We have argued here that America's dependence on unstable sources of energy has been the most neglected issue in this year's election. But ignoring the problem or offering small, quick fix solutions won't make it go away. Our contention is that America's dependence on overseas oil and other energy supplies can be drastically reduced through a combination of conservation--especially introducing plug-in hybrid vehicles--and fully developing the immense oil and gas reserves of the North American continent. The President and the new Congress should make this a high, bi-partisan priority. Let's take a look at the big picture of North American oil and gas.
Last year, the U.S. consumed 7.54 billion barrels of oil and 22 trillion cubic feet of natural gas. The tally for the whole world was 31.025 billion barrels of oil and more than 95 trillion cubic feet of gas. As a recent Chevron-Texaco ad campaign reminds us, more than two thirds of the worldís proven oil reserves are found in the Middle East and the three countries that account for the majority of the worldís gas reserves are Russia, Iran and Qatar. While North America still has enough natural gas to meet our needs for many years to come, this fact has profound implications for gas-poor U.S. allies like Japan and Great Britain, who increasingly will rely on liquefied natural gas (LNG) imports from Russia, Iran, Qatar and West Africa to meet their needs.
Mexico
Fortunately, while America consumes more natural gas than it produces, almost all of our gas imports come from Canada. The U.S. itself is a net exporter of natural gas to Mexico. There are large gas fields in Mexican offshore waters, but they remain mostly untapped, because the state-owned monopoly PEMEX excludes foreign partnerships and thereby misses out on the latest deepwater drilling technologies. However, as mentioned in the last Discovery Blog post on energy, the newly elected Calderon government wants to open PEMEX up to partnerships with foreign companies. Mexico's own increasing GDP and electricity demand requires more drilling, especially if Mexican utilities want to sell electricity to U.S. border states. We need Mexican energy, and Mexico needs U.S. dollars and more energy for its own economic expansion.
PEMEX officially estimates that Mexico could have up to 33 billion barrels, but again, this figure probably would be much higher with the benefit of the kind of technologies that Devon and other U.S. companies have used to uncover billions of new barrels beneath the Gulf of Mexico. It must be galling to members of Calderon's government that Castroís Cuba is presently more open to joint offshore drilling ventures than Mexico.
Canada
The biggest future factor affecting how much natural gas Canada can export to us is how much more they will need to boost oil sands production. The Canadians use natural gas to generate steam for in-situ extraction of oil sands (basically cooking the bitumen underground until it seeps up into extraction pipes) and to separate the bitumen from the soil. Canada currently mines 2.5 million barrels per day (bpd) from the Alberta oil sands, and the Canadian Association of Petroleum Producers expects production to reach 4.9 million bpd by 2020. This means that Canada will soon surpass Iran (4.2 mbpd) as the world's 4th largest oil producer, behind only Russia, Saudi Arabia and the U.S. At 175 billion barrels, Canada is second only to Saudi Arabia in proven reserves. The Canadian Natural Resources Ministry and Albertan provincial government agree that Alberta could have more than 300 billion barrels recoverable with modest improvements in extraction technologies employed today.
According to a recent presentation by Gary Weilinger, President of BC Pipeline and Field Services for Duke Energy, only a small share of British Columbiaís immense gas reserves have been tapped, and the pipelines to export this gas to the Pacific Northwest are already in place. Furthermore, the Canadian Centre for Energy estimates that there is 334 trillion cubic feet of gas in the Western Sedimentary Basin shared between Alberta and B.C. Our Canadian neighbors are not going to run out of natural gas or heavy crude oil anytime soon.
United States of America
What about us, how much oil and gas do we have right here at home? The American Conservative Union recently issued a report citing American Petroleum Institute and U.S. Geological Survey estimates of a whopping 103 billion barrels of oil and 637 trillion cubic feet of gas. This estimate includes Alaska, the lower 48 states, and all U.S. offshore waters, but excludes the 700 billion barrels of oil shale reserves estimated to be in Utah, Colorado and Wyoming.
Unfortunately, a huge percentage of these vast potential reserves remain off-limits due to severe restrictions on drilling in the eastern Gulf of Mexico, ANWR, and the Continental Shelf along the Atlantic and Pacific coasts. Meanwhile, the debate in Congress usually comes down to a simplistic, zero-sum choice between conservation while promoting new technologies vs. expanded drilling. The fact of the matter is that we need to do all of these things, and that expanded production and conservation are two sides of the same coin. America and the world are still going to need more oil and gas for many years to come as we transition to new fuels and sources of energy.
In any event, if America truly aims to reduce our dependence on energy imports from politically volatile regions--with all the economic and national security issues that entails--we should make expanding North American energy production our top priority.
The preceding was co-authored by Bruce Chapman and Charles Ganske.
