 a barrel using a new technique that does not use water. Israel Energy Initiatives indicates that the process is cleaner than that currently used to produce shale oil because the oil will be separated from the shale rock up to 300 meters beneath the ground, releasing water as a by-product. The extraction process involves heating the rock underground to approximately 325C, the level at which the carbon bonds in the rock start to “crack”. Production on a commercial basis is expected by the end of the decade with production levels beginning at 50,000 barrels per day, which will provide almost 20 percent of Israel’s oil consumption. [xv]

In contrast, the U.S. oil shale resources are mostly on federal lands in Colorado, Utah, and Wyoming, and the U.S. federal government is withholding those lease sales.

Norway. Norway had been seeing oil production declines since 2000 when its oil production peaked due to maturing oil wells. But that trend may be reversed due to two new finds in the North Sea.  Statoil ASA has made two offshore finds totaling between 500 million and 1.2 billion barrels, which is among Norway’s top ten discoveries. The new well is less than ten feet from a dry well drilled in 1971.[xvi]

“This shows Norway still has the capacity to deliver world-class discoveries,” Tim Dodson, Statoil’s exploration chief, said. “It’s probably the largest offshore oil discovery anywhere in the world this year. It has given the entire oil industry renewed optimism.”[xvii]

Russia. Russia has opened a portion of its offshore area in the Arctic Ocean to drilling and ExxonMobil has obtained the rights to drill there, but the deal may need to be reviewed by the U.S. government. The United States Geological Survey estimates that the Arctic holds one-fifth of the world’s undiscovered, recoverable oil and natural gas. Russia’s economy is dependent on petroleum for about 60 percent of its export revenue. While Russia currently produces more oil than Saudi Arabia, its Siberian onshore oil fields are in decline, so the country needs to develop new areas.

This contrasts with the U. S. stance regarding drilling offshore Alaska where environmental restrictions and lawsuits by conservation organizations have held off exploration.[xviii]

The API Study

What could the oil industry achieve if restrictions on oil drilling in the United States were lessened? The American Petroleum Industry commissioned a study that assumed oil drilling would be allowed off the currently prohibited areas of the East and West Coasts, in waters off Florida’s Gulf Coast, in Alaska’s Arctic National Wildlife Refuge, and on most federal public land that is not a national park. It also assumed that it would get approval to build pipelines to accommodate a doubling of Canadian oil sands production and the continuation of the tax policies currently in place for the oil industry.[xix]

The API commissioned the study from energy consultants Wood Mackenzie, who found that domestic production of petroleum liquids would increase from 7.8 million barrels per day in 2010 to 9 million barrels per day in 2030 under current policies due to increased production from shale oil and deepwater drilling. However, if the industry could meet the assumptions of the study, domestic liquids production could reach 15.4 million barrels per day close to the 19 million barrels a day that we currently consume. That would create 1 million new jobs over the next seven years and 1.4 million by 2030. The industry already supports more than 9 million jobs throughout the economy. The study indicates that the United States can come close to producing enough new oil and natural gas to displace all non-North American imports within 15 years. More than $800 billion in cumulative new government revenue could be generated by 2030 and $127 billion by 2020 – equal to about two and a half years’ worth of current federal spending on roads. Most importantly, no new taxes or increased government spending is needed to accomplish the results of the study.

image

image

Conclusion

Around the globe, countries are drilling for oil onshore, offshore, and in oil shale deposits. But the United States is hampered by government rules and restrictions to developing its vast resources. Without increasing taxes and without increasing government spending, the oil industry in the United States could make us independent of non-North American oil imports. And in doing so, they could create jobs and add billions of dollars to government revenues. Why don’t we take the challenge?

Original Article

Obama’s Anti-Energy Policies Are Bankrupting America

Published on May 5, 2011 by HeritageFoundation

Randall Stilley has witnessed firsthand the Obama administration‘s job-killing agenda. As the president and chief executive of Seahawk Drilling, he had to lay off 632 employees before filing for bankruptcy — a direct result of President Obama’s anti-energy policies.

“As an American,” he told us, “you never want to look at your own government and say they’re hurting you personally, they’re hurting your business and they’re doing it in a way that’s irresponsible. I’m not very proud of our government right now and the way they handled this.”

Randall Stilley has witnessed firsthand the Obama administration’s job-killing agenda. As the president and chief executive of Seahawk Drilling, he had to lay off 632 employees before filing for bankruptcy — a direct result of President Barack Obama’s anti-energy policies.

Stilley’s company owned and operated 20 shallow-water rigs in the Gulf of Mexico. The lack of energy production — a consequence of Obama’s drilling moratorium and subsequent “permitorium” — led to Seahawk’s demise. Now he’s speaking out, sharing Seahawk’s story in a new video from Heritage and the Institute for Energy Research. (Click to watch.)

It’s an unfortunate example of how policies in Washington are harming American jobs and also squelching energy production at a time when consumers are paying $4-per-gallon for gasoline.

Fortunately, not everyone in the nation’s capital is content with higher prices and fewer jobs. Today the U.S. House considers the first of several bills that directly addresses energy and jobs. Lawmakers will vote today on legislation that requires the Obama administration to conduct oil and natural gas lease sales in the Gulf of Mexico and in the waters offshore Virginia.

It’s a welcome change from the anti-drilling policies first imposed by the Obama administration one year ago. On May 6, 2010, the first moratorium on Gulf drilling took effect, followed by a longer ban that lasted until October. But even after it was lifted, few deepwater permits have been issued.

The long-term implications are disastrous for America. That prompted House Natural Resources Chairman Doc Hastings (R-WA) to pursue a remedy through legislation. Today’s vote would ensure that companies continue energy development by requiring lease sales. Two other bills would speed up the permitting process and craft a long-term plan for offshore lease sales.

“What we’re proposing is to lower gas prices, create American jobs, which ironically will help drive up government revenues, and ultimately, in the wake of all the turmoil we’ve seen in the world, create an environment in which we are energy independent or on a path to energy independence,” Rep. Peter Roskam (R-IL) explained yesterday.

Even without the president’s signature, the legislation has already had a positive impact. After it passed in committee, the Obama administration promised to hold one lease sale in 2011. (Ever since 1958, there has been at least one lease sale every year.)

But while one lease sale is better than none, Hastings isn’t satisfied. He wants the Obama administration to hold four lease sales before June 2012  – including one off the coast of Virginia.

Aside from creating new jobs and discovering new sources of energy, the lease sales contribute a substantial sum of revenue for the federal treasury. In 2008, the offshore industry paid $9.4 billion for bids on new leases. Last year, that figure dropped to $979 million in lease bids.

The drop in revenue is a reflection of the Obama administration’s anti-energy policies. And lease sales are only part of the equation. According to the government’s own Energy Information Administration, production in the Gulf of Mexico will drop by 190,000 barrels per day. That means less money from royalty payments on offshore rigs as well.

Faced with mounting criticism, the Obama administration has defended its policies as a safety precaution following last year’s oil spill. But one year later, the Bureau of Ocean Energy Management, Regulation and Enforcement is issuing drilling permits at such a slow pace that it’s hard to swallow the explanation.

At the same time, the Obama administration and Democrats in Congress are seeking new ways to penalize energy businesses. As Curtis Dubay and Nick Loris write on The Foundry, a proposal from Senate Finance Chairman Max Baucus (D-MT) would significantly increase taxes paid by U.S. oil and gas companies competing abroad — exactly the wrong approach with gas prices on the rise.

Meanwhile, job creators like Leslie Bertucci and Randall Stilley continue to bear the brunt of the Obama administration’s misguided policies. Bertucci, who told us last month about her company’s struggle to survive, has dipped into personal savings to avoid layoffs.

Stilley didn’t have that option at Seahawk. And he’s not optimistic about what the future holds under this administration.

“As an American,” he told us, “you never want to look at your own government and say they’re hurting you personally, they’re hurting your business and they’re doing it in a way that’s irresponsible. I’m not very proud of our government right now and the way they handled this.”

Original Article

Steven Crowder: Barack for Brazil Video: Obama – Brazil is Poor – Another Lie

By Maggie M. Thornton
04/30/2011 – 9:23 am PDT

Barack Obama’s recent lauding of Brazil’s oil industry and their “technology” while bringing U.S. exploration, research and drilling to a stop, has turned and churned the stomachs of many of us. In this video, Steven Crowded expresses our angst in his own creative way, and say “America has over 163 BILLION barrels in untapped oil reserves, enough to replace our imports from the Persian Gulf for over 50 years.”

Brazil

According to the CIA World Factbook, Brazil is the second largest CONSUMER of cocaine in the world. The economy of Brazil is the healthiest of all South American countries and expanding rapidly. They are the seventh largest economy by GDP and purchasing power, in the world.

The state-owned Petrobras Oil and Gas is their largest company. In 2009 Obama loaned the company BILLIONS of dollars – but no easing on regulations to stop the exploration and drilling in the U.S. During the Obama family 2011 Spring Break, Obama defended our loan to Brazil, saying:

Brazil is a poor country,” Obama observed. “They need the money more than we do. By letting them get the oil we can become their customers and help them create jobs and build up their economy.

Wikipedia:

It [Brazil] is also one of the few countries that have successfully managed to reduce economic inequality at a time when everywhere else inequities are deepening. Successive Brazilian governments, of rival political parties, have succeeded in improving education, health and the living standards of millions of impoverished citizens who have now joined a growing middle class. Brazil has an energy policy that has spawned the world’s most vibrant biofuels industry. In 1995, 15 percent of Brazilian school-age children did not go to school. In 2005, this fell to 3 percent, and today Brazil has practically achieved universal basic education.”

Uploaded by StevenCrowder on Apr 28, 2011

Original Post

OMSA: End the De Facto Gulf Drilling Moratorium Now

_______

Uploaded by OMSAssociation on Mar 14, 2011

The Offshore Marine Services Association is calling on the Obama Administration to end its de facto moratorium on oil drilling in the Gulf of Mexico. Watch this video to learn how the President and Interior Secretary Ken Salazar are defying the courts, sidelining Gulf oil workers and harming the American economy.

%d bloggers like this: