- The Washington Times - Friday, August 1, 2008

ANALYSIS/OPINION:

OP-ED:

The first of two parts.

During the Clinton years the liberals in Congress — in league with the environmental lobbyists — blocked drilling in the Alaska National Wildlife Refuge (ANWR), which probably contains the most accessible of our known oil reserves. Today, as we all know, the shortage of known domestic oil reserves has sent the price of gasoline sky-high.

The liberals claim that drilling in ANWR would disturb the lifecycle of caribou and other wildlife. This has proven completely in error. Since the installation of the Alaska Pipeline, which takes oil from the Prudhoe Bay area south to Valdez, the caribou numbers have increased at least 600 perhaps. They actually loiter near the pipeline in the winter because of the heat that it gives off. Further, the environmentalists have depicted the ANWR area as idyllic wonderland that would be destroyed by the drilling. In fact, the drilling will utilize only 1/10th of 1 percent of the ANWR acreage to produce the entire area. This drilling will usually be done in the winter, when the muskeg is frozen. In the summertime the service equipment could sink out of sight. Furthermore, in the summertime the area is inhabited by clouds of mosquitoes.

I can remember an occasion while prospecting in an area south of ANWR in the Nahani River country. I came out of the bush and was resting on a log. Within minutes I counted 256 mosquitoes between my knee and my hip. The ANWR area would be worse. It seems to me that the majority of environmentalists and congressmen who have made these decisions have never been near the area, yet they have controlled its potential.

In addition to ANWR and other government property in Alaska, there are numerous other sites that the nay-sayers have prevented us from using to solve our oil crisis. Cuba, with Chinese help, is drilling within 90 miles of the Florida coast, yet U.S. companies have been prevented from drilling in Florida waters. Extensive reserves have been pinpointed off both coasts, but local politicians will not allow drilling. Isn’t it strange that the New England states will not permit drilling off their coast — Not in My Back Yard — yet they are happy to use the oil recovered from the Gulf of Mexico to supply their heating oil? Fortunately for them, and the rest of the U.S., the Gulf of Mexico has led the world in deep-water drilling, and has recently yielded a number of very rich deposits.

In addition to off-shore deposits in the U.S., there have been numerous new deposits located in the continental U.S. Numerous sites in the Rockies have shown strong potential. There is also a demonstrated enormous potential in secondary recovery in existing fields. Primary recovery will only produce 20 to 30% of the oil in the deposit. Some of the recent technology can now return 70 to 80% of the remaining oil. The Bakken Formation in the western Dakotas and eastern Montana has been re-evaluated by USGS, taking it from a very minor producer to containing upwards of 413 billion barrels; however there are some production problems with this formation. By comparison, Saudi Arabia currently is estimated to have reserves of 269 billion barrels. There is also an enormous amount of potential production in the oil shales in the Rifle, Colorado and surrounding area. Companies from Brazil and Japan have joined a U.S. company to participate in an oil shale recovery project in Utah. I have also seen recently that there is an ongoing oil shale recovery project in Africa. An economical recovery system has not yet been established from these sources, and does not seem to be likely in the near future, but the sky-high price of crude oil has sparked renewed interest. It is estimated that more than a trillion tons of oil shale exists in the United States, which could rival the reserves of Saudi Arabia with proper recovery technology.

There are, of course, a large number of new fields around the world and many more are being drilled. Recent offshore discoveries include Nigeria, Brazil, Mexico, Indonesia, Eastern Canada, etc. A number of on-shore deposits are now being brought into production as well. All of these areas have been explored at enormous expense to the oil companies. A few years ago one of the major oil companies spent over a billion dollars (all values are in U.S. dollars) exploring the Destin Dome, which is offshore Florida. The three drilled wells uncovered an enormous gas field, but the company was not allowed to produce it even though they had paid large sums for the lease rights. In the past, wildcats drilled had a one in ten chance of being successful. Despite the oil company’s need to support these exploratory expenses, today’s economy cannot afford $130 barrel oil. Oil companies have not been totally responsible for the recent rise in the prices at the gas pump; it is the speculators buying oil futures.

Of course the major proven reserves are located in the Middle East, whose governments have had us over a barrel for years. The treatment that both President Bush and Vice-President Cheney received on their recent trips to Saudi Arabia really bugged me — hat in hand, their request for increased production was turned down cold. We have sent billions of dollars to the Middle East, and educated them on all phases of exploration, drilling, and production of oil. We hope that the discoveries documented here will help loosen their grip in the near future.

Time and money are being wasted by our lack of progress in solving the oil crisis. Senator Kay Bailey Hutchison (Texas) has recently proposed a realistic solution to these problems — the Domestic Energy Production Act of 2008. Her bill will allow development of more than a billion barrels of oil and extensive gas reserves, in the trillions of cubic feet. Senator Hutchinson’s bill would also expedite the process for building new refineries and clean, safe nuclear power plants, as well as funding the development of alternative fuels.

None of this will happen, with the consequent reduction in energy costs, unless Congress gets off dead center and acts. I hope Senator McCain takes this information to heart and leads us out of this morass.

Dick Shamp was president of Engineering Services Associated, Inc, which provided engineering consulting services in the fields of oceanography and the environment from 1960-2000.

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