First, some background on U.S. oil and natural gas resources: Start with gas. In 2000, U.S. supplies were estimated at about 1,000 trillion cubic feet (annual consumption: 22 trillion to 24 trillion cubic feet); now, estimates cluster around 2,000 trillion cubic feet, with some even higher. The increases mostly reflect shale gas, which was once believed too expensive to produce because it was packed tightly in formations. “Fracking” (injecting water into the formations to free the gas) and horizontal drilling (extending one pipe along the formation instead of drilling many vertical wells) lowered costs.
Oil is trickier. In 2009, U.S. “proved reserves” were 22 billion barrels. That’s less than 2 percent of world reserves, a figure often cited by Obama; it’s tiny considering that Americans use almost 7 billion barrels annually. But proved reserves is a narrow concept, including only fields where drilling confirms that recovery is economically feasible. By contrast, “resources” are estimates of economically recoverable oil based on general geology and production technology. These estimates, though less certain, are much higher.
The National Petroleum Council — a group of industry officials, consultants and academics that advises the government — puts oil resources at 274 billion barrels, including 100 billion in the Arctic and 60 billion in the waters off the lower 48 states. Onshore, applying fracking and horizontal drilling to shale oil already has already stimulated a boom in North Dakota; Texas and California have similar formations. Meanwhile, U.S. oil use — reflecting high prices, more fuel-efficient cars and a weak economy — is falling. Finally, oil from Canadian “tar sands” (whose natural market is the United States) is estimated at 300 billion barrels.
Read it all here.