Adira Energy Ltd. announces that Modiin Energy L.P, on behalf of the Gabriella License consortium, including Adira and Brownstone Energy, has executed a detailed drilling contract with Noble International Ltd (“Noble Drilling”). The Agreement provides for the drilling of the Gabriella License by the Noble Homer Ferrington semi-submersible rig prior to the government regulated spud date of June 30, 2013.
Jeffrey E. Walter, Chief Executive Officer of Adira Energy stated: “Another major milestone has been delivered to Adira’s shareholders with the signing of the Homer Ferrington rig contract. This will enable us to drill the highly anticipated Gabriella License which is Adira’s core asset. With over 110 million barrels of contingent oil resources, this project is important to Adira as well as a fundamental key in moving forward on the oil potential offshore Israel. The Homer Ferrington has drilled some of the most successful discovery wells in the Eastern Mediterranean including “Leviathan” offshore Israel and “Block 12” offshore Cyprus. ”
The Gabriella License is located approximately 10 kilometers northwest of Tel Aviv, in the waters offshore Israel. The block covers an area of approximately 392 square kilometers (97,000 acres) and is in water depths that range from 100 meters on the east side of the block to just over 425 meters on the southwest side of the block. Adira holds a 15% Working Interest in the Gabriella License plus a 15% back-in option from Modin Energy, to be exercised within six months of discovery, at cost.
According to President Obama, the United States contains only 2 percent of the planet’s proven oil reserves, Of course, he’s right — to a point. In classic fashion, he’s using a technicality to skirt the facts and keep the myth of energy scarcity alive. The reality is that the U.S. has enough recoverable oil for the next 200 years, despite only having 2 percent of the world’s current proven oil reserves.
Proven oil reserves are not all of our oil resources—not even close. In fact, proved reserves represent a tiny portion of our total oil resources. Proven (or proved) oil reserves are reserves that have already been discovered, typically through actual exploration or drilling, and which can be recovered economically. That estimate does not include oil that we know about, yet are unable to access because of regulatory barriers. For example, the billions of barrels of oil in ANWR are not included in our proved oil reserves. So let’s look at the facts.
Currently, the United States has 1,442 billion barrels of technically recoverable oil, but only about 20 billion barrels are considered proven oil reserves.[ii] That is partly because the federal government is denying access to hundreds of millions of acres oil-rich federal lands: the Alaskan National Wildlife Refuge, the Naval Petroleum Reserve-Alaska, federal waters off the Atlantic and Pacific coasts, at least 45 percent of the Gulf of Mexico, the Chukchi and Beaufort Seas, and oil shale on federal lands in Colorado, Utah, and Wyoming, to name a few. In the case of oil shale (an oil composed of kerogen), technology needs to be perfected to make its production viable, but this will not happen until the land is leased. Regrettably, the Department of Interior has stopped a leasing program Congress directed it to undertake.
Proved Oil Reserves Are Not Static
Let’s take a look at history. In 1944, U.S. proven oil reserves were 20 billion barrels — about the same as they are today. Yet, between 1945 and 2010, the United States produced 167 billion barrels of oil. In other words, the United States produced over 8 times more oil than the amount of proven oil reserves it had in 1944. How can that be? The answer is that proven oil reserves are not stagnant because people keep looking for oil. Proven oil reserves keep changing, are officially recorded every year, tallied country by country, and published in the Oil and Gas Journal, among other publications. And due to U.S. entrepreneurship and ingenuity, more reserves are found and proven each year.
What happens is one or more of the following: 1) technology is found that converts hard-to-produce resources into proven reserves, 2) oil prices increase to allow more expensive types of oil to be produced, and/or 3) companies are able to purchase additional leases and explore for new basins of oil. An example of the first case where technology enables oil resources to become proven reserves is hydraulic fracturing and horizontal drilling used to produce shale oil resources, most notably in North Dakota. North Dakota now ranks third among the states in oil production.[iii] Its proven reserves have increased 25-fold in 13 years, and are likely to grow much larger. An identical increase from the rest of the United States would result in US reserves of 500 billion barrels, or almost twice those of Saudi Arabia.
What Does More Recent Data Look Like?
So, is this an historic anomaly? No. Let’s look at more recent data. In 1980, according to the Energy Information Administration, the United States had 31.3 billion barrels of proven oil reserves. However, between 1980 and 2010, the United States produced 77.8 billion barrels of oil and still had 20.7 billion barrels of oil reserves left. In other words, between 1980 and 2010, the United States produced 2.5 times the amount of oil as it has proven oil reserves in 1980.
Conventional and Unconventional Oil
Proven oil reserve data for the most part are comprised of conventional oil resources. Yet, today unconventional sources of oil are being produced. For example, Canada has proven reserves of conventional oil of only 5 billion barrels, but has 170 billion barrels of oil sands–a heavy oil whose production is based on unconventional technology –either by open pit mining or in-situ techniques, which reduce the viscosity of the oil by injecting steam and/or hot air into the oil sands. Canada’s proven oil reserves are officially set at 175 billion barrels, because it requested that oil sands be included in its proven oil reserve estimate. Canada now ranks third in the world in proven reserves, behind Saudi Arabia and Venezuela.[iv]
Proven oil reserves are not stagnant. They are continually changing as companies explore, find and produce oil. Declaring that “the U.S. has only 2% of the world’s oil is akin to saying that the only gasoline we will have is that which is in our tanks.” The president should know better, and if he does not, his Secretaries of Energy and Interior should tell him.
So, what can be done to increase our oil reserves? First and foremost, the United States needs to open more federal lands and waters to oil leases. Currently, only about 3 percent of government property is leased for finding energy. Once that is done, American ingenuity will take over to explore and produce those resources. ”According to a Gallup poll, an overwhelming number of consumers — 85% — say Obama and Congress should take “immediate” action to keep a lid on (gasoline) prices.”[v]
It is time our government stops misleading the American public and starts owning up to the reality of our energy situation – we are a nation rich in energy resources with poor policies that do not allow us to access them.
- Big Lies on Big Oil (gompsparky.wordpress.com)
- President Obama’s Energy Lies (inquisitr.com)
- Big Lies on Big Oil – David Limbaugh – Townhall Conservative Columnists (gds44.wordpress.com)
- Will Release of Strategic Oil Reserves Matter? (247wallst.com)
By JOHN MERLINE, INVESTOR’S BUSINESS DAILY
Posted 03/14/2012 01:03 PM ET
When he was running for the Oval Office four years ago amid $4-a-gallon gasoline prices, then-Sen. Barack Obama dismissed the idea of expanded oil production as a way to relieve the pain at the pump.
“Even if you opened up every square inch of our land and our coasts to drilling,” he said. “America still has only 3% of the world’s oil reserves.” Which meant, he said, that the U.S. couldn’t affect global oil prices.
It’s the same rhetoric President Obama is using now, as gas prices hit $4 again, except now he puts the figure at 2%.
“With only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices,” he said. “Not when we consume 20% of the world’s oil.”
The claim makes it appear as though the U.S. is an oil-barren nation, perpetually dependent on foreign oil and high prices unless we can cut our own use and develop alternative energy sources like algae.
U.S. Awash In Oil
But the figure Obama uses — proved oil reserves — vastly undercounts how much oil the U.S. actually contains. In fact, far from being oil-poor, the country is awash in vast quantities — enough to meet all the country’s oil needs for hundreds of years.
The U.S. has 22.3 billion barrels of proved reserves, a little less than 2% of the entire world’s proved reserves, according to the Energy Information Administration. But as the EIA explains, proved reserves “are a small subset of recoverable resources,” because they only count oil that companies are currently drilling for in existing fields.
When you look at the whole picture, it turns out that there are vast supplies of oil in the U.S., according to various government reports. Among them:
At least 86 billion barrels of oil in the Outer Continental Shelf yet to be discovered, according to the government’s Bureau of Ocean Energy Management.
About 24 billion barrels in shale deposits in the lower 48 states, according to EIA.
Up to 2 billion barrels of oil in shale deposits in Alaska’s North Slope, says the U.S. Geological Survey.
Up to 12 billion barrels in ANWR, according to the USGS.
As much as 19 billion barrels in the Utah tar sands, according to the Bureau of Land Management.
Then, there’s the massive Green River Formation in Wyoming, which according to the USGS contains a stunning 1.4 trillion barrels of oil shale — a type of oil released from sedimentary rock after it’s heated.
A separate Rand Corp. study found that about 800 billion barrels of oil shale in Wyoming and neighboring states is “technically recoverable,” which means it could be extracted using existing technology. That’s more than triple the known reserves in Saudi Arabia.
All told, the U.S. has access to 400 billion barrels of crude that could be recovered using existing drilling technologies, according to a 2006 Energy Department report.
When you include oil shale, the U.S. has 1.4 trillion barrels of technically recoverable oil, according to the Institute for Energy Research, enough to meet all U.S. oil needs for about the next 200 years, without any imports.
And even this number could be low, since such estimates tend to go up over time.
Back in 1995, for example, the USGS figured there were 151 million barrels of oil in North Dakota’s Bakken formation. In 2008, it upped that estimate to 3 billion barrels to 4.3 billion barrels — a 25-fold increase. Now, some oil analysts say there could be as much as 20 billion barrels there.
To be sure, energy companies couldn’t profitably recover all this oil — even at today’s prices — and what they could wouldn’t make it to market for years. But from the industry’s perspective, the real problem with domestic oil is that the government has roped off most of these supplies.
The Alaska National Interest Lands Conservation Act of 1980, for example, put a huge swatch of land off-limits to drilling. And in 1982, Congress blocked access to most of the oil in the Outer Continental Shelf. Much of the oil on federal lands is also off-limits.
Obama and others say the industry’s claim about lack of access isn’t true, since they aren’t even using many of the offshore leases they already have. The industry counters that this is misleading, since a company needs the lease before it can determine if any oil exists there — a potentially time-consuming process.
In any case, any attempt to get at these vast new oil supplies is sure to face fierce opposition from environmental groups worried about oil production’s direct impact on the environment, as well as global warming worries.
But given today’s prices, most of the public is willing to expand drilling offshore, in ANWR, and in shale oil reserves, according to the latest IBD/TIPP poll.
“This is not a geological problem — it’s a political problem,” said Dan Kish, senior vice president for policy at the Institute for Energy Research. “We’ve embargoed our own supplies.”
- Energy: Texas Tops Finds From Brazil to Bakken as Best Prospect (mb50.wordpress.com)
- Are Obama’s Oil Numbers Rigged? (foxnews.com)
- Exposing the 2 percent oil reserves mythInstitute for Energy Research (mb50.wordpress.com)
- The US Is Sitting On A 200-Year Supply Of Oil (businessinsider.com)
- Obama Misleads on Oil Reserves, Networks Defend Him, Fail to Fact Check (newsbusters.org)