Chevron Corp. and its partners, Devon Energy and Statoil, have discovered a vast petroleum pool 175 miles off the Louisiana coast in the Gulf of Mexico.
The Chevron pool could hold 3 billion to 15 billion barrels of oil and other natural gas liquids.
How much is that? Saudi Arabia has over 250 billion barrels of oil in reserve. So if we find 9 billion barrels (taking the average of the estimates) in that new Chevron field, we’d have to find 27 more oil fields the same size to equal the Saudi reserves.
Power of 1% or 2%. It’s still a major find. Nine billion barrels might not seem much, compared to the 5.7 billion barrels of oil the United States uses each year. Theoretically, we could burn it all in two years.
But we would not consume it all at once. That’s not how oil distribution or consumption works. And as we’ve seen over the last two years, a tightening or expanding of world oil supplies by just 1 or 2 percent can raise or reduce the price of gasoline by 30 to 50 percent.
If that Chevron oil pool can be used to add even 1 percent to America’s annual oil supply, it could make a major dent in gas prices for a long time.
30% more U.S. oil. One percent of the 5.7 billion barrels we use each year equals 57 million barrels. If the Chevron pool has 9 billion barrels, it can supply 1 percent of U.S. supplies for 158 years, starting in 2010.
This is big. The Gulf of Mexico discovery increases U.S. oil reserves more the 30 percent, from the former 29 billion barrels to around 38 billion barrels.
Chevron (of Calif.) owns a 50 percent interest in the oil well, called “Jack 2.” The other two companies, Devon (of Okla.) and Statoil (of Norway), own 25 percent each. Their well had to reach down through more than 1 mile of Gulf water, and then it drilled through 4 miles of rock below the sea bed.
Other untapped oil? Some oil experts already are saying this huge discovery will encourage more drilling in the Gulf of Mexico, and possibly new exploration in the Atlantic and Pacific. Keep in mind, 27 more “Jack 2’s” would give us Saudi-sized reserves.
Unfortunately, the Arctic National Wildlife Refuge in Alaska won’t help. The small portion of ANWR proposed for drilling has an estimated 7.7 billion barrels of oil. Nevertheless, Congress refuses to appove ANWR drilling.
The Chevron pool and ANWR could hold much more oil than the geologists estimate today. In 1977, most experts suggested that Alaska’s Prudhoe Bay had 9 billion barrels of oil. But since then, Prudhoe Bay has produced 12.8 billion barrels, and it continues to pump 1 million barrels a day.
Gradual withdrawal. ANWR and the Chevron pool together could provide 2 percent of U.S. oil (at the current consumption rate) for 146 years. That 2 percent oil supply, combined with other likely oil discoveries, would play a major role in holding down prices.
Of course, I’m assuming we also would suppress oil demand by reasonably increasing conservation with more fuel-efficient cars, and by adding a reasonable number of non-oil-burning power plants to generate electricity. And no, I don’t expect ANWR to open up any time soon.
But the Chevron field changes things. We oil addicts will not have to quit cold turkey. This is good news. This is big.
More on the Chevron find:
An end to the end of oil? The Foreign Policy blog:
[I]f this oil discovery turns out to fulfill its promise, it could have a large impact on oil prices, which tumbled by $1.10 today to close at $67.50. Last month, FP reported on the shrinking oil reserves around the world. It sure would be nice to add an oil field to the list that is actually growing in production, instead of falling off.
New oil discovery bad for oil addiction? The Environmental Economics blog.
So now what happens? If this discovery pans out--early projections are it could increase domestic production by 50%--the incentive for investment in alternative fuel technologies is diminished, or at least delayed and my SUV investment doesn't look quite as bad.
Coming oil glut. The Stock blog.
At $10 a barrel it wasn’t worth searching seven miles down. At $70, apparently it is. How much more deep oil is out there that no company has ever bothered to try and find at previous prices. The fact that a company can find so much so close to hundreds of existing rigs suggests that there’s a heck of a lot of undiscovered oil out there and the real barrier to discovery is profit.
Oil bulls are saying, “Yeah, but it’ll be 2010 before they get this up out of there.” But, remember that when front month oil futures were soaring one of the many completely illogical reasons given for the rise was that we were supposedly going to be short on oil a few years from now.
Peak oil theorists don’t know Jack. The Peak Oil News blog.
Whatever the ultimate size of Jack, its true importance lies in when it was discovered — earlier this decade, rather than in the 1960s or 1970s, said Mr. [Michael] Lynch, president of Strategic Energy and Economic Research Inc. It is proof positive that higher commodity prices and improvements in exploration technology can result in major new discoveries, he said.
That is the case at Chevron's Jack well in the Gulf of Mexico, nearly 300 kilometres from the U.S. coast. Massive caps and peaks of prehistoric salt had defeated earlier exploration efforts, chewing up the sound waves that the industry uses to create seismic pictures of reservoirs.
Huge oil discovery in Gulf of Mexico. Daily Kos blog comments.
1. Not the most potentially stable source of oil. Look what happened to many rigs in the Gulf during Katrina. Nechiaev.
2. oh boy, oh boy, to hell with the atmosphere or global warming, rev up those engines and lets go... PBMUS