Do we have enough oil to become independent from OPEC?
The answer isn’t straight forward because there are differing estimates of oil reserves.
The oil industry readily accepts the definition of proven reserves as being, “Proven reserves, those with a reasonable certainty (90%) of being recoverable.”
But the USGS uses two other definitions:
- Technically recoverable resources: all resources that may be recoverable using current techniques without regard to cost.
- Economically recoverable resources: those technically recoverable resources for which the costs of development, including profit, can be recovered.
There is also the problem of defining the type of oil.
There is conventional oil, as produced by conventional drilling, including the use of enhanced oil recovery techniques, such as water or CO2 injection.
Next there is unconventional oil, which is oil derived from shale using fracking. The Bakken formation is an example. Canadian tar sands are also frequently included under this definition.
Third, there is shale oil, which can be produced from the Green River formation in Utah, Wyoming and Colorado. This is actually Kerogen that’s more expensive to refine. It’s unproven whether this can be extracted using fracking, but Shell has demonstrated it can be extracted using an in-situ heating process. A Rand report established a midpoint of recoverable reserves of 800 billion barrels, “more than triple the proven oil reserves of Saudi Arabia.”
So how can we determine whether the United States can become independent from foreign, other than Canada, or OPEC oil?
The EIA estimates that the United States only has 21 billion barrels of proven oil reserves.
This is nowhere near enough oil to allow the United States to become independent from foreign oil.
Canada is reported to have proven oil reserves of 175 billion barrels.
Combining US and Canadian proven reserves, and then dividing by US and Canadian annual consumption, the total reserves would last for less than 30 years without imports from other foreign countries.
But proven reserves are only a fraction of the amount of oil that is probably available.
The EIA estimates that technically recoverable reserves of conventional oil are 198 billion barrels, roughly 9.4 times the proven reserves of conventional oil.
Therefore, the question of undiscovered reserves also becomes an important part of the overall equation.
The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) estimated there are 86 billion barrels of undiscovered conventional oil in the Outer Continental Shelf. This can be added to the EIA estimate.
The USGS in its latest assessment indicates that Canada has 84 billion barrels of undiscovered oil.
It’s also why the recent improvements in technology, e.g., fracking, are so important.
For example, the USGS increased its estimate of technically recoverable unconventional oil from the Bakken formation from 151 million barrels in 1995 to around 4 billion barrels in 2008, which is 25 times the 1995 estimate.
The above estimates do not include natural gas liquids (NGLs) associated with the production of natural gas, that are equivalent to 29% of total worldwide undiscovered oil, not including the United States. Based on current data, NGLs would increase our oil production by around 10%.
On the basis of proven reserves in the United States and Canada, plus the undiscovered conventional oil in the United States and Canada, plus the increased amount of oil from unconventional sources, such as the Bakken formation, we can be reasonably assured we have enough oil in North America to last 100 years.
Add to this the 800 billion barrels potentially available from shale in Utah, Wyoming and Colorado and it becomes clear that we have the necessary oil to become independent from OPEC oil for possibly 200 years.
What’s needed is the political will to open up all the areas where the government currently prevents us from drilling
Note:
Oil Shale Development in the United States, RAND Corporation, for the National Energy Technology Laboratory of the U.S. Department of Energy, 2005
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