Here we are going to look at the best available figures for offshore drilling, specifically the areas that are currently off-limits. That's what the current political fight is about.
First, how much oil we consume and how much we "produce":
The bottom line is that we consume a heck-of-a-lot more oil than we prodce, about three times as much.
And how much more could we get "offshore" from areas that are currently off-limits?
Well if you comb all the literature out there, the simple answer is that we don't really know. Here's the closest that I've been able to get from an article in Scientific American:
The Minerals Management Service (MMS), part of the U.S. Department of the Interior responsible for leasing tracts to oil and gas companies and collecting the royalties on them ... has estimated that there are around 18 billion barrels in the underwater areas now off-limits to drilling. That's significantly less than in oil fields open for business in the Gulf of Mexico, coastal Alaska and off the coast of southern California, where there are 10.1 billion barrels of known oil reserves as well as an estimated 85.9 billion more.
So the whole fight is for 18 billion barrels (as far as we know). To place this figure into context, the current estimated reserves for the US (excluding all offshore) is about 22 billion barrels. Add 96 billion barrels from the current offshore drilling areas (total now up to 118 billion barrels) and those 18 billion barrels don't seem like so much. Let's look at the world's oil reserves and consumption rates and compare all these numbers:
*Decade numbers = Per Year figures x 10
Note that by 2030, oil consumption is estimated to go way up due in large part to China and India. You'll also notice that the amount of oil in these offshore off-limit areas are likely to be negligible in the long run. Fully exploring the areas that we currently drill will likely produce far more oil. Opening the off-limit areas will not affect the world supply and will certainly have little effect on the price of gas. But it will line the pockets of anyone who can drill. Remember the price of gas is largely dictated by world supply and world demand - the notion that the US is an insulated market is hogwash. So why would John McCain and the GOP support such a measure?
Sources: Energy Supply page on the Global Education Project, The Energy Information Administration, The Minerals Management Service, The CIA Factbook.
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> Opening the off-limit areas will not affect the world supply
> and will certainly have little effect on the price of gas.
Couldn't you make the same argument about every country on that chart that is the same size or less than "off-limit offshore?"
"[China/Quatar/Brazil/Algeria/Norway/Oman] producing oil will not affect the world supply and will certainly have little effect on the price of gas."
That implies that if you aren't one of the biggest producers on the chart, you shouldn't do any production of your own oil, because you can't effect the global market, and therefore cannot effect the price of gas.
Well, if your only goal is to affect the global market, then no, there's no point in producing your own. The reason it's worth doing is because the oil is produced locally, and thus counts as economic output from the country.
In our case, we're talking about adding another 15% to our total cumulative production (and thus economic output) from here forward. We're not choosing between drilling the new areas and not producing at all. So it makes sense to weigh the tradeoff between an additional 15% and the almost certain additional ecological damage that will occur at some point during the extraction of that additional oil.
And arguing for drilling on the basis that it will change the price at the pump is just plain loony.
How much could the off-limits offshore areas produce per day? If the production ratio is the same as the reserves ratio (18-to-118), then we're looking at an extra 1.1 million barrels per day, or only 5.6% of our daily consumption, yes? So if that were refined and distributed solely within the U.S., at going rates, how much would that actually reduce pump prices?
John Gardner,
If the common sense of Johnny Vector didn't reach you, let me put it to you this way. Don't get confused. The US government doesn't drill. These off-shore reserves are not for the American public. Oil producers drill, and the product adds to the global market, competition between oil producers (i.e. Exxon, Shell, BP, etc.) for oil consumers (i.e. American car drivers, Chinese car drivers, trucking companies, FedEx, Greyhound, etc.) is what determines prices.
Don't forget that oil producers don't drill to lower prices, they drill to make a profit. So sure, if you were an Oil producer you would want to drill more so that you have more oil to sell on the global market. There's nothing wrong with that. But to lower the cost of oil you would need to change the balance between global oil production versus global oil consumption. Supply vs demand. Economics 1.0.
Will drilling off-shore in areas that are currently off-limit (or even in ANWR) realistically change that balance?
The data is clear. Not by much.
How much could the off-limits offshore areas produce per day?Don't forget that oil producers don't drill to lower prices, they drill to make a profit. So sure, if you were an Oil producer you would want to drill more so that you have more oil to sell on the global market