An Analysis of the American Oil Crisis

America’s National Interests Hinge on New Energy Technologies

Feb 26, 2009 Nelson Acquilano

Dependence on foreign oil causes many problems. It heightens the deficit, adds to a devaluing of the dollar, and provides means for countries to buy US land and industry.

The question, however, is does the US have enough oil reserves to sustain itself independently from foreign oil? Importing foreign oil has a direct disruption on the American economy, and, again, is not in the best interest of the US. An analysis of the US oil reserves would help provide the data for these answers.

Bakken Formation

In the report, “3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation - 25 Times More Than 1995 Estimate” (U. S. Geological Service, Office of Communication, Reston, VA, April 10, 2008), it was stated that North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of oil in an area known as the Bakken Formation.

The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest "continuous" oil accumulation ever assessed by the USGS.

As an aside, there was a draft study by the late organic geochemist Leigh Price (“Origins and Characteristics of the Basin-Centered Continuous-Reservoir Unconventional Oil-Resource Base of the Bakken Source System, Williston Basin”, Leigh Price, 2006), that provided estimates ranging from 271 to 503 billion barrels of potential resources in Bakken. This study, however, was later corrected by the Energy Information Administration (Office of Oil and Gas, Reserves and Production Division, November 2006.)

Other Reserves

There is a large oil accumulation in the U.S. in the Austin Chalk of Texas and Louisiana, with an estimate of 1 billion barrels of oil. In Alaska, there are several large reserves: the National Petroleum Reserve is estimated to contain 10.6 billion barrels; Prodhoe Bay has already produced 15 billion barrels and has much more; and the Arctic National Wildlife Refuge (ANWR) is estimated to have 10.4 billion barrels (“Alaska’s Northern Coastal Plain: NPR-A, Prudhoe Bay and ANWR”, Institute for Energy Research, July 10, 2008.)

In the article, “Big oil find in Gulf of Mexico May Ease Worry Could Boost U.S. Reserves by 50%” (Kevin G. Hall, McClatchy Newspapers, Pittsburg Post Gazette, September 06, 2006), it was reported that Chevron Corporation made an offshore discovery in the Gulf of Mexico. Chevron believes the lower region of the Gulf could hold reserves of 3 to 15 billion barrels of oil.

According to the National Oil and Gas Assessment site, in the Michigan Basin there are reserves of 990 million barrels, within the Illinois Basin 214 million barrels, within the Black Warrier Basin 6 million barrels, within the San Joaquin Basis 400 million barrels, within the Permian Basis 1.3 billion barrels, etc.

Current Petroleum Production and Needs

According to the Energy Information Administration (Official Energy Statistics from the US Government, FedStats, US Government, Department of Energy), as of December 2007 the US has 21.3 billion barrels of crude oil in reserves, and strategic petroleum reserves of 697 million barrels. Even with refinements, most would acknowledge that the US mainland reserves does not exceed 30 billion barrels in total. Given that the US consumes 20 million barrels per day and exports 1.5 million barrels per day, these reserves would not sustain the US living independently from foreign oil for very long.

Oil versus Alternative Energies

The economic crisis will continue and perhaps heighten should the US not develop these reserves. Anything America can produce will help to lessen the dependency on foreign oil and can only help support the American economy. The real answer, however, is to lessen the dependency upon oil as well as foreign oil. The US needs to continue to focus upon energy conservation. It also needs to examine viable energy alternatives, including hybrid models, and to develop sophisticated technologies to capture alternative sources of energy. Timing has never been more critical.

Resources

National Oil and Gas Assessment

Energy Information Administration

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