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Page added on February 23, 2013

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Peak Oil Will Be Fully Discredited When Peak Government Is Realized

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President Obama recently nominated Sally Jewell to head the Department of Interior. Her bona fides include growing a business — Recreational Equipment Inc. (REI) — to nearly $2 billion in revenue last year. But in her new job, the question is whether Secretary Jewell will grow America’s vast, untapped domestic energy resources.

Jewell is now at the gulf between what is and what could be. The Interior Department is responsible for oil and natural gas drilling off the U.S. coast – which is to say, the agency is wholly responsible for the complete absence of new drilling off the U.S. coast.

Consider ExxonMobil’s $14 billion plan to develop one of the largest oil fields in the North Atlantic. That drilling will be off Canada’s Newfoundland. But the Hebron oil field is believed to extend southward into U.S. waters with its billion-barrel potential. Unfortunately, the United States won’t see a drop of it — unless Secretary Jewell and others in the Obama hierarchy open our coast. Simple permission, not taxpayer funds or new regulations, is all that is required.

From offshore oil to previously inaccessible gas deep in the earth, the federal domain is poised for an energy renaissance. The United States could become the world’s largest producer of oil by 2017, surpassing Saudi Arabia and Russia, according to the International Energy Agency (IEA). By 2035, the United States will be nearly energy self-sufficient.

The prospect of U.S. self-sufficiency overturns a half-century of conventional wisdom. Oil and gas critics have long warned of “peak” supply – the point at which extraction is at its highest possible rate. At this “peak,” the wells will start running dry for good. But this theory is being revealed as nothing more than a myth—and scare tactic by those favoring politically correct, market incorrect energies such as ethanol, wind, and solar.

The idea of peak hydrocarbons seemingly found a scientific basis in the 1950s when M. King Hubbard, associate director of the Exploration and Production Research Division at Shell Oil Company, quantitatively mapped the future of oil production. Hubbard’s predictions gained steam when the nation confronted the energy shortages of the 1970s — exactly the time he had projected that domestic oil and natural gas output would peak.

Over the next decades, new voices warning of “peak oil” and “peak gas” emerged. Few thought to reject the Hubbard paradigm, even though it relied heavily on neo-Malthusian notions of a world of static technology and a known, fixed supply.

But technological advances in the way we find and tap oil and natural gas have propelled estimates of available reserves far beyond anything Hubbard could have imagined.

Today, according to both the IEA and the U.S. Department of Energy, America has an astounding 1.4 trillion barrels of recoverable oil, the majority of which is oil shale in the Rocky Mountain West. Large crude oil deposits can also be found offshore in portions of Alaska. When combined with the recoverable oil reserves of Canada and Mexico, North America has more than 1.7 trillion barrels of oil –more oil than the world has used since the first oil well was drilled in Pennsylvania 150 years ago.

It’s not a guarantee that all these reserves can, in fact, be developed. But if American energy producers are able to tap into even a fraction of this supply, our domestic energy production could well outstrip that of Saudi Arabia, which is currently the largest oil producer and exporter of total petroleum liquids in the world with a reserve base estimated around 260 billion barrels.

Already, U.S. oil production has surged to its highest level in a decade. And that’s with minimal access to enormous Federal resources, currently closed to exploration. Between 2007 and 2012, a full 96 percent of increased domestic oil production was driven by development on state and private lands. And with this prospecting the estimates of U.S. oil reserves will certainly increase. Domestic supplies of technically recoverable oil could fuel 200 years of usage at current consumption rates.

America’s natural gas bounty also defies the naysayers. The U.S. Energy Information Administration estimates that the United States has approximately 318 trillion cubic feet of extraction-ready natural gas reserves. Estimated total reserves have increased annually for the past 12 years, much like a growing store restocking its shelves. Approximately 2.7 quadrillion cubic feet of gas reserves are recoverable — enough to supply the United States for 110 years at current rates of consumption. This estimate, like that of oil, has increased over time, not “depleted” with production.

Opening Federal lands — on and offshore – has another reward: $36 billion in annual new federal revenue (not to mention a $127 billion boost to GDP) over the next seven years, according to a new study. This alone would close more than three percent of the current annual federal deficit.

Hubbard is history, disproven at last. The U.S. is at the center of the oil, gas, and coal world. The sooner federal officials relent, the sooner good jobs and much needed revenue can flow. It is a win-win-win for producers, consumers, and taxpayers at a most opportune time.

It’s past time for politics to legalize natural economics.

Forbes



19 Comments on "Peak Oil Will Be Fully Discredited When Peak Government Is Realized"

  1. Feemer on Sat, 23rd Feb 2013 9:01 pm 

    america will not become energy independent, all the hydraulic fracturing wells deplete with 2-4 years, and decline at around 20-40% a year, 7 years from now, there won’t be anything left to frack, and all the wells will be depleted, and we won’t have the glut of natural gas we have now, because we exported most of it, and over used it. The shale oil has such bad energy return on energy invested, it will hardly be gone after. we may have billions of barrels of POTENTIALLY recoverable oil and gas, but hardly any of it is recoverable. The next 7 years will see abundant natural gas, and cheaper oil prices, but when this bubble bursts, we will have very high energy prices, and nothing left

  2. Bill on Sat, 23rd Feb 2013 9:27 pm 

    america will be energy independent when start using wood for fuel again…probably the IEA got the year right 2035.

  3. cottager on Sat, 23rd Feb 2013 11:34 pm 

    Wast isn’t the right word, I’d like – enormous 🙂 You got it.

  4. Pacman on Sun, 24th Feb 2013 12:01 am 

    ‘Hubbard is history, disproven at last’ – This statement can only be true whilst talking about just planet earth if it is discovered that oil is spontaniously created underground at incremental rates above current usage. If the author intended to suggest that we may not yet have reached peakoil I’d take him more seriously but since that’s not what he is saying then the whole article can be assumed to be biased factualy dubious bullshit

  5. Pacman on Sun, 24th Feb 2013 12:01 am 

    ‘Hubbard is history, disproven at last’ – This statement can only be true whilst talking about just planet earth if it is discovered that oil is spontaniously created underground at incremental rates above current usage. If the author intended to suggest that we may not yet have reached peakoil I’d take him more seriously but since that’s not what he is saying then the whole article can be assumed to be biased factualy dubious bullshit

  6. Plantagenet on Sun, 24th Feb 2013 12:02 am 

    Irregardless of the politics, its just plain stupid for the Obama administration to let the Canadians suck the Hebron oil field dry without at least getting the oil on the US side of the border for the US.

  7. DC on Sun, 24th Feb 2013 1:14 am 

    RoFL! This is even worse than Rig Porn and Oil Gas Urinal! And when it comes to BS, I thought those guys had it covered. Maybe this guy used to write for one of them?

    Hey Plant, stop worrying my man. There is no ‘Canadian’ oil industry. Just US(mainly) and a few others, EU, Asian. Ottawa gets its marching orders from the US oil companies,just like Washington DC does, so any oil those dope-smoking commie Canadians suck up to the surface, is allready de-facto owned by the US Oil global Oil cartel.

  8. DC on Sun, 24th Feb 2013 2:12 am 

    And another salient point worth mentioning.

    That ‘billion’ barrel field ~

    World consumption: 12 days

    US consumption:, if it hogged 100% of the field(which they likely will)

    55 Days.

    IF the fields 1 billion barrels were distributed equally around the world, the US’s ‘share’ would full-fill US ‘needs’ for all of 4 days.

    Time to extract that billion barrels?

    10 years? plus or minus a few?

  9. BillT on Sun, 24th Feb 2013 2:18 am 

    Perspective people… 1 billion barrels is 2 months supply for the US. And trillions will NEVER be recovered. Never!

    There is more oil and NG in the ground than will ever be recovered for the same reason there is more gold in the ocean than has ever been mined. EROEI. It is unrecoverable for many reasons and therefore, will NEVER be recovered.

  10. rollin on Sun, 24th Feb 2013 2:37 am 

    So they are going to develop another 2 months of US oil use.

    The fields off New Foundland were discovered in the 1980’s. Why so long to develop them?

  11. DC on Sun, 24th Feb 2013 2:41 am 

    Guess who owns 36% stake in Hebron, why its…..

    Exxon-Mobil 36% (Also the project operation)

    Followed by

    Chevron 27%

    Then Statoil 10%

    All 3 of these corporations have ‘Canada’ in there name. Which is fitting since both Exxon-Mobil and Chevron are some the most powerful of Canadian corporations. Statoil ‘Canada’ is another leading Canadian(cough) corporation as well.

    Oh, and I almost forgot. The % owned by the people of Newfoundland….get ready for it…………..

    4.9%!( Damn greedy newfies). The Premier of NL. had to negotiate hard for that 4.9% for his province(he is quite proud of that 4.9% too). Which of course, implies the people of NL. could have been completely shut out if the amerikan oil companies that actually CONTROL the friggen project felt like it.

    None of the above in any way explains(in part) why amerikans are the most hated people in the world.

  12. GregT on Sun, 24th Feb 2013 3:48 am 

    DC,

    While I agree with all that you have said, it is not the American people’s fault. They have been willfully indoctrinated and mislead by a corporately controlled media and government.

    There are a lot of very good people in the US, just like anywhere else. It is the power elite that are responsible for the world’s hatred of America.

  13. mike on Sun, 24th Feb 2013 9:28 am 

    hmm gregT, with your logic I guess Germans weren’t to blame under the rule of the Nazis then?

  14. SilentRunning on Sun, 24th Feb 2013 9:53 am 

    The ONLY way that Peak Oil will be discredited is when the laws of logic, mathematics and physics are overturned.

    Good luck on that one.

    But in the meantime, the paid shills of the oil industry will continue to try desperately to overturn reality with their self-serving campaign of lies.

  15. BillT on Sun, 24th Feb 2013 12:22 pm 

    The conditions in the Us were NOT forced upon the citizens, they allowed and in many cases asked for them. Not thinking that anyone might actually take advantage of them was their mistake.

    After all, aren’t Americans supposed to be loved by the rest of the enslaved world? Weren’t they showered with tribute from all of these ‘oppressed’ countries that were literally dying for ‘democracy’? You know, like Iraq and Afghanistan, and Libya and…

    If my sarcasm is too strong…too bad. No, Americans deserve what they are getting because they will not fight for anything else. Like Nazi Germany, they allowed this to happen.

  16. econ101 on Sun, 24th Feb 2013 3:53 pm 

    How much is a trillion?

  17. Ken300 on Sun, 24th Feb 2013 5:29 pm 

    FORBES —- A right wing infomercial for the benefit of the top 1%.

    Can you take anything they print seriously. They always have an agenda.

  18. GregT on Sun, 24th Feb 2013 9:12 pm 

    Sorry Guys,

    I have a problem with painting everyone with the same brush. I have met many Americans that do not agree with, and have fought against, the policies of their government. Just because they happen to be in the minority, does not mean that they deserve what the majority have imposed upon them.

  19. WhenTheEagleFlies on Mon, 25th Feb 2013 8:48 pm 

    Will Forbes please hire an honest petroleum geologist. Sheesh! Enough already!

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