Deep Ocean Energy Resources -- A Critical Analysis

On June 29th, the House of Representatives passed the Deep Ocean Energy Resources (DOER) act. This bill may be taken up by the Senate soon. The legislation is now in the news and the mudslinging has begun. Conservative organizations and media like the Washington Times are pushing the main agenda, which is to open up areas of the US Outer Continental Shelf (OCS) to oil & natural gas E&P (exploration and production).
Over the latest four quarters for which financial data are available, ExxonMobil has spent a greater proportion of its record profits ($36.7 billion) and cash flow repurchasing its common stock ($20.5 billion) than investing capital in oil and gas exploration ($19.1 billion). If Congress is disturbed by this juxtaposition, it ought to do something about it. In fact, Congress has the power to establish an investment climate in which ExxonMobil would be far more likely to use a much larger share of its cash flow drilling for oil and gas than spending the money boosting its stock price...

The potentially liberated OCS area, where federal rules have banned drilling, is believed to contain 19 billion barrels of oil and 86 trillion cubic feet of natural gas. Given that current U.S. proved reserves total 22 billion barrels of oil and about 190 trillion cubic feet of natural gas, the OCS oil and gas reserves unleashed by the House last month represent a huge step in the right direction. With the support of 40 Democrats, the Deep Ocean Energy Resources (DOER) Act passed the House by a 232-187 vote....

Under DOER, drilling would still be banned for the first 50 miles off the coast. However, with the approval of a state's governor and legislature, a state could repeal that ban by petitioning the federal Department of Interior to authorize drilling within that 50-mile limit. Unless a state petitioned Interior to maintain the moratorium beyond 50 miles, DOER would permit drilling in waters 50 to 100 miles offshore. To induce states to permit expanded drilling, DOER offers them a larger share of the royalties. In a concession to Florida, DOER bans drilling within 100 miles of the state's west coast....

Here, we'll take a realistic view of what's going on and investigate the question of whether opening up the OCS to drilling will save us.
DOER is controversial because of environmental concerns and tourism dollars. Even California's Governator opposes it while advocating conservation as the necessary first step to meeting our energy requirements. Others on the right claim that DOER will help us meet our energy needs and create jobs. But all this begs the question. This is TOD, so we want to know what's at stake regarding energy. You may have noticed the magic numbers bolded in the Washington Times editorial text -- 19 billion barrels of oil and 86 trillion cubic feet of natural gas. Where do these estimates come from? Most sources you see will quote these numbers.

As far as I know, the sole information source for DOER is Comprehensive Inventory of U.S. OCS Oil and Natural Gas Resources, a report to Congress from the Minerals Management Service (MMS) Offshore Minerals Management Program. [Warning: this is a 134 page PDF file. Don't try this at home.] MMS is part of the Department of the Interior. Let's get the big picture in two figures from the document.

Figure 1 -- Click to Enlarge

Figure 2 -- Click to Enlarge

Figure 1 gives us the geography of the OCS regions under consideration for E&P. Figure 2 shows the known and undiscovered resources (mean estimate) of the OCS regions. But what does "mean estimate" actually mean? Look at all those zeros in the known resources part of the table. Also, note those enormous numbers in the "undiscovered" category. And where are the magic numbers cited above? It is easy to see how this table could be used to fuel all sorts of wild speculation.

In order to answer these questions, we must understand something about MMS's reserve accounting practices. The publicly quoted numbers appear on page xii of the introduction.

The MMS estimates that conventional oil and gas resources (i.e., UTRR) in OCS areas currently off limits to leasing and development total 19.1 Bbo and 83.9 Tcfg (mean estimates). There remains today, considerable uncertainty concerning the resource potential of many of these OCS areas. The availability of additional modern G&G [geological & geophysical] data could reduce this uncertainty. It is instructive to note that perceptions concerning the resource potential of the Central, Western and portions of the Eastern GOM, areas experiencing robust levels of exploration and production effort, have continued to evolve for the better over the years. Critical to the changing perception is the fact that the MMS has acquired approximately 1.75 million line-miles of two-dimensional (2-D) common depth point (CDP) seismic data and nearly 300,000 square miles of 3-D seismic data. However, the additional G&G data and information that become available to assessors between assessments is frequently mixed in terms of having a positive or negative effect on the perception of the overall hydrocarbon potential of the OCS.
OK, MMS has some CDP and 3-D seismic data. But what does UTRR mean? We shall get to the "mean estimate" shortly. Unfortunately, I can't quote a 134 page document at too much length. But here's the UTRR.
Undiscovered technically recoverable resources

Hydrocarbons that may be produced as a consequence of natural pressure, artificial lift, pressure maintenance (gas or water injection), or other secondary recovery methods, but without any consideration of economic viability. The UTRR do not include quantities of hydrocarbon resources that could be recovered by enhanced recovery techniques, gas in geopressured brines, natural gas hydrates, or oil and gas that may be present in insufficient quantities or quality (low permeability “tight” reservoirs) to be produced via conventional recovery techniques. Also, the UTRR are primarily located outside of known fields.

Just like how many angels one can fit on the head of a pin, the imponderable question here is how hydrocarbons can be both undiscovered and assessed as technically recoverable at the same time -- discounting, of course, considerations of economic viability. As any "hands on" insider in the oil & natural gas business will tell you, the only way to convert a resource from undiscovered to a proved reserve in this case is to get in a boat, load it with some equipment, go at least 100 miles off some OCS region, drill a test well and see what happens. As if to emphasize my point, this comes on the heels of the discovery that Mexico's huge 10 Gb (billion barrel) discovery in the Gulf turned out to be a dud once they actually drilled some test wells. Just as politics probably played a role in the Mexican case, it is apparently the same as regards DOER. My apologies for just stating the obvious.

I will finish up by talking about the "mean estimate", the current R/P ratio of the US and the typical time it might take to bring any of these undiscovered resources on-stream. The "mean estimate", along with the "risked estimates" are calculated as follows.

Risked estimates reflect the long term expected outcome from repeated exploration in areas identical to the one being assessed. An MPhc of 0.5 means that 50 percent of the time the basin will be dry and the other 50 percent of the time technically recoverable hydrocarbons will be present. In the 50 percent of the cases when exploration is successful, the volume discovered is represented by the solid curve labeled “conditional.” The assessment shows that there is a 95 percent chance that at least 1.5 Bbo will be found and a 5 percent chance that the amount found will be at least 6.5 Bbo. The average amount is assessed at 3.75 Bbo. The basin, however, is a frontier basin without a discovery, therefore if the basin is dry, the volume of resource expected to be discovered is zero. The resource assessment results reported would reflect this risk of failure. This is shown in the dashed curve labeled “Risked.” Note on this curve there is a 50 percent chance that the volume of resources discovered will be greater than zero. The corresponding F95 and F5 estimates are zero and 5.5 Bbo, respectively. The reported mean estimate is 1.88 Bbo.
And here's MMS's sample illustrative graph.

Figure 3 -- Click to Enlarge

F5? F95? Usually reserves are expressed in terms of probabilities like P5 or P95 and refer to discovered resources.

Reserves are generally classified as proved, probable, or possible; where these, usually, are seen as additive, so the largest amount of reserves judged reasonably likely are the (proved + probable + possible) reserves. Alternatively, one can quote reserves as 95% likely (P95); 50% likely (P50) or 5% likely (P5)....
What does "F" mean? Is this non-standard terminology used because we are talking about some undiscovered "final frontier" hydrocarbon basins like in Star Trek?

In this open thread, I estimated the US R/P ratio at about 7.2 years if production levels remained flat based on proved reserves of 21.4 Gb. For the new readers, always remember to check out our handy Acronyms guide. As an aside that I need to investigate, the British Petroleum 2006 Statistical Review shows the R/P ratio as 11.8 years based on an increased reserves number of 29.3 Gb. Despite this discrepancy, as a follow-up, Khebab added this helpful graph.

Figure 4 -- Click To Enlarge

As you can see in Figure 4, the "energy independence" situation is dire now and future consumption at current levels will make it much, much worse. How long would it take, again discounting financial considerations, to put the MMS undiscovered resources (assuming they are actually there) on-stream? I will also remind you that these projects will require deepwater or even ultra deepwater drilling. Even for "easy" E&P, which is rapidly disappearing all over the world, the ramp-up time is measured in some number of years in the likely range 4 to 8. As ExxonMobil is fond of telling us, the oil & gas business has "long lead times". Recall from the lead-in quote that they are spending more money on buying back their own stock than on E&P. Will the DOER bill change that? The DOER act passed by the House isn't even law yet. Assuming this happens, lease blocks would have to mapped out, auctioned off to oil & natural gas companies, initial testing would have to be done, etc. If a real "play" was discovered, it would then take some number of years to put it in production.

Concerning the mean estimates for the publicly quoted numbers, those 19 billion barrels of oil and 86 trillion cubic feet of natural gas, we note that non-existent reserves -- proved, probable or possible -- are being discussed as inferred from seismic data and extrapolations from the Gulf of Mexico where similar studies have been carried out. Considering the current US R/P ratio, I can only recommend this wisdom: "deal with reality or it will deal with you".

In conclusion, here in the United States we continue to fiddle as Rome burns.

[editor's note, by Prof. Goose] Perhaps if we would change the political discourse with regard to energy...?

[editor's note, by Prof. Goose] Also, please, this OCS thing might actually pass, fark, boing boing, reddit, furl, digg, do whatever you can to get this piece out there, from a green angle, from whatever angle you need. This is imporant.

The OCF oil and gas is interesting, to me at least, because it promises so much, or is nothing but a pisss in the sea, depending on who you listen to.

What can we actually know?  Well, let's take a quick look at some "big picture" thoughts and conclusions:

  1.  If the OCF lived up to it's fullest projected potential, it would have a BIG impact on the U.S. oil/gas situation, for awhile at least, and there is always the possibilities of surprise to the upside, ala a North Sea type find hiding out there, which would re-revolutionize oil/gas economy as the North Sea did in the 1980's (as "Brent North Sea" influence fades, will we see a new bourse, perhaps "A&P (Atlantic Pacific) New York Index.  It is not impossible.

  2.  What is known is very little.  The technology developed since OCS has been explored years ago is nothing less than staggering.  The old numbers are now essentially useless.

  3.  The greatest potential impact is in natural gas, and there is a backside to the sword on this one.  Would you pour billions of dollars, and spend years in court on lawyers to try to establish an LNG (Liquified Natural Gas) facility and contracts, fearing the onslought of OCS natural gas flooding the market?
Opening the OCS risks destroying investment in LNG and pipeline development.  That may be a good thing, or a bad thing, depending on your point of view.

  1.  OCS natural gas creates the potential for a new "dash to gas" if it shows real potential of materializing.  The problem there is that the "dash" could outrun the "gas".    The well respected NPC (National Petroleum Council) "Balanced Options" natural gas report projected a shortfall on natural gas production vs. consumption, EVEN ASSUMING a complete opening of OCS and all moratoria areas by 2006.

  2.  Opening OCS only increases the logistical log jam in the petroleum drilling equipment, and workforce area.  If the gas and oil actually turns out to be there, it could create a boom in oil services/oil and gas equipment area unprecedented in the history of the industry.

  3.  Lastly, is opeing OCS good news or bad?  It can be taken either way.  It indicates that we somehow think we can still avoid frugal use of oil and gas, and that we are showing every sign of wasting the very, very, valuable time the oil and gas cuould buy us.  If it drives prices down, the waste will be unbelievable.  The CERA "happy news" types will use it as justifation of an "all's well" view of the petroleum situation.  On the other hand, the Colin Campbell school  of peakers can smile wryly, and point out that this last blast of "throw it all open, desperation drilling" was predicted as the final phase of the fossil fuel age all the way back to Hubbert and the birth of the Peak Oil Theory.

Take from it what you will.

Roger Conner  known to you as ThatsItImout

The only real answer is to do a far more in depth study but
on the same hand if there are not significant finds then we don't need to worry about the environmental impact.

One thing I can say is that if the US as a wealthy country finds a large reserve it should exploit it. Simply because right now and in the future with high prices its the poor countries that suffer.

I may post about doom and gloom but I'd love to not see peak oil happen. I wish it was in 30 or better 100 years because I'm convinced it will be very bad for mankind.


I am somewhat the flipside.  :-)  I am an optimist by the standards of the peak types, but I do agree with you that a fast surprise "peak" and even more importantly, a fast dowslope post peak could cause great suffering, at least for awhile, until consumption could be readjusted/stabalized.

Your sentence,
"One thing I can say is that if the US as a wealthy country finds a large reserve it should exploit it,"

Creates two questions for me, however.  First, If we take the position that "we should exploit it", should we not really lean hard on policy makers, technicians, peak aware folks, etc., to answer, "yes, but what else should we be doing while we 'exploit it'.  The most catastrophic outcome would be a repeat of the 1980's, in which new reserves were found, exploited, and only served to drive the price through the floor and create an orgy of waste, and at the same time kill off all interest in alternatives for a quarter of a century!  Think of that for a moment, almost a quarter of a century completely wasted, and the "new large reserves" destroyed!  And with no alternatives developed for the end of that road!

Second, we have to decide whether we take CO2/greenhouse gas/global warming seriously.  The waste of "new large reserves" would of course push up CO2 emissions by leaps and bounds.  In the recent Rolling Stone Magazine interview he did, Al Gore essentially phrased the argument in such a way that Peak Oil was a secondary and side crisis compared to Global Warming.

If we accept that logic, new large reserves would only speed the more dangerous of th two catastrophic outcomes, massive global warming.

Do we?  This is the problem in trying to "convince" the masses about Peak Oil.

What it sounds like to the public is convoluted logic:
 "There are no solutions, and even if there are, you can't use them.  We are are running out of oil, which is catastrophic, but if w're not running out, that is even more catastrophic."  "The fossil fuel age is over, and if it's not, we're in even greater trouble."  

The whole thing keeps running in a logical circle, until it runs the risk of devouring itself by it's own tail.

Roger Conner  known to you as ThatsItImout

My point is there is no doubt that two things are going to happen for sure.

1.) The world will drive there cars until you pry the keys out of there cold dead fingers.
Our government will not mobilize until maybe sometime after a new administration comes in (2-4) years.
They will react badly at first 1-2 years.
There will be tremendous pressure for CTL/GTL/Oil Shell/Shelf exploitation anyway.

2.) The third world will bear the brunt of the first years of post peak oil.

So by bringing new oil onstream to lessen the slope of depletion even though we won't really do else were helping the poorer countries do power down more gracefully.

I think its way to late to engage in trying to educate the American public since the turnaround time is measured in years if not decades.

Lets take sulfur emissions how long did it take the get those under control ? Almost 20 years.
Global Warming  Few Kyoto signers actually controlled their emissions the US Hah.

I'm not saying not to keep pounding forward educating the public but I'm a lot more comfortable if we begin to exploit every oil source possible now then later since were going to do it anyway and if we wait much longer were simply damaging the environment with little effect on the peak.
Aggressively going after non-conventional oil now could significantly reduce the initial effects of peak oil buying time for a decent power down. Waiting till significant declines have happened and "demand destruction" i.e. the third world has gotten screwed simply destroys the environment for no reason.

I truley believe that the world will face significant decline rates soon 8%+ mainly from the depletion profiles caused by advanced extraction methods. It the rate of depletion that is the killer not depletion itself.
We cannot handle a 8% decline rate 1-2% will be very tough worldwide.

Now this is were transparency from OPEC is critical if we are really facing 8% decline rates then OPEC is killing more people then hitler or stalin could ever think to kill.

If I'm right I think the future will show the lack of transparency on the part of OPEC was the biggest crime commited in the 20th century.

On the contrary, I think first-world countries such as the U.S. and the rest of the G7 will suffer more than third-world countries. This is because poorer countries use much less oil per capita so they won't experience as great a drop in way of life {Less cars = less dependency on oil}. This is especially true for the poorer African countries which use so little oil that to cut off their entire supply would have a marginal effect on the people and gov't. Many countries still use primitive animal-driven plows rather than tractors.

I don't understand your last comment. How can OPEC's lack of transparency be a crime? They have no obligation to provide the world with cheap oil. If they lie about their reserves, so what? It's their oil, they can do what they want with it. The real crime is the plunder of their resources by the Europeans and the US until their oil was nationalized in the 60's & 70's.

It is the rest of the oil-consuming world's responsibility to develop sustainable lifestyles. Alas, at this point it seems inevitable that the US may well experience the greatest decline of a world superpower in the history of the world as peak oil arrives. Placing the blame for this on anyone but ourselves is arrogant and short-sighted.

I think your mixing low consumption in the African countries with critical consumption. Its the diesel that powers the clean water well or gets perishable goods to market on time or powers the ambulance. They certianly don't wast oil which means what they do use is critical.


The point is the have the highest engergy cost per GDP thus
every increase removes some fairly critical usage.

Sure they use a lot of wood but not in a sustainable way.

Next I don't separate Oil producers from consumers since there in this game together. I assure you if depletion is quick the oil producers will bear the brunt of the troubles.
Ask an Iraqi.

The oil based economy can fall apart very quickly once its known that supplies are running out and there are disruptions.
None of the oil producing nations outside of Russia have sustainable economies. There is no doubt in my mind if America crashes hard it will take everyone with it. If the depletion in the Middle East is real then for them and the governments that do know about it to hide it is a crime since it could lead to the deaths of BILLIONS.

Finally I think it is too late to prevent major disruptions in America but look at it this way our current oil production internally is plummeting we need secure oil supplies Mexico is pretty much a goner and the oil sands won't come on line fast enough. Were not going to be able to play the invasion card that many more times and oil production in a war zone as we have seen is problematic at best.

But its gonna take a lot of oil to kick the oil habit we have to used our oil based infrastructer to create these new electric rail lines and vitalized urban centers its a massive construction project.

Start working through the material and energy costs of de-oiling america there tremendous. We will need every barrel of oil we can get our hands on when we finally wake up and do something about it.

So figure we won't do anything till the second year post peak work a forecast for say 2% 4% 6% 8% depletion rates.

Add in some fairly massive demand destruction to some extent esp in the 3rd world. We would at that point have given up a lot of our excessive usage and simply from recession.

But take a good hard look at Africa they can't seem to get out of the quagmire there in and the root cause is lack of resources to create infrastructure. It takes money to make money. If were not careful to much of the world will tilt into the same situation as Africa.

Sorry for the rambling but yes at some point times will get very very tough world wide and we will need every drop of oil and coal to make it through it. And if you remove the small amount of oil that Africa can afford from there grasp you push a whole continent that not doing well into desperate straits.

How to finish...
Get everything we can into production depletion and skyrocketing prices will take care of wasteful demand and maybe if we do this we can keep Africa going and get our economy converted.

> I think your mixing low consumption in the African countries with critical consumption. Its the diesel that powers the clean water well or gets perishable goods to market on time or powers the ambulance. They certianly don't wast oil which means what they do use is critical.

A very good point. It worries me some that a number of people think loosing your kerosene lamp and stove is less troublesome then loosing your car and moving to a shared apartment. As if complete hardship is easier for the poor then some hardship for the rich who on average has electric lights and piles of old resources around them as fallback.

> None of the oil producing nations outside of Russia have sustainable economies.

Norway has one.


I am afraid that I have to agree with Memmel on the sentance:
 "I think the future will show the lack of transparency on the part of OPEC was the biggest crime commited in the 20th century.", and I have made this opinion clear in prior posts.  In todays interlinked world, simply because you own an asset does not give you the right to be secretive, and go even further and possibly be outright misleading in your public pronouncements if you wish to be an accepted and trusted supplier and modern world player.

Every modern and trusted player on the world stage, be it large company, charitable or non-governmental not for profit,  and/or natianal or governmental entity is now expected to accept standard accounting practices, outside auditing, and third party confirmation or oversight, if it expects to be accepted as modern and trusted, with the stunning exception of the energy industry, that most CRUCIAL of all modern industries.  It is truly outragous and astounding.

OPEC, and it must be said, others including private large oil firms and other governmental oil concerns around the world and energy information agencies, go further than just being secretive and silent, but instead are perfectly willing to put out their own brand of decietful "dis-information" to sway events.  This only serves to even further expand their crime of "lack of transperency" and make it a crime of misleading and false statements, false advertising (Exxon, remember?), and when they give this testimony to the U.S. government and other international governmental judicial bodies and legislatures, it elevates it to outright perjury and obstruction of justice, as well as falsifying evidence, evidence needed in the preservation of whole nations.

Memmel is correct.  If the "doomsters" are correct, and against all the misleading, lulling, comforting testimony of the oil companies and OPEC, a rapid and soon occuring decline in world oil production begins, the OPEC cartel and the private oil companies should be held accountable for making proper preparation all but impossible to win support for through their misleading statements and secretive policies.   Allow me to quote the phrase that goes right through me..."well, BP and Exxon say....and they ought to know....", which is used by every man and woman on the street to shoot down any cause for concern, and instead to continue the waste and poor policy of business as usual.

I have made this case before.  If the "peak aware" community has awoke us to a great imporatant fact that is ALREADY a fact ( because peak, let's admit, we just don't when or how it will occur yet), it is this:  The United States and the industrialized modern world is in a very dangerous position in running completely without guidence and forward visibilility.  It is like running a car down a dark road at night at high speed with no lights.  Nothing may go wrong.  But do you want to take that chance?  And if you should hit someone or something in the dark, do you think you would be held  legally accountable for your actions?
The same goes for OPEC, the private oil firms, the EIA and the IEA and the USGS, among others.  (CERA for instance, should be sued out of existance if they are as wrong about crude oil as they have been about natural gas, and keep spreading the same disabling and lulling propaganda when once they clearly know better.

In the meantime, every responisible business, Civil Defense agency, local, municipal, county, state and federal agency, along with critical services and utilities, hospitals, and on and on, have a civic obligation, and a fiduciary responsibility to their stakeholders to inform them of the blindness we are running in and the need to prepare as though the worst could happen.  One of the great services the Peak Aware community performed for me when I first discovered them (and TOD, by the way :-). was to help me see that what I thought "we knew" we most certainly did not "know", and to see the danger of the complete lack of forward visibility we are living with.   (I was blind, but now I see that I was blind, and that is a great bit of sight indeed!)

This is a service "we" must keep performing.  It is one of the most valuable services of the peak aware community.  Thank you.

Roger Conner  known to you as ThatsItImout

Has CERA been wrong about oil production?

If you are talking about predicting prices, then lots of PO advocates were wrong historically, too.

I don't follow CERA's oil production numbers closely as they don't release it to public, but from what I understand of them is that they got great respect in estimating future production with a proven track record.
Is that wrong?

If I'm right I think the future will show the lack of transparency on the part of OPEC was the biggest crime commited in the 20th century.

What about Mr. 5%?

The oil majors had a better use for Iraq's oil than drilling it - not drilling it.

memmel says:

I may post about doom and gloom but I'd love to not see peak oil happen. I wish it was in 30 or better 100 years because I'm convinced it will be very bad for mankind.

If you think Peak Oil now will be bad, what it would be like in another 30 years (let alone 100!) doesn't bear thinking about.  The longer we have before the peak, the further down the path of unsustainable development the world will go.  What we really need is Peak Oil now (or, as some TOD commentatorrs have been saying, Dec05) and then a slow slide down.

We may very well have reached the Peak & I certainly hope so, though I'm not yet willing to bet that we have.  Will we have a fast (8% p/a) slide or a slow (2% p/a) one?  There's a world of difference in the consequences and I'd like it to be the latter, but if it's the former, I'd rather live to see a peak & an 8% slide now than have my kids see it in 30 years.

The fact that many large fields may be going to suffer 8% annual production falls is quite bad news.  I seem to remember, however, someone with more maths & technical knowledge making a case that, even if individual fields are going to decline at 8%, the pattern of new fields coming on will mean a much slower overall decline - which which would be much better.

As far as having new fields come on line through opening up new exploration provinces, I think it would be best if it happened later rather than earlier.  The last thing we want is to drive down the price of oil so far that people can think it's safe to buy a SUV again & Peak Oilers are just a bunch of Chicken Littles.  It's best if the oil comes on stream when the whole world knows that using it frivolously is a crime and we have to treat it as an energy bank for the transition to a sustainable future.

Later allows more technical innovation we are just now researching how to wean the world from oil. 30 years buys time. I don't think technology will save the day but it will certianly help. There are a lot of technologies that will make a post oil world a much better place.

1.) Ultra high density capacitors ( this is a simple physics problem of surface area of a conductor )
2.) Better lighter batteries.
3.) Cheap solar cells.
5.) Super conductors.
All of these make electricity storable.
Finally decent fuel cells.

There is a tremendous amount of commercial work in all these areas because of laptops and mobile phones so there being well explored without regards to transportation issues.

Next I don't believe anything we do now will prevent peak oil we will face it.

Oil like the coastal housing markets will face the same pricing pressure once demand exceeds supply not only will it go up but it will go up exponentially.

Think about it if we start this oil exploration new its 5-6 out at least before stuff comes on line if not longer and if there is anything there is the first place.

And added benifit is that if the SUV drivers have to deal with a oil well in their backyard maybe they will wakeup to peak oil.

Its amazing that no one is wondering why we have to do this now since the goverment couches it in terms of secure oil not peak oil ( bastards).

I may post about doom and gloom but I'd love to not see peak oil happen. I wish it was in 30 or better 100 years because I'm convinced it will be very bad for mankind.

Thanks a lot guy!!!!!!!    You must be in the 30/40 age groupe.

Don't let it happen to me, let happen to someone else on down the road.

Is it really deepwater?

"The term deepwater usually refers to drilling at water depths over 1500 feet or so"

"The depth of the shelf also varies, but is generally limited to water shallower than 150 m."

This is a good question which I did not investigate far enough. There are two considerations, the water depth and the crust depth below that. I will look into it.

In this post, I merely raised the possibilities but further research is required. As I said, I was talking about deepwater drilling, which is no doubt the case in most of these offshore areas.

But the devil lies in the details, which I tried to make clear.

best to you Halfin, Dave

I'm in El Paso right now and can't look the apropriate references up, But J. Ben Carsey wrote an article for the AAPG  Bulletin about deep structures in the Gulf of Mexico and Michael Halibouty published a map of the deep water salt domes in the pocket maps of his 2nd edition of Saltdomes of the Gulf Coast and Mexico. If someone could locate and post these we might have a little idea of the number of deepwater structures out there. Most, if not all, of the oil and gas fields in the Gulf are associated with salt domes.
   I, personally, feel that there is a lot of oil and gas out there, plus in deeper depths of the salt domes in shallower water. But, it will only slow our decline in oil in the US. Natural gas is a different matter. The Gulf is gas-prone,as are wells more than 10,000 ft subsurface anywhere. But the deepwater stuff will have to be completed and operated by robotics and that isn't going to be cheap or easy.
I am not sure on how many rigs are leaving the Gulf, or if they have even left yet, but does this all mean we must wait a few yrs before deepwater drilling begins? since rigs are on order, but not built yet?
I can't tell you how much I appreciate this.

I've been looking for a concise report to fling at those who see the OCS as the Saviour of Mankind.

Thanks, too, for the clear writing.

Yes, great post.
Once again, whatever the truth about the OCS resources, and Dave helps shed light on this, it is the junkie looking for another fix. If it were a matter of bridging in the context of an internationally agreed to plan to bring us down to sustainability, then maybe. But it's no such thing. So when catastrophe does compel us or our children to take this seriously, the bridging option will be gone, and the environment will be wrecked.

In more cynical moments, I think Darwin was wrong: lemmings, not apes.

BTW, more and more I am convinced that peak oil is not alone, but is intertwined with several competing disastrous trends: soil, water, metals depletion, climate, population, etc. All these bills are coming due are very much intertwined and interdependent--and mutually reinforcing in several cases. (There was mutual reinforcement between technology, energy, and population on the way up -- and there will be analogous reinforcements on the way down too.)  

Some of the data that would back this up is in Ron Nielsen's The Little Green Handbook. Jam-packed with tables and data, and the part on energy is in no major conflict with what I read here.

Clive Ponting's Green History of the World is also an extremely interesting and puts things in historical perpective.

I think this captures the sentiment (from the early days of TOD):
The political implications of this could be quite significant for the next 2 elections (2006 & 2008). If the Democrats are able to block the passage in the Senate and then we have gas prices going through the roof and gas shortages and/or high prices and shortages of natural gas, it might be very difficult to get a Democrat elected to "dog catcher" in the following election. If they go along with it, they will be seen as selling out to "Big Oil".
Looks to me as though it puts the Democrats in a pretty big dilemma.
And if they do block it, I would almost guarantee that there will be a major price spike just before the election.
And the Democrats would do the same thing if the ball was in their court. Ain't politics grand <GBG>.
I always see/hear people talking about all this oil here or there - billions of barrels. Just thinking about it simply, if we brought 19 billion barrels online today so that the global URR increased by 19 billion barrels, then presumably the midpoint of consumption would occur at 19/2 = 9.5 billion barrels later than previously though. At the present rate of consumption that might push peak oil out 15 weeks. BIG DEAL. In practise this new POTENTIAL production MIGHT come when we are already on the way down anyway. The problem is the absolutely out of control voracious consumption means that a few billion barrels is neither here nor there in the big picture. Is that a fair way of looking at it?
Yes and no. If spread out over 20 years it would be 2.6mmb/d, or 10% of us consumption or 3% of global consumption- and, no doubt useful in the period 2015-2035.. Not likely, of course. The dems would be fools to fight it, so presumably they will.
But those numbers do not account for anticipated growth of consumption over the next 20 years toward 120 million barrels per day.  
ahh yes... I forgot about that 120mbpd thing... silly me.
Thanks for the post, Dave. I am always astounded to see enormous numbers for "undiscovered resources" at this late stage in the game.

I view these sort of forecasts (including the USGS 2000)  as carefully crafted disinformation, and it is really damaging. Some people believe it outright, and most others simply pick up the idea that all we need to do is drill [OCS, ANWR, Antarctica, etc.] and our problem is solved. It provides one more excuse not to take the really appropriate actions.

With this huge glut of undiscovered oil and NG everywhere, I was wondering: how have we failed to find this so far? I like the Shel Silverstein explanation:

"I was stoned and I missed it
 I was stoned and I missed it
 I was stoned and it rolled right by ..."

Thanks, Rick.

Send me an e-mail, OK?

uh huh, there is a gold mine out there... slighly offshore... we all knew about it.... but we sat on our arses.... yeah right!
Your analysis misses the point completely and typifies the lack of perspective that pervades this site. Any energy source or peak oil mitigation plan that can't provide us with 100% of our needs right now is derided as not worth doing.
More drilling, public transportation, ethanol, biodiesel, telecommuting etc. are small parts of a solution. There is no silver bullet. I would rather let the oil companies try to find oil on the continental shelf using their own capital than listen to you naysayers state that it isn't worth it, when you don't know yourselves.
I don't think that's the point Dave is making.  

You see, when you have folks like Terry Jeffrey, editor of Human Events, on Hardball last night promulgating that offshore drilling is going to be THE PROVEN THING that's going to save our bacon.

The first thing that indicates to me is that our bacon needs to be saved.

The second thing that brings to mind is that we'd better make sure what we're putting in the frying pan isn't a load of horseshit before we depend on it.

Last I checked, horseshit doesn't have the flavor, or the ability to save our asses, of that lovely meat we call bacon.

Then Terry Jeffrey is wrong too, there is no silver bullet. Can't we all just agree that every little bit helps?
My perspective is that most of us do agree that every little bit helps, but there's a big difference between "helps" and "makes the problem go away".
Just the other day, PG, I used the term assholes to describe companies responsible for the flight of drilling rigs from the Gulf of Mexico to the Persian Gulf.

And here you are using the word "horseshit" (a personal favorite of mine which I wouldn't dare use now) in this thread.

I believe it was "OldHippie" who said, "this ain't Sunday school".

Indeed. Did anyone see the R/P ratios cited? And get the gist of my post about prospective areas in the OCS? Horseshit! Now, I feel better.

best, Dave

Darn, I flipped on Hardball to see if it was interesting, but turned it off again before they got to oil/energy.
Re: "misses the point completely...."

Thanks for your point of view, Keithster. I assume you read the 134 page document issued by the MMS from which I quoted the relevant parts and so you are uniquely qualified to comment on my analysis.

No silver bullet? Well, I couldn't have put it better myself, unlike the Congress. No doubt you have inside sources at the MMS to tell us all about non-existent "undiscovered" resources in the OCS areas of the North American continent. But in case you don't, perhaps you will study up on the issue and get back to us later.

I hate to say this, but reality is a terrible thing sometimes. And this is one of those times.

best, Dave

The point which you miss is that the hypothetical 19 billion barrels of shelf oil and agricultural conversion isn't going to delay the peak oil crunch for the USA by decades.  The US consumes 22 million barrels of oil a day wich translates into  8 billion barrels a year.  So 2.4 years worth of oil is nothing to get excited about, especially when it is likely to be an inflated number to start with.

Nobody on this site knocks public transit, telecommuting and any other measure that would conserve oil instead of looking for magic replacements, so you are using a straw man argument.

Hello TODers,

How about an opposite perspective?  Let's all be happy idiots for a moment and imagine that these OCS FFs exist and are recoverable.  By the time these resources started coming ashore in 5-10 years or more, surely the world would be in postPeak desperation at this time.  These FFs would have to immediately be turned around and go into the bunkers of our military ships, to thereby try and hold off all the attacking foreign navies wanting to sink these OCS platforms.  Jay Hanson called this, 'If I can't have it, you cannot have it either'.

Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

I've said it before and I'll say it again, the military will have plenty of fuel...even if peak happened the day before yesterday, there will be a lot of fossil fuel around for decades, and who do you think will be first in line to get it, organized armed forces with big guns, or Mr. Suburb lined up at the local convenience store on his trusty John Deere lawn tractor?

The remnants of fossil crude, natural gas, the OCS stuff, GTL (gas to liquids), tar sand oil and coal to liquids will run the military for another century may make a filthy mess doing it, but people will put up with it in the hopes of at least holding on to national unity and security...and Mr. Suburb may have to go back to a push mower (horrors!) and a small car  (HORRORS!!!)

Roger Conner  known to you as ThatsItiImout

According to Don Fournier the US military consumes 1.5% of the energy used in this country.
I'm not sure if that's a peacetime figure but it wouldn't be unreasonable to assume that it is.  The invasion of Iraq and continued activity in Afghanistan probably increase the number.  Add various police forces, coast guard, possibly National Guard and other governmental agencies that would necessarily come closer to the front of the line than "Mr. Suburb" and the amount might be a (WAG) very inelastic 3.5 to 4% of the current total or about 850,000 barrels/day at 4% (out of 21 million).
If, say next year, the US can only squeeze 20 million/day out of the global oil system, that 4% becomes 4.25%...a 6% larger bite.  
It's a situation not unlike the problem of declining exports from oil producing countries that need to supply more of their own oil to their own populations as those populations increase and require more.
$75 oil is cheap...unfortunately.
DougR56 - this is something I wondered about.  I wonder if the figure 1.5% applies to the military or to the military industrial complex - all those weapons factories, boat yards etc and all the folks that work in them?
From the context of the interview I'd say it applies strictly to the force component and not to the complex.
There's probably some folks in the basement of some government building working busily away at a color-coded rationing scheme based on critical need for gasoline with M/I complex workers nearer to the top than, say, personal injury lawyers.
The industrial part of the complex is mostly electrical little of which uses petroleum.
If Climate Change proceeds apace what would happen to drilling at sea in 5 - 10 years, and more.

More intense storms predicted.

Safety?  Expense?  Shut downs?  Insurance...

Isn't PO about the end of Cheap Oil.

We may still find plenty of oil out at sea - but Cheap Oil? - not so sure.

Dave, an excellent article.  I just can't get over the volume of excellent information posted on this site.  Here's a geology perspective from the UK.

Following the major exploration and production success of the North Sea, the UK governemnt opened up the Atlantic Margin (all that massive area to the west of Britain) to exploration some time during the 80s.  A UK Marine even spent a week on Rockall (a tiny rock sticking out of the Atlantic Ocean) in order to ensure the UK's claim to sovereignty over the sea bed.  To cut a long story short, the outcome of extensive exploration has been pretty disappointing.  A few fields were discovered and are now on production (BP's Foinaven, Schiehallion and Claire fields) but this has been nothing like a North Sea bonanza.  The reason - in most areas the source rocks are way too deeply buried and are post-mature for oil and gas.

So it would be wrong to be overly optimistic about prospects along the US Atlantic margin.  Further North on the Grand Banks there are a couple of modest oil discoveries made I believe by Mobil back in the early 90's (Hibernia and Terra Nova) produced via gigantc ice berg proofed concrete platforms.  But this is in no way analagous to a North Slope or GOM style oil everywhere you drill petroleum system.

One aspect of US geology is that the Mississippi carries most of the east continent drainage southwards, dumping a huge pile of sediment into the GOM.  It is this river / sedimentary system that provides the GOM with the burial / thermal history and reservoirs that result in this most prolific of petroleum systems.  So it would be completely wrong to extrapolate from the GOM into the Atlantic margin as the GOM's gain from the Mississippi is the Atlantic margin's loss.

This is not to say that major discoveries cannot be made - but merely reinforcing the sceptical view expressed by many TODers that the US government is being somewhat optimistic in its estimates.  One might even call this incompetence or propoganda.

You just hit the nail on the head.
Lets hope that this does not happen when you start drilling:

Poisonous mud and gas is erupting from kilometres below the earth and 8,000 people are displaced and hundreds hospitalised on the Indonesian island of Java.

The calamity has been caused by a gas exploration project near Surabaya in East Java that has gone horribly wrong, and for the past six weeks, has unleashed hundreds of tonnes of hot toxic mud.

Indonesia's police are threatening to charge some of the drill operators with criminal negligence, with two Australian companies caught up in the row.

Oil and gas giant Santos is a minority shareholder in the venture, while the expertise of another Australian company - Century Resources - has been called in to try and halt the blow out.

Six weeks ago, a drilling rig on this site reached three kilometres underground and encountered a problem.

Attempts were made to shut the well, but then the earth opened up.

First, a major crack appeared and now they have appeared all around, spewing at least 500 cubic metres of toxic mud every day.

An area of 12 square kilometres has now been covered and four entire villages have been affected, displacing almost 8,000 people.

Kwoledge shows us how to extract OCS oil and gas. Wisdom shouts,"DON'T DO IT!"  Say the Senate passes this bill in the next 2 weeks and Dubya signs on the way back to his usual August vacation. Sometime next year there is the usual auction of plats. The year after that the siesmic studies get serious. 3 or 4 years after that the first exploatory wells are drilled. Another 4 or 5 years after that a few thousand bbl/day are flowing. Sometime around 2020 maybe a MMbbl/d are flowing after an investment of tens of billions of dollars.
10 billion dollars could buy a thousand wind turbines. another 10 billion could build the manufacturing capacity for millions of lithium batteries per year. Another 10 billion could buy 500,000 PHEVs so we wouldn't even need that oil.  Wall Street could invest 30 billion in hundreds of dry holes or it could invest in sure things so we won't need 15 of the 20 MMbbl/day we know use.
Last summer's Energy Bill contained one provision that was a real eye opener for me.  It repealed earlier Congressional prohibitions on government assessments of oil and gas resources off the coasts of serveral states!

It seems that as local crowd pleasers, certain congressmen had gotten written into law constraints on even KNOWING how much oil and gas where off their districts.

How the heck are we to make informed decisions if we remain WILLFULLY ignorant?

This MMS report is welcome in the effort to better understand the potential.  However, Dave and the commenters have effectively and deservedly torn it to shreds.  The USGS efforts are no better and appear grossly optimistic.

As one of the oil industry pioneers (Getty?) used to saw, "Ain't nobody knows except Dr. Drill."