“Can we drill your brains?” This was Nancy Pelosi’s big comeback to the Drill Here, Drill Now protestors that she had to face at a Denver press event. She asked if they wanted to start drilling right then and there and then she asked, “Can we drill your brains?” This, from the Speaker of the House of Representatives of the United States. True, over the past two years we have come to expect drivel from our nation’s lawmakers, but the arrogant disregard for the dignity of her high office, for the people of the United States, for the well-worn and clearly understood laws of economics, for anyone or anything that disagrees with Pelosi or the ideological base that she and her party cling to with white knuckles and ragged breath was plainly and tragically on display for all to see outside that old Denver railway station. “Can we drill your brains?”
Never mind that it’s the kind of comeback that I would expect from my 6-year old. Strike that, he’s actually come up with better material and without a big-budget speechwriter at that. You can also lay aside the fact that this infantile nonsense came out of the mouth of the person who is third in line for the White House. One would like to see a tad more decorum from someone in the direct line of succession. No, the really disturbing part of all of this is the fact that Pelosi and company are absolutely committed to the idea that domestic oil exploration and production are useless.
Referring to the protestors as the “2-cents-in-10-years-crowd” she continued to push the idea that domestic oil production would only result in a 2-cent decrease in prices a decade from now, a sentiment echoed by House Majority Leader Steny H. Hoyer, who attacked the demonstrators, calling their chanting “sophomoric” and declaring that “all thinking Americans know”—he stressed the word “thinking” while looking at the crowd—that America doesn’t have a quarter of the word’s fossil fuels, yet uses a quarter of the world’s energy.
Supply and Demand 101
OK, let’s start at the beginning. When supply approaches or exceeds demand, prices drop. When demand approaches or exceeds supply, prices rise. If you want prices high, you limit supply. If you want prices to fall, you increase supply. Unless you live under a socialist economy where everything is controlled, that is how it works. In fact, that is how it always works. It is as reliable as gravity and it always has been.
Now, oil is a commodity, meaning that traders buy and see futures in which they guess whether the price will rise or fall and pay for lots of the commodity according to these predictions. It is also a very good window into the workings of supply and demand. When President George W. Bush lifted the executive ban on offshore drilling, oil prices fell. They did so on the promise of higher oil supplies in the future. Just the idea that the U.S. was going to start drilling and producing its own oil was enough to affect the world oil market. It was not a matter of years between the action (lifting the executive ban on offshore drilling) and the result (lower oil prices) as Pelosi and her ilk are contending. It was a matter of hours. Why? It only took hours because the basic laws of supply and demand work, and for no other reason. President Bush’s announcement and the reaction in the oil market are proof of that, and yet Pelosi and company cannot or will not bring themselves to accept this most basic economic law.
Oil Off-shore, Oil up North, Oil Down South, Oil in the Mountains
As for Hoyer’s comments on the amount of oil we have, I can only say this: The United States has oil. We have lots of oil, and that’s not just according to some fevered right-wing reactionary episode I might be going through. That is according to the scientists of the United States Geological Survey, people who have spent a great deal of time studying this very subject without the hindrance of some political ideology.
The Bakken Formation
The USGS estimates that the Bakken Formation, which sits under North Dakota and Montana, has 3 to 4.3 billion barrels of oil just waiting to be discovered and extracted. That makes it larger than “all other current USGS oil assessments of the lower 48 states and is the largest "continuous" oil accumulation ever assessed by the USGS. A "continuous" oil accumulation means that the oil resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences. The next largest "continuous" oil accumulation in the U.S. is in the Austin Chalk of Texas and Louisiana, with an undiscovered estimate of 1 billion barrels of technically recoverable oil.”
The term, “technically recoverable” means that the oil can be taken using existing technology. That means we can get at as much as 5.3 billion barrels of oil using existing technology. It is merely a matter of choice. Will we or won’t we?
The Green River Deposit
Also “technically recoverable” are our vast shale oil resources. The largest of these deposits is the Green River Deposit, which stretches from Colorado into Utah and Wyoming. Again, from the USGS:
As the Green River oil-shale deposits in Colorado became better known, estimates of the resource increased from about 20 billion barrels in 1916, to 900 billion barrels in 1961, and to 1.0 trillion barrels (~147 billion tons) in 1989 (Winchester, 1916, p. 140; Donnell, 1961; Pitman and others, 1989).
The Green River oil-shale resources in Utah and Wyoming are not as well known as those in Colorado. Trudell and others (1983, p. 57) calculated the measured and estimated resources of shale oil in an area of about 5,200 km2 in eastern Uinta Basin, Utah, to be 214 billion barrels (31 billion tons) of which about one-third is in the rich Mahogany oil-shale zone. Culbertson and others (1980, p. 17) estimated the oil-shale resources in the Green River Formation in the Green River Basin in southwest Wyoming to be 244 billion barrels (~35 billion tons) of shale oil.
Additional resources are also in the WashakieBasin east of the GreenRiver Basin in southwest Wyoming. Trudell and others (1973) reported that several members of the Green River Formation on Kinney Rim on the west side of the WashakieBasin contain sequences of low to moderate grades of oil shale in three core holes. Two sequences of oil shale in the Laney Member, 11 and 42 m thick, average 63 l/t and represent as much as 8.7 million tons of in-situ shale oil per square kilometer. A total estimate of the resource in the WashakieBasin was not reported for lack of subsurface data.
Add up the figures we have and that comes close to another 1.458 trillion barrels of oil. Throw in the Bakken formation and the Austin Chalk and you get 1.463.3 trillion barrels of new oil that we can bring to market and that is without getting cold or getting our feet wet. Across the country, our total shale oil reserve comes to 2.082 trillion barrels of oil that are technically recoverable. That is out of a total world reserve of approximately 2.826 trillion barrels. Add in the nearly 10 billion barrels of oil waiting for us up in Alaska as well as the proven reserves being worked already off our coasts that would bring in at least 5 billion barrels—there could be as much as 18.5 billion barrels waiting out there to be discovered once the Congressional ban is also lifted. Put all this together and what you have, as I stated before, is A LOT of oil, even at our consumption rate of about 6.6 billion barrels a year.
The Bottom Line
According to the USGS, total world oil reserves as of 2000 equaled approximately 1.6083 trillion barrels. That includes every country but it doesn’t include these shale oil deposits.
Now, considering the laws of supply and demand, and considering the sheer volume of oil reserves we have here at home, what do you think would happen if we decided to go ahead and announce that we are going to start a real Manhattan Project style movement to bring all this oil to market?
If you said the price would drop, you get full marks.
Now, what would happen if we actually went ahead and did just that?
The price of oil would fall through the floor, State and Federal governments would get much needed revenue, gas prices would no longer be such an economic burden to both business and people, there would be money to explore alternative fuels and energy sources, small businesses would flourish as less money would be needed for energy and more business opportunities in the energy sector opened up, our security as a nation would improve since we would no longer be funding people who want to kill us…the benefits would be manifold and all we need to make it happen is one little, tiny, really insignificant thing:
The U.S. government: the Legislative, Executive and Judicial branches and all their various agencies, departments, field offices and such—if they cannot support and encourage these efforts to reach real energy independence—need to get out of the way and let America return to the greatness and independence it once enjoyed.
Oh, and make sure someone takes away Nancy’s drill!