Posted by AzBlueMeanie:
The Washington Post's fact checker Glenn Kessler has his Pinocchios, and Annenberg's PolitiFact has it truth-o-meter that goes goes up to "pants on fire!" lie. Blog for Arizona has "the kid" with his own "pants on fire" rating.
Tucson Weekly editor jimmy Boegel this week calls out Tea-Publican candidate for the CD 8 Special Election, Jesse Kelly, for his lie about U.S. oil production. Editor's Note | Tucson Weekly:
When did it become acceptable for a candidate for office to flat-out lie?
I have been pondering this query ever since Jesse Kelly—the GOP choice for Congressional District 8—started claiming that the United States has more oil than Saudi Arabia, and therefore, it's unacceptable for Americans to be paying $4 a gallon for gasoline.
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It is fact—provable, verifiable, absolute fact—that the U.S. circa 2012 does not have the oil that Jesse Kelly claims it does. This is not a matter of spin or nuance or shades of gray or anything that is debatable. Period. It's a fact. Even if you stretch and extend to cover oil shale, the United States today does not have the technology to get usable oil from it.
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I use the Jesse Kelly example just because it's one of the more-prominent and more-recent examples. No matter the party or the politics, when someone starts spreading blatant, verifiable falsehoods, other public servants and civic-minded folks have a duty to call bullshit. Period.
Words to live by. But you are going to need way more information than this blurb from the Weekly.
Jesse Kelly appears to believe that "oil is oil," it's all the same to him. This is just ignorant, as anyone in the oil business will tell you.
First, we need to define some terms and metrics. Glenn Kessler at The Washington Post did a good job of this already:
“Proven reserves,” whether for oil, natural gas or coal, has a very strict definition, in part because reserves are considered actual assets owned by companies. The oil must have been discovered, confirmed and economically recoverable, with at least 90 percent certainty. The level of reserves, in fact, may vary depending on the price of oil, since a higher price may suddenly make some finds economically viable.
The data on proven reserves is collected by the Energy Information Administration, derived from a survey of private companies. EIA data shows that proven U.S. reserves hit a peak of nearly 40 billion barrels in 1970 — after the Prudhoe Bay oil field was found in Alaska — and now stand at about 22 billion barrels. But here’s the strange thing: the United States also had proven oil reserves of 22 billion barrels through much of the 1940s.
How is that possible? New sources of oil kept getting found, more-difficult-to-obtain oil suddenly became more economically viable, new oil-extraction techniques gained favor, and so forth.
This brings us to our next category of oil: undiscovered technically recoverable resources. Oil companies cannot consider this oil an asset. Whether that oil will be recovered depends in part on technology and/or the price of oil.
This oil resource figure is based on technical estimates made by two arms of the Interior Department — the U.S. Geological Survey (for onshore estimates) and the Bureau of Ocean Energy Management, Regulation and Enforcement (for offshore estimates). These estimates add at least 140 billion barrels to what is known as the U.S. endowment of oil, for a total of more than 160 billion barrels.
In other words, eight times larger than just proven reserves.
These estimates change over time. The Bakken Formation in North Dakota, South Dakota, Montana, and southern Canada was discovered in the 1980s and 1990s, but because as much as 500 billion barrels of oil was scattered through layers of shale and sandstone, little could be recovered at the time. But with new production techniques, new estimates suggest that 3.65 billion barrels could be extracted from the Bakken Formation.
“Using horizontal drilling and hydraulic fracturing, operators increased Bakken production from about 3,000 barrels per day in 2005 to 137,000 barrels per day in 2009 and 225,000 barrels per day in 2010,” noted Richard Newell, the EIA administrator in testimony to Congress last year.
“The domestic crude-oil and natural-gas industry has undergone a technological revolution that has revitalized the resource base in the onshore lower 48 states,” Newell added. “The use of horizontal drilling in conjunction with hydraulic fracturing has greatly expanded the ability of producers to profitably produce crude oil and natural gas from low-permeability geologic formations, particularly shale formations.”
And then there is oil that holds tantalizing potential, such as oil shale, that is not yet economically viable, but may be in the future. The Rand Corporation says that between 500 billion barrels and 1.1 trillion barrels may exist in the Green Rover Formation in Colorado, Utah and Wyoming. “The midpoint in our estimate range, 800 billion barrels, is more than triple the proven oil reserves of Saudi Arabia,” (emphasis added) Rand said in a report. [I assume this is one source of Kelly's claim]. But this still is mostly a simmering mirage, in contrast to the other categories of U.S. oil resources.
There are three other useful metrics regarding oil. The first is “production,” which is how quickly the oil comes out of the ground. Even with 2 percent of the world’s oil reserves, the United States has nearly 9 percent of the world’s production (emphasis added), according to BP’s annual survey.
Then there is the “R/P ratio,” which is the length of time the proven reserves will last at the current production rate. BP says the current U.S. ratio is 11.3 years. Does that mean the United States has only 11 years of oil left? No. In fact, the U.S. R/P ratio in 1970 was also about 11 years. The reason the ratio has not changed much is because more oil was found that could be economically recovered.
Lastly, there is consumption. [T]he United States consumes about 20 percent of the world’s oil. (The BP annual review puts it at 21 percent in 2010.) Europe and “Eurasia” (Russia and the former Soviet Republics) consume about 23 percent. China consumes nearly 11 percent, Japan 5 percent and India 4 percent.
Now that we have our definitions and metrics, let's turn to Robert Rapier at Plan B Economics for the answer to the question, Does the U.S. Really Have More Oil than Saudi Arabia?:
People are often confused about the overall extent of U.S. oil reserves. Some claim that the U.S. has hundreds of billions or even trillions of barrels of oil waiting to be produced if bureaucrats will simply stop blocking development. In fact, in a recent debate between Republican candidates contending for Gabrielle Giffords’ recently vacated House seat, one candidate [Jesse Kelly] declared “We have more oil in this country than in Saudi Arabia.” So, I thought it might be a good idea to elaborate a bit on U.S. oil resources.
Oil production has been increasing in the U.S. for the past few years, primarily driven by expanding production from the Bakken Shale Formation in North Dakota and the Eagle Ford Shale in Texas. The oil that is being produced from these shale formations is sometimes improperly referred to as shale oil. But when some people speak of hundreds of billions or trillions of barrels of U.S. oil, they are most likely talking about the oil shale in the Green River Formation in Colorado, Utah, and Wyoming. Since the shale in North Dakota and Texas is producing oil, some have assumed that the Green River Formation and its roughly 2 trillion barrels of oil resources will be developed next because they think it is a similar type of resource. But it is not.
Although the oil in the Bakken and Eagle Ford is being extracted from shale formations, the term shale oil has been used for over 100 years to describe a very different resource. This has led some to confusion over the differences between current production in North Dakota and potential production in Colorado. The oil in the Bakken and Eagle Ford formations actually exists as oil, but the shale does not allow the oil to flow very well. This oil is properly called “tight oil“, and advances in hydraulic fracturing (fracking) technology have allowed some of this oil to be economically produced.
The estimated amount of oil in place (the resource) varies widely, with some suggesting that there could be 400 billion barrels of oil in the Bakken. Because of advances in fracking technology, some of the resource has now been classified as reserves (the amount that can be technically and economically produced). However, the reserve is a very low fraction of the resource at 2 to 4 billion barrels (although some industry estimates put the recoverable amount as high as 20 billion barrels or so). For reference, the U.S. consumes a billion barrels of oil in about 52 days, and the world consumes a billion barrels in about 11 days.
Like the Bakken, the Eagle Ford formation in Texas consists of oil (and natural gas) in tight formations that is being accessed via fracking. The amount of technically recoverable oil in the Eagle Ford is estimated by the U.S. Department of Energy to be 3.35 billion barrels of oil.
Without a doubt, these two formations are a major factor in the current resurgence of U.S. oil production. But the Green River formation is the source of talk of those enormous oil resources — larger than those of Saudi Arabia — and it is a very different prospect than the tight oil being produced in North Dakota and Texas.
The oil shale in the Green River looks like rock. Unlike the hydrocarbons in the tight oil formations, the oil shale (kerogen) consists of very heavy hydrocarbons that are solid. In that way, oil shale more resembles coal than oil. Oil shale is essentially oil that Mother Nature did not finish cooking, and thus to convert it into oil, heat has to be added. The energy requirements — plus the fact that oil shale production requires a lot of water in a very dry environment — have kept oil shale commercialization out of reach for over 100 years.
Thus, while the U.S. might indeed have greater oil resources than Saudi Arabia, U.S. oil reserves (per the BP Statistical Review of World Energy) are only about 1/10th those of Saudi Arabia . The distinction is important. (emphasis added)
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In order to commercially convert the oil shale into oil, a more energy efficient method of producing it must be found (or, one would have to have extremely cheap energy and abundant water supplies to drive the process). I have heard from multiple industry sources that the energy return for producing oil from oil shale is around 4 to 1 (lower than for oil sands production), and that is before refining the oil to finished products. At this sort of energy return, oil sands will continue to be a more economical heavy oil option.
Thus, my prediction is that despite having an oil shale resource that may indeed be far greater than the oil resources of Saudi Arabia (I don’t think I have seen an estimate of Saudi’s total oil resources), the reserve will continue to be close to zero for the foreseeable future because there are still many technical hurdles to overcome to realize a scalable, commercially viable process.
Finally, I would say that if a commercially viable process for shale oil production from the Green River formation is developed, the environmental blowback will be enormous. The production of shale oil is more energy intensive (i.e., has higher carbon emissions) than for the oil sands, it has a high water requirement in a dry climate, and it is potentially a huge new source of carbon dioxide emissions. The environmental protests that would arise in response to a growing commercial shale oil operation would make the Keystone XL pipeline protests pale in comparison.
This environmental concern does not even address the side-effects of hydraulic fracturing ("fracking") resulting in man-made earthquakes and poisoned ground water supplies. Frack! Earthquakes and poisoned water are 'safe, clean energy'?.
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