Friday, May 20, 2011

U.S. Contains Enough Oil and Gas Reserves to Fuel Country for 100 years

The US uses 25 percent of the world's oil, but has only 3 percent of the world's oil reserves. That 3 percent, which amounts to 21 billion barrels of oil, refers to something called "proven reserves," which is oil ready to be pumped using current technology and under current environmental rules. At current use rates, it will last eight years. According to the U.S. Department of the Interior, US also have 134 billion barrels of "estimated reserves." That's oil that could be recovered if off-shore oil, Anwar, and the massive discoveries in Montana and North Dakota are opened and new technologies like horizontal drilling are employed. That gives US another 51 years.

Besides the U.S. has the world's largest supply of oil-shale, amounting to 2.2 trillion barrels of oil. It's more expensive and tougher to recover, but US is already getting such oil from Canada. If oil prices per barrel remain above $100, digging out these reserves will be profitable. Read more about this reserves issue

Oil companies invest hundreds of billions to do so.Finding, recovering, and refining oil is hard work. The rate of return on their investment is in line with most other businesses. They provide lots of jobs, and produce something US need. Oil stocks is the part of the plan for US citizens for their retirement plans.

A study by Wood Mackenzie, also released at the event, shows that increased access to America’s oil and natural gas reserves could, by 2025, create 530,000 jobs, generate $150 billion in taxes, royalties, and other revenue for the government, and “boost domestic production by four million barrels of oil a day,” stated API in a press release.

On a related note, North Dakota is one of the fastest growing oil producing regions in the United States, where 80 million barrels were produced in 2009, the report states.

With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel.

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