The Arctic oil rush is upon us - July 25, 2008
The Arctic holds a fifth of all the world’s remaining undiscovered oil – as much as 90 billion barrels. This news came out of the United States Geological Survey on Wednesday (press release) and has been covered extensively.
The report has led some to say that now we know how much oil is down there – a non-trivial matter to work out apparently – the Arctic is going to be tapped sooner than anyone may have thought (Canada’s Globe and Mail).
With the Arctic becoming ‘the new Houston’ (Independent) some pundits are predicting the end of the ‘peak oil’ crisis. They are, as it happens, wrong. If oil is peaking, 90 billion barrels here or there doesn't make a great deal of difference -- a few years worth, eked out over a few decades.
The irony of fossil-fuel-exacerbated global warming melting the arctic enough to make it possible to go and drill for yet more of our favourite climate-endangering black sticky stuff is not lost on (Slate)
Image: NASA/JPL/ASF
Comments
How ironic that the pot of gold under the ice - fossil fuel - is what's causing the ice to melt. How crazy are we? We're going to drill for more oil and gas to heat up the world to get more oil and gas to ...... I wrote about the gold rush under the ice at my blog on climate change for the Foreign Policy Assn. a year ago: "The Arctic Heats Up in the News" (http://climatechange.foreignpolicyblogs.com/2007/08/18/the-arctic-heats-up-in-the-news/)
Posted by: Bill Hewitt | July 25, 2008 06:48 PM
Drilling for new oil is only a stop-gap solution. It's not going eliminate our need for foreign oil. It may temporarily reduce our dependency on it, that's all. Their is no supply trouble. Oil prices are not going to go down in price. US corporations don't have any incentive for lower prices, they are part of the cartel.
90 billion barrels is almost 5 times the current proven reserves, however I take what the USGS says with a grain of salt since the Bush administration has put so much influence over other government agencies. This is most likely a politicized statement to coincided with other policies. For example, the Enron conspiracy with the faux California energy crises during 2000-2001, the administration used that as reasoning for opening up oil drilling as well.
We need real energy policy reforms for the future that will not not come under this administration, such as those introduced by Jimmy Carter. With that said, I have nothing against drilling for more oil as long as the state agrees to it, it should be a state right, not a federal law.
Posted by: joe | July 25, 2008 08:37 PM
In the 1800's wood as a fuel source became scarce. The price went up. Increasing prices yeilded both increasing supplies and pursuit of alternatives. Wood as a fuel source is still around. Now, 200 years later the price of one of the alternatives to wood is going up. Increasing prices will generate increasing supplies. That is, until a balance is achieved between price and supply. Meanwhile, alternatives are being enthusiastically pursued. Hybrid cars are just the beginning. Solar panel on your roof are as well. We didn't run out of wood. We didn't run out of fuel. We won't run out of oil. We won't run out of fuel. But the transition from one type of fuel to another will probably cause some anxiety.
Dr. Ashley.
Posted by: Daniel C. Ashley, Ph.D. | July 27, 2008 07:53 PM
The problem with proven reserves in the US is a huge chunk of them are in South Texas where ExxonMobil, Chevron, Shell and some other major own large old leases that allow for one well to hold the acreage. The SEC allows for an accounting strategy to book "proven reserves" as capital assets. So, those leases aren't getting developed. Exxon owns 600,000 acre lease called the King Ranch that sits there. I live on a 38,000 ranch with huge proven reserves, and ExxonMobil and Chevron do the bare minimum. If a company has "proven reserves" booked as an asset, it makes no sense to develop them because every dollar in sales is actually a loss on the books. Also, many of these wells have been shut in since 1996, and that can make them harder to produce, should the SEC rules ever change.
Posted by: elizabeth | July 29, 2008 01:08 PM