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Could the U.S. Affect Oil Prices by Developing More Resources?
May 17, 2008 4:33 PM
by
findingDulcinea Staff
Oil prices have reached record highs, meaning some countries are looking for additional oil reserves. But should they go after them?
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The fact that the U.S. has untapped oil reserves makes little sense when oil prices have surpassed $100 a barrel, writes Investor’s Business Daily.
Other countries have already begun looking for additional resources in reaction to record-breaking oil prices.
Brazil, for example has made two announcements about large oil field discoveries in recent months. “When prices soared, Brazil got busy,” according to The Guardian.
The United States reportedly has several billion barrels of its own untapped resources.
In 2006, a team of energy companies announced that they’d discovered an oil field in the deepwater Gulf of Mexico that held between 3 billion and 15 billion barrels of recoverable oil.
And in April 2008, the U.S. Geological Survey announced that the Bakken shale, a geological formation covering parts of North Dakota, South Dakota and Montana, could possibly hold up to 4.3 billion barrels of recoverable oil.
But the cost of developing these resources can run into the millions, which has caused some to question whether they should be accessed at all, especially when alternatives like biofuels exist.
However, “We need oil,” Investor’s Business Daily concluded. “And fortunately we have lots of it. But because of Congress’ unwillingness to go after it, we’re leaving billions of barrels untapped, driving up prices and causing untold economic hardship. This madness must end.”
Other countries have already begun looking for additional resources in reaction to record-breaking oil prices.
Brazil, for example has made two announcements about large oil field discoveries in recent months. “When prices soared, Brazil got busy,” according to The Guardian.
The United States reportedly has several billion barrels of its own untapped resources.
In 2006, a team of energy companies announced that they’d discovered an oil field in the deepwater Gulf of Mexico that held between 3 billion and 15 billion barrels of recoverable oil.
And in April 2008, the U.S. Geological Survey announced that the Bakken shale, a geological formation covering parts of North Dakota, South Dakota and Montana, could possibly hold up to 4.3 billion barrels of recoverable oil.
But the cost of developing these resources can run into the millions, which has caused some to question whether they should be accessed at all, especially when alternatives like biofuels exist.
However, “We need oil,” Investor’s Business Daily concluded. “And fortunately we have lots of it. But because of Congress’ unwillingness to go after it, we’re leaving billions of barrels untapped, driving up prices and causing untold economic hardship. This madness must end.”
Headline Link: Oil prices hit new high
On April 15, 2008, oil prices reached a new high of $114 a barrel, while the nationwide average price of gasoline set a record at $3.39 a gallon.
Source: The Boston Globe (Associated Press)
Opinion & Analysis: What we have is expensive to extract
“America’s energy crunch is sadly self-inflicted,” according to Investor’s Business Daily. “While others around the world engage in a mad dash to find more oil reserves, the U.S. seems to think $111-a-barrel oil won’t be affected by more supply.”
Source: CNNMoney
We can obtain at least some oil from resources like the Bakken Shale but it “will cost dearly” to retrieve it, according to an editorial in the Toronto Star. “What’s perplexing, however, is the oil industry’s determination to go after this expensive, dirty stuff when other, cleaner alternatives do exist.”
Source: Toronto Star
Background: The world’s new and undeveloped energy resources
A senior energy official in Brazil recently announced that the country’s newly-discovered Carioca field could hold up to 33 billion barrels of petroleum. Some industry experts are skeptical of this high number, but a professor of energy policy at Oxford University said he wasn’t surprised. “Whether it is attributed to Carioca itself or elsewhere it should not distract from the point that there is plenty of oil around,” he said.
Source: The Guardian
In 2006, Chevron Corporation, Devon Energy and Statoil ASA announced an oil discovery in the deepwater Gulf of Mexico, highlighting the potential of finding energy resources further offshore. Estimates indicated that 3 billion - 15 billion barrels of oil could be recovered from the site. The concern, though, was whether producing the oil would be profitable. The costs of installing a production facility in the area were estimated at $250 million - $500 million.
Source: The Washington Post
The U.S. Geological Survey reported that the Bakken formation could hold up to 4.3 billion barrels of recoverable oil. The field was discovered in 1951, but drilling has been limited. New horizontal drilling technology and high oil prices could make development there more feasible, according to the North Dakota Petroleum Council.
Source: Calgary Herald
Related Topics: Oil prices, peak oil and biofuels
Oil prices
U.S. gas prices have broken records in 2008, but some experts believe prices could go significantly higher.
Source: findingDulcinea
Peak oil
Many experts believe that world supplies of oil are leveling off and may soon begin to drop permanently. FindingDulcinea suggests 10 practical ways to start reducing energy consumption now.
Source: findingDulcinea
Biofuels
Biofuels have been touted as a potential solution to limited conventional energy supplies and as a means to help the environment. However, in places like the U.K., some officials are wondering if requirements to use biofuels were “overhasty” because there is insufficient data on the carbon footprint left by biofuels production.
Source: findingDulcinea
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