OPEC

AND HOW WE ARE BEING SCREWED

The Middle Eastern and African oil cartel, OPEC (Organization of the Petroleum Exporting Countries) controls 44% of the world’s crude oil production and 79% of the world’s crude oil reserves. Thanks to the Environmental Protection Agency, the Department of the Interior, and the Department of Energy, the U.S. is unable to access billions of barrels of oil in Alaska and the continental shelf on both coasts.

This problem isn’t just with oil; it also applies to our coal and natural gas reserves despite the fact that the U.S. has century’s worth of coal and is discovering new reserves of natural gas every day.  And despite the fact that the windmill farms of southern California are killing thousands of birds every year including hundreds of eagles.  Many of which are endangered species.

We have been losing the capacity to refine oil.  According to the U.S. Energy Information Administration, in 2009 there were 148 operable refineries, down from 150 and only 137 refineries were actually operating, down from 141. Regulations have ensured that not one new refinery has been built in the U.S. for over three decades.

This is a sad state of affairs, because, The Americas could and should be the OPEC not the Middle East.  Geologists have long known that the Americas are home to plentiful hydrocarbons trapped in hard-to-reach offshore deposits, on-land shale rock, oil sands, and heavy oil formations.  The U.S. endowment of unconventional oil is more than 2 trillion barrels, with another 2.4 trillion in Canada and 2 trillion-plus in South America -- compared with conventional Middle Eastern and North African oil resources of 1.2 trillion.

The problem was always how to unlock them economically, but for the most part, that problem has been solved.  With the help of horizontal drilling and other innovations, shale gas production in the United States has skyrocketed from virtually nothing to 15 to 20 percent of the U.S. natural gas supply in less than a decade.  By 2040, it could account for more than half of it.  This tremendous change in volume has turned the conversation in the U.S. natural gas industry on its head; we were once concerned about meeting our country's natural gas needs, soon we may worry about finding buyers for the surplus.


Oil production from shale rock, a technically complex process of squeezing hydrocarbons from sedimentary deposits, is just beginning, and analysts are predicting production of as much as 1.5 million barrels a day in the next few years from resources beneath the Great Plains and Texas alone -- the equivalent of 8 percent of current U.S. oil consumption.  If and when drilling is resumed in the Gulf of Mexico, analysts expect an additional 1 to 2 million barrels a day from there.

Brazil is believed to have the capacity to pump 2 million barrels a day from "pre-salt" deepwater resources, deposits of crude found more than a mile below the surface of the Atlantic Ocean that until the last couple of years were technologically inaccessible. Similar gains are to be had in Canadian oil sands, where petroleum is extracted from tarry sediment in open pits.

Oil-thirsty China has recognized the energy potential of the Americas, and they are investing billions in Canada, the United States, and Latin America.  The bottom line is, we have plenty of oil and gas, if the government would just let us produce it.