GEOL 115: The Earth’s Energy Resources

Every President since Nixon has sought the holy grail of U.S. energy independence.  Some have stated this goal more explicitly than others.  Implicit in this goal is the suggestion that the declining US production trend can be reversed. The Hubbert analysis suggests that it can’t, at least for conventional petroleum resources. In this lecture we took a qualitative look at whether there are potential large conventional petroleum provinces that remain untapped.

There are a few onshore provinces that we did not examine (MidContinent Rift, ANWR). But outside of these it is unlikely that there will be large discoveries onshore in the US. (By large I mean 500 million barrels or more). Even a 500 million barrel field is insufficient to reverse the decline in US production. Most US oil producing states have production profiles that look something like Oklahoma’s, they seem to be in an irreversible decline.  That’s not to say that production doesn’t exhibit short term increases in response to sharp price spikes.  These increases are small and transient however.

Moreover, there is little interest in petroleum exploration in places like Oklahoma. You can see this by notices of intent to drill in the state or in a more qualitative ways. In the 1950’s every major oil company had a large exploration office in the state of Oklahoma; now relatively few do. There are a large number of oil companies in Oklahoma but they are smaller, have lower reserves, and more restricted operations. Oklahoma has gone from being a vigorous center of the oil industry to being something less than that.

We looked at offshore areas. Its important to note that before the Santa Barbara Channel oil spill there was little resistance to petroleum exploration anywhere. The oil industry was able to nominate interesting areas for lease, the federal goverment held lease sales, and drilling proceeded with little objection.  A number of the areas off California would generate interest if offered for lease today. But the interest would still be tempered by the industry’s experience with the Pt Arguello field (a large field that didn’t produce as hoped).  Petrobras is developing techniques for the retrieval of heavy oil from offshore reservoirs.  The success of those efforts may be critical to future efforts off the central and northern California coast.

The colors on this map actually tell the story.  The basins in light blue and green are part of prolific petroleum systems and are actively developed.  The basins in pink may lack sufficient overburden to cause the source rock to mature and may lack good reservoirs.  The basins in purple contain good source rock that has probably not been buried sufficiently to generate oil.  The basins in brown contain substantial amounts of heavy oil; probably on the order of a few billion barrels.  The basins in yellow lack good source rock.

Most of offshore Alaska lacks good oil-generating source rock.  The exceptions here are the Chukchi and Beaufort areas.  These latter areas are being actively explored.  We know that good source rocks are present in the National Petroleum Reserve-Alaska.  Are there “game-changers” up there?  Probably not.  We would need to find something comparable to Ghawar to really change the long-term conventional petroleum supply picture.

There has already been considerable drilling activity on the east coast of the US.  Again source rocks seem to be the problem there.

The bright spot is the deepwater Gulf of Mexico.  Here a large petroleum province may have been discovered that will be about the size of production to date from the Gulf of Mexico OCS.  It will be interesting to see how the production from this province measures up over time.

It looks like Hubbert was about right on the U.S.  Finding additional large provinces will require some new ways of thinking and finding more supplies of hydrocarbons will require utilizing unconventional resources.

Corporations are right to seek the right to explore domestically; in fact they have a fiduciary responsibility to do so. It is probable that there are a number of giant oil fields that could be discovered. Such discoveries would be very important to an individual corporation. A 500 million bbl or 1 billion bbl discovery won’t change the overall energy picture for the USA however.