Cheap Oil Myths

The United States DOES NOT have large untapped reserves of “cheap” crude oil!

It may be true that there are still large reserves of oil yet to be extracted, but nearly all of the conventional, cheap oil within our borders has been extracted already. The harder to get oil “could” exist in great volume but extracting it is significantly more expensive and in some cases might never be economically viable. Something that must be understood with regard to oil reserves is that there is no such thing as a big undergound lake of oil. Even conventional oil wells do not sit upon vast lakes of oil (which many people believe). All conventional, cheap oil wells extract oil that is trapped within porous rock. You can imagine how much more difficult (and expensive) it is to extract oil from unconventional oil reserves like the Canadian tar sands where a lot of energy is required just to separate the oil from the sands. When you use energy to get energy there is a point at which dimished returns turn into no returns. At that point it’s no longer economically viable.

There are numerous websites and emails ciculating around that talk about untapped reserves that aren’t being used because of environmentalists or conspiracies regarding middle east countries. If you subscribe to these conspiracies then you are acknowledging that you believe the U.S. government (and specifically the military) lack the power to ensure the security of our nation. I say this because a U.S. Military report has identified peak oil as a significant security risk to our country. If our military is aware of this risk do you really think they are incapable of doing what’s necessary to tap oil resources within our borders? Why do we have so many offshore drilling rigs (which are neither cheap nor conventional) if vast reserves of conventional oil can be found onshore? It simply makes no sense. This is a situation where I’d like to apply Occam’s razor that posits that the theory that makes the fewest assumptions is likely the correct one. Is it more likely that there is a vast conspiracy by environmentalists, or oil companies or middle east countries (or a combination) that stops us from tapping huge, cheap oil reserves -or- is it more likely that we’ve already tapped most of the cheap conventional oil and that what does remain (regardless of its quantity) will be much more expensive to extract?

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