Thursday, August 30, 2007

The Gulf is a little Oily

Have you noticed that every few years some "experts" tell us how many years of oil we have left? And the next time it is even higher?

What's weird is how the years of oil left seems to be directly proportional to the price of oil.

Maybe not so weird. Look at it like this. If it costs $30/barrel to explore a region and the cost of oil on the world market is $20/barrel, that $30 oil doesn't get found and "doesn't exist."

Well, of course it's there, but nobody looks for it or brings it to market. That would be stupid.

This is an interesting article. You see, this is oil that didn't even "exist" 10 years ago. It cost to much to drill that deep and nobody knew for sure that oil was there.
Even better, a recent discovery by Chevron has signaled that soon there may be vastly more oil gushing out of the ultradeep seabeds — more than even the optimists were predicting four years ago. In 2004, the company penetrated a 60 million-year-old geological stratum known as the "lower tertiary trend" containing a monster oil patch that holds between 3 billion and 15 billion barrels of crude. Dubbed Jack, the field lies beneath waters nearly twice as deep as those covering Tahiti, and many in the industry dismissed the discovery as too remote to exploit. But last September, Chevron used the Cajun Express to probe the Jack field, proving that petroleum could flow from the lower tertiary at hearty commercial rates — fast enough to bring billions of dollars of crude to market. It was hailed as the largest publicly reported discovery in the past decade, opening up a region that is perhaps big enough to boost national oil reserves by 50 percent. A mad rush followed, and oil companies plowed more than $5 billion into this part of the Gulf.
The US has huge oil reserves that are untapped and unmapped. If the price of oil were high enough, we'd go after it, to hell with the environment. Seriously, everything's for sale. If the price of gasoline in San Francisco got high enough, even Nancy Pelosi would vote to open ANWAR.

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