Drill Bits: How Much Oil Would Drilling in the OCS Yield?

By Natalie Gewargis

Aug 6, 2008 4:38pm

Some readers have been asking about estimates about what new off-shore drilling would yield from the Energy Information Administration which says lifting the moratorium on new off shore drilling rigs would only yield 200,000 additional barrels per day.

Experts with whom we’ve spoken find that estimate way too low. People in the think-tanks whom we’ve interviewed, but also those in the oil and gas exploration industry.

A 2007 report by the National Petroleum Council, for instance, says opening the outer continental shelf areas cordoned off by the moratorium could yield more than 1 million barrels per day by 2025, with almost 2.8 billion barrels of crude produced in these areas between now and 2025.

The Energy Bulletin writes "How much new oil will arrive then? No one can say conclusively. Think in terms of one to two million barrels per day by 2025-2030."

The EIA assessment seems all the more low when you look at these three oil rigs: Thunderhorse — 250,000 barrels per day; Atlantis – 200,000 barrels per day; Independence Hub — the natural gas 850  equivalent of 140,000 barrels of oil equivalent per day.

Experts say the notion that dozens, if not hundreds, of new rigs would combined only equal the approximate output of one of these pre-existing rigs is just low.

Others, of course, disagree. And the truth is, no one will know until and unless the drilling takes place. I’m expressing no opinion about that decision — just suggesting that the 200,000 bpd figure is hotly disputed.

One other interesting note from yesterday’s Oil Daily : "Preliminary data shows US consumption is down a hefty 860,000 barrels per day in the first seven months of the year compared with the same period of last year.  …Nevertheless, overall global oil demand is still rising thanks to China and the Mideast, and was up an estimated 540,000 b/d in July."

In other words, American consumers are lowering their consumption of energy. But demand is going up worldwide anyway because of everyone else!

- jpt

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