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Michel C. Zala, Editor and Publisher
Fluff Zala, Foreign Policy Advisor
Bisoux Zala, Economy & Energy Consultant


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Tuesday, July 29, 2008

Energy Discussion - How Much Oil Does The US Really Have


ACCESS TO DOMESTIC SUPPLY (Review this website for facts and figures)


The cost of energy has become a top concern for Americans. According to a Pew poll in May 2008, voters ranked energy as a higher priority than social security, Iraq and terrorism. Zogby reported that 74% of voters support increased energy exploration. A poll from Fox News shows that 76% of voters support immediate measures to begin offshore drilling. Take your pick of national polls, and chances are you will find numbers that show Americans asking for more energy exploration here at home.
According to federal government data, the U.S. has enough oil and natural gas to fuel more than 65 million cars for 60 years and enough natural gas to heat 60 million homes for 160 years. In fact, the U.S. government estimates that there are 30 billion barrels of undiscovered technically recoverable oil on federal lands currently closed to development.
In addition, a recent
study by ICF International
shows that more access to domestic energy resources could generate $1.7 trillion in government revenue, create thousands of new jobs and enhance America’s energy security by significantly boosting energy production here in the United States.
It is clear, from recent polls, that Americans want policies that will allow U.S. companies to develop natural resources here in the United States that will generate revenue, create jobs and increase our energy security. Congress should listen to the American people. Our nation also needs increased energy efficiency and more energy from all sources, including domestic oil and natural gas for the benefit and security of American consumers.

Drilling and Blissful Ignorance
by Charles Krauthammer
>>>>>Does Pelosi imagine that with so much of America declared off-limits, the planet is less injured as drilling shifts to Kazakhstan and Venezuela and Equatorial Guinea? That Russia will be more environmentally scrupulous than we in drilling in its Arctic?
The net environmental effect of Pelosi's no-drilling willfulness is negative. Outsourcing U.S. oil production does nothing to lessen worldwide environmental despoliation. It simply exports it to more corrupt, less efficient, more unstable parts of the world -- thereby increasing net planetary damage>>>>

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The Latest:
I can't help myself - but the latest cheap shot came from Obama again this week: He accuses McCain to be, with 26 years in the Senate, "Guilty" of the current Energy Problem.
Okay - let us examine this a bit further Mr. Obama. ..
If you as usual by now, want to play the blame game again, then you have to look at the last 90 years, Sir.
You have to look at the fundamental flaw of the US Energy Policy or the lack thereof. That means that in effect all Congresses, all Presidents and every politician since the roaring 20s are to be blamed. Democrats and Republicans alike.

The current Energy problem is based upon a fundamental design flaw of the US society. We are a nation of Highways, Truck Transportation and car drivers, while public transportation systems were neglected or suppressed by the powerful automotive industry. In part understandable, as this comparably young country went naturally the way of the least resistance in comparison to historically grown train and subway systems, such as in Europe.

Heck our entire explosive economy was (and had to be (WWII) based upon easy available energy sources, whereas Europe early on was forced to examine alternative sources, due to lack or resources within their territory.

Having said that, it is easy and cheap to condemn the US, as the Europeans too were forced to take a specific route - the environment not foremost in mind at the time, but sheer economic survival.

The point I am trying to make is, that our current state of the affairs in terms of energy is a result of logic, history and admittedly also a lack of foresight across all political parties and administrations.

Mr. Obama, if you want to play the guilt card all the way, then you have to walk the walk and blame the American People as well. But that would not be a smart election strategy, right, and cost you votes?
And while you have the audacity to blame, where is your own (even short) track record in state and federal government to that matter?

How about walking the walk and do what you preach?



While McCain legislated and served - you lectured and fund-raised, quite actually delivered absolutely nothing of note. So according to you - all of a sudden the ones who did absolutely nothing in any area, are to be applauded? Are we now to believe a lazy, calculating Macchiavelli, who got nothing done in his political career, just because he opens his big mouth - or someone who time and again delivered?
It is so easy and cheap now to jump on the bandwagon of climate change, global warming, energy conservation and the exploring of alternative sources.
It is much harder to do the right thingt, when nobody cares. Where is your track record to that, Senator Obama?

While you are applauding and honoring the legacy of Great Democratic Presidents and Politicians, have you completely lost your sense for history and forgotten, that none of them saw this crisis coming?
So , while John McCain once again demonstrates humility and integrity by accepting and acknowledging the lack of foresight in this regard - even his own - you come along with your halo and blame everybody, but yourself, even though you too are part of the political establishment, Sir.
How about showing a bit of integrity to acknowledge that fact and how about a bit of wisdom now, delivering a comprehensive and feasible plan to actually solve the problem, instead of going negative again and issuing blame?



Some Cold Hard Energy Facts
The Reader Should Contemplate:


The US sits on huge Oil reserves, some of which can be available within 18 months (Off-shore Oil)
According to the latest scientific data, The US has the single largest deposits of shale oil in the world (already discovered)
This seconodary oil exploration could free up more than 70 years of oil at the current consumption rate !!!!



(Any drilling or secondary oil exploration is opposed by Obama, supported by McCain)
Just the outlook of foreseeable additional supply would have an even faster impact on prices, as futures speculations would drive the price down.
Aren't the Dems exactly the ones blaming speculation for artificially raising of gasoline prices? Quite hypocritical to conveniently "forgetting" that mechanism, when we discuss drilling....

France has proven with 70% of its energy supplied by Nuclear power, that it can be done, incident free, safe and environmentally conscient. Should take less than 10 years to build sufficient amounts of reactors, freeing additional oil for transportation by replacing oil based technologies by electricity.
(Opposed by Obama - supported by McCain)

The Southern States could be self-sufficient with a broad based roll out of Solar and Wind Technology.(Supported by both)

Bio-Fuel technolgy as practised in the USA is wrong, as it drives food prices up (Sorry Ohio). Brazil (40%, via sugar cane) is the right approach or the processing of genetically manipulated grasses with a much higher efficiency (Amount of processed material versus amount of gained biofuel)
Hence the domestic Biofuel approach with huge subventions to the producers is opposed by Mccain and supported without distinction by Obama. (However, if done right, supported by McCain)

Hydrogen technology - supported by both

Conservation, higher environmental standards - supported by both

Additional Taxing of Oil, Coal and Nuclear (after all our primary Energy providers), hence in brutal consequence higher prices for the latter
Supported by Obama - Opposed by McCain

Tire inflation and servicing of cars - Suggested by Obama, already known by the American people and McCain.

Voting on Drilling in Congress -
Opposed by Obama, Nancy Pelosi and enough Democrats to shut down Congress and take a vacation, most Americans can not afford to take.
Supported by McCain and the Republicans,
who appeal to the President to call Congress back and do, what they are eledcted for - work for us and get something done! Now!

In Conclusion -
Obama has only theoretical, longterm plans plus the patronizing naivety to suggest that inflating tires will result in as much conservation, as we would gain by additional drilling..... ???

Mccain proposes an all-of-the=above compehensive Strategy with immediate impact.
Short term: Expanded Drilling and massive investments in alternative Sources
Mid-Term: Expansion of Nuclear Power, as proven feasible by France, will kick in.
Longterm: Investment in alternative sources will kick in with roll out of wind, solar, gas, clean coal, hydro and other.

His plan is comprehensive, immediately feasible and does not throw the people under the bus, since, while he massively invests in alternative sources, he secures our immediate energy needs. The main difference between Obama's and McCain's Plan is, thet while they agree on the longterm, Obama completely neglects all immediate needs. In other words, we will pay10$ a gallon for a long time, before we will find relief. McCain has a plan which will help us soon, while acccomplishing the very same overhaul during the very same time frame.

His strategy reduces the chance for military conflict or political blackmail, as we become independent from the middle east sooner.

Mccain's strategy does not only help us immediately with regard to energy cost, it strengthens our National Security, creates immediately jobs, hence has a huge impact on the economy.

McCain's Plan further reduces our need for involvement in a chronically unstable region.

McCain's Plan reduces our trade defizit vs. Saudi Arabia and the likes massively, whereas Obama's strategy will result in huge debth increases.

McCain's Plan improves our geostrategic position fast in terms of foreign policy, as we may become able to use the oil lever to help allied countries become less likely to be blackmailed by middle eastern despots.

On every level, from any perspective, on every dimension the McCain Plan is sound and far superior to the cloudy lonogterm plan, Obama is presenting.
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New CO2 Enhanced Oil Recovery Technology Could Greatly Boost U.S. Oil Supplies
Reports See Another 89-430 Billion Barrels of Oil Through Carbon Dioxide Injection, Other Advances
U.S. DoE
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Enhanced Oil Recovery/CO2 Injection
U.S D.o.E
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Reports See Another 89-430 Billion Barrels of Oil Through Carbon Dioxide Injection, Other Advances
U.S.DoE

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Factcheck.Org
Straining a Point
July 16, 2008
Updated: July 17, 2008
An Obama ad says he'll "fast track alternatives" to imported oil. Actually, his plan is a 10-year proposal with no guarantees.
Summary
Obama released a national ad saying he would "fast-track alternatives" to imported oil. On closer examination, his proposal is to spend $150 billion over the coming decade on energy research. Ten years doesn't sound all that "fast" to us, and there's no guarantee that the research will result in less oil being imported.
Analysis
Fast TrackAs an example of Obama's supposed grasp of 21st-century security threats, the ad says he will "fast-track alternatives so we stop spending billions on oil from hostile nations." Pictured on screen are images of whirling windmills generating electricity, a solar array against a blue sky, and a couple of white-coated lab workers, one of them peering into a microscope.The campaign says the ad is referring to Obama's long-standing proposal to spend $150 billion over 10 years for research into alternative energy – "to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in hybrids, promote development of commercial-scale renewable energy, invest in low-emissions coal plants, and begin the transition to a new digital electricity grid."Spending that money may well be a good idea, but it's not our place to judge. We do object to implying that a decade-long program, which in all probability could not even begin until sometime in late 2009, is a "fast track" to anything. We also point out that even over the long term there can be no guarantee that just spending more for research will produce the sort of new fuels, vehicles or other breakthroughs that would actually reverse the growth of oil imports. Keep in mind that the U.S. imported the equivalent of 13.4 million barrels of oil per day last year, up nearly 17 percent from just five years earlier and 32 percent higher than in 1997. This is a huge problem that has been getting worse for a long time. Reversing it will not be "fast" or painless.
. We are saying Obama’s ad gives the false impression that his decade-long program is a "fast track" that would allow the U.S. to "stop spending billions on oil from hostile nations."
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Found on Orbat.com
How Much Oil Does The US Really Have?

No sooner than we came up with the outline of a $1-2 trillion crash program to eliminate US dependence on volatile-region oil plus create an export capacity (see below) using every measure we could think of, than we come across two articles 2 US Department of Energy articles that suggest the US has 1.124 trillion barrels of conventional oil left.

Well, since the official figure you will see for US reserves is 21-billion barrels - just 3-years total consumption, you will be justified in asking what controlled substances has DOE been ingesting and why are we worrying about oil when we should be worrying about why DOE has not made this wonderful stuff available to everyone.

The mystery is resolved once readers recall we had run a piece some months back which said only one-third of available known oil had been recovered in the world. Let's back off a minute to go over the matter in admittedly simple terms.
Primary recovery of oil is when the pressure inside an oil field suffices on its own to push oil out through drilled holes. This is the easy, cheap oil, and yes, the US is just about out of it. Primary recovery gets 10-20% of the oil out.
Secondary recovery comes when you have to inject pressure into an oil field to force oil out. This can be done with water or with CO2. US has been using secondary recovery to get up the percentage of oil recovered to 20-40%. We knew about this technology as surely did most of our readers, its no secret. But whenever we did read about it, it was all "Waaaaaah! It's so expensive! Weep, moan, whine".
What was not known to us - we do have to earn a living and then there's Orbat.com to run, so it's not like we can spend 12 hours a day researching - is that the technology has now advanced to the point that once large quantities of CO2 are available, DOE figures US can comfortably recover 83-billion barrels more.
Now, our program calls for a reduction in use by 5-million of 20-million barrels a day, eliminating volatile region imports, and production from shale and coal of another 5-million barrels, which the US would export while blockading enemy oil. So, for example, if you didn't want the world to suffer when you blockade Iranian oil - a move that will destroy Iran in short order - you would put 2-million barrels a day on the market to make up for the shortfall.
But if all that's needed is CO2, we don't have to go the shale/coal route. That 5-million bbl/day could come from US fields for 50 years. And the nice thing about CO2? You've guessed it - you sequester it from existing coal plants. It can be shipped via pipeline - one project in the works has CO2 being shipped over a 300-km pipeline for use in injecting oil fields. So everyone should be ecstatically happy, including the greens.
You would still need programs that shift our energy from dirty to clean - nuclear, solar, wind etc etc because you still want to run vehicles on fuel cells and not on gasoline, for environmental reasons.
But we're talking about 83-billion barrels, where did the 1.124 trillion come from? Well, developing technologies that exist today can push up secondary recovery to 430-billion barrels. Next, geologists have found that under the secondary layer is yet another layer - we don't know if we are into tertiary recovery yet, perhaps readers can look at the articles closer than we did. But this additional layer is achievable with technologies we can conceive of, but still need to develop. That's how we get to 1-trillion plus barrels.
Yes, the stuff is expensive. And yes, the pure economics of oil say that oil companies will want to develop where they get the most money, so let's be off to distant parts of the world and worry about the strategic dependency later. Economic theory will also tell you when companies are making huge profits doing business as usual, they have no incentive to shift to new technologies.
The problem with all this is that as Orbat.com has repeatedly said, we are not paying $70/barrel for our oil. When you add in the cost of securing that oil - for example, obviously we wouldn't be in Iraq if it did not have oil aplenty and even there they've only scratched the surface because without oil Iraq would not be a strategic interest - we are paying way over $100/barrel. We did this exercise some years ago, we'll do it again soon.
You cannot in any case rely on market mechanisms when you are dealing with something so fundamental as energy procured from volatile regions. If for some reason the flow of Chinese toys to the US is disrupted, that is not a problem. But if the flow of oil is interrupted, we have a big problem. Energy independence, and indeed, the ability to export energy in support of US foreign policy, is a strategic national security issue. It requires top priority - right now.
The government will have to spend money to encourage conservation, demand reduction, and technologies for recovering secondary/tertiary oil because it's spending that and likely more anyway on defense of overseas production areas and the sea lanes.
So if companies say: "well, secondary CO2 recovery makes no sense for us because oil will come in at $80 barrel", then the government has to say "fine, we'll make up that $10" because right now the people, via the government, are paying more than that $10 AND there is no assurance overseas supply wont get disrupted. How much better to subsidize production of US oil than to subsidize Iran and Saudi Arabia.
The two articles can be found at
http://www.fossil.energy.gov/programs/oilgas/eor/index.html and http://www.fossil.energy.gov/news/techlines/2006/06015-Oil_Recovery_Assessments_Released.html

The absolute best way for the US to destroy Iran...
...and other enemies like Saudi Arabia is to launch a crash program to substantially reduce oil consumption and to produce oil by other means such as shale and coal-to-oil. US should be installing enough capacity that it exports oil.
Oh yes, we are quite aware of the environmental issues. But freeze that thought for a minute.
Think of a crash program utilizing ALL technologies: more US drilling, coal-to-oil, shale oil, tar sands, N-power, vastly expanded solar/wind, cut transport use by increasing mileage standards/raising taxes. double mileage standards/cut demand by raising taxes.
Let's use round figures. US imports about 13-million bbl/day of crude/products. Lets say US needs to replace 5-million bbl/day that comes from unstable areas and it needs to export 5-million bbl/day to supply the world with oil when it blocks oil exports from countries that need smacking.
Okay, increasing mileage standards/decreasing use can cut 5-million bbl/day. Goodbye imports from volatile areas. Produce 5-million bbl/day with the combination of above technologies. That will be needed when you smack - say - Iran. WE blockade its ports and supply the world with the lost 2 million bbl/day or whatever. Let's arbitrarily assume the US government will need to subsidize this shift to the tune of $200-billion for 20 years. Throw $200-billion more into a mass expansion of N-power - that's the government contribution, the world is awash with liquidity, money for capital costs is not a problem. Why N-power? Because you need to start shutting down coal generation plants both for environmental reasons and to reduce the pressure on coal prices.
Next - back to the greens, and aside from Mr. Dick Cheney we are all greens at some level. Simple politics, and simple good stewardship of the earth says that if you are going to get the greens to agree even on national security grounds, they have to get something in return. So throw $200-billion over 20 years into each of the following: environmental cleanup of the damage caused by the coal-to-oil etc.; $200-billion into subsidies for clean new technologies - solar, wind, whatever; and $200-billion as subsides for mass transit. You are then spending $4 dollars to keep greens happy plus money to shift the existing base from coal to nuclear for every $1 for oil produced by other means.
Forget about Iraq for the moment, assume the regular defense/foreign aid/intelligence budget can be cut by $50 billion/year - say less than 10% of existing spending because we wont have to give a hang about the Middle East. You've paid off that trillion in 20 years. And in 20 years, with new technologies and a vast expansion of existing technologies like wind and solar producing results, you can start shutting down the extra coal and start drawing down on existing coal, which is used mainly for power plants.
You don't want to cut the defense budget? You don't like our figures and you want to - say - spend more on clean-up and subsides for solar/wind etc so less is needed for N-power etc? Okay, would you be happy with an additional $50-billion a year? That's $100-billion/year - what we spend on Iraq without a squeak. It means 0.8% of the current GNP - a lot less of the 2027 GNP. That money won't break any bank - and it will generate millions of good jobs for the US.
It would be nice to build a consensus on this, and if it is presented as a national security issue, and environmentalists are given iron-clad assurances that money will be spent on things they value - reduced consumption, clean-up, new clean technologies - and that the dirty stuff is temporary, they should find it palatable.
After all, no one wants to be held hostage to foreigners who hate America and use our money to try and destroy us. Environmentalists are patriots too.
But if consensus cannot be quickly built - well, the President keeps telling us we are at war, doesn't he? Time to put his money where his mouth is. In war you enact wartime measures.

2 comments:

Anonymous said...

«The absolute best way for the US to destroy Iran...»

Is that your statement Michel ? – would not debate on that basis of a "Derangement Syndrome", pls see my posting on «OBAMA PRESIDENT ELECT ?» on your blog and the August 29 comment 11:27pm on the NZZ online site, a reflection on WHY its Iran, entitled «Iranian International Petroleum Exchange».

c.s.

Weisz (Michel C. Zala) said...

NO NO NO

This is not about destroying IRAN.
It is about recognizing the enormous danger the Iranian Regime poses to the region.

We believe that Israel rather sooner than later will be forced by sheer darwinistic instinct of survival to a preventive attack on Iran, possibly even by nuclear means, as those installations are buried and decentralized in over 40locations. IRAN does not recognize the right of existence of Israel and it clearly stated that Israel must be wiped off the map. Israel has no capability for reciprocity, since it lacks a fleet of submarines and is a midget in terms of geography. It is why we deem the potential for a nuclear attack so evident.
It would be devastating to the entire West, hence Iran must be by all means deterred to even think about developing a nuclear arsenal. it is why RU should not be allowed to deliver rocket technology to the Iranians.

What can be done to prevent such a danger is beautifully outlined in Krauthammars Articles "Non Prolifereation has failed". Possibly we will need a holocaust declaration issued by the US Government.

The End, Folks

Photobucket Fluff Zala, Foreign Policy Desk ....................................................... Even though my Candidate is stereotyped quite heavily, the video below is hilarious. It should remind us all, not to lose our humor and buy into predictions of doom, but have faith in The American People to do what's right. America is powerful and strong, and , so God will, we will remain a beacon of hope and freedom not just to our own melting pot, but to the rest of the world. God bless you, Dear Reader, for doing the work and taking the time to study the provided material, then go and vote with a clear conscience of having made an informed decision.
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Most of all: God Bless America