“Drill, Baby, Drill” and the Price of Gasoline26 Jun
Several decades ago the United States was a major exporter of crude oil. There was plenty of secure, domestic crude oil to make gasoline for passenger cars. Gasoline prices were generally stable.
Now the United States imports 60 percent of its crude oil needs. That means availability of gasoline for 137 million passenger cars is far less secure and can lead to higher prices.
In 11 years, the United States will import 100 percent of its crude oil needs based on known reservoir capacities and current withdrawal rates. Availability and price of passenger car gasoline will be greatly influenced by exporters of crude oil.
Significant new sources of crude oil are not likely in the lower 48 states or Alaska. With the possible exception of the Gulf of Mexico, they are all past peak production.
Oil production jobs in the lower 48 states and Alaska will disappear in about 11 years. Those workers will need to find other employment (e.g., shale gas production?).
New crude oil sources might be discovered in the outer continental shelf (OCS) of Alaska, the Atlantic, Pacific oceans, as well as the eastern and central sectors of the Gulf of Mexico. However, estimates on reservoir volumes lack modern seismic survey data. (See Annual Energy Outlook 2011, Projections to 2035, p 35, Department of Energy.) How can one form a national energy policy based on uncertain reservoir capacities?
Conclusion: It is troubling to think that the misguided, uninformed “Drill, Baby, Drill” folks might influence an urgently needed, yet non existent national energy plan.
Tags: Alaska, Dril Baby Drill, Gulf of Mexico, Imported OIl, Lower 48 States, National Energy Plan, Outer Continental Shelf, Passenger Cars, Price of Gasoline, Seismic Data, Shale Gas