There's Lots of Oil Up There:

A new report from the U.S. Geological Survey concludes that there are substantial untapped oil and gas reserves in the Arctic, perhaps amounting to as much as one-fifth of global supply. As the NYT reports:

Oil companies have long suspected that the Arctic contained substantial energy resources, and have been spending billions recently to get their hands on tracts for exploration. As melting ice caps have opened up prospects that were once considered too harsh to explore, a race has begun among Arctic nations, including the United States, Russia, and Canada, for control of these resources.

The geological agency’s survey largely vindicates the rising interest. It suggests that most of the yet-to-be found resources are not under the North Pole but much closer to shore, in regions that are not subject to territorial dispute. . . .

The assessment, which took four years, found that the Arctic may hold as much as 90 billion barrels of undiscovered oil reserves, and 1,670 trillion cubic feet of natural gas. This would amount to 13 percent of the world’s total undiscovered oil and about 30 percent of the undiscovered natural gas.

mr. j. meade (mail):
Where's the other 87% of the world's total undiscovered oil and 70% of the undiscovered natural gas?

I really have to question the value of these predictions when I see them quantified as percentages of things that may or may not exist.
7.25.2008 10:38pm
Dave N (mail):
I also have a problem with the entire "undiscovered" bit. What does that mean? If oil is undiscovered, how do we know it is there?
7.25.2008 11:05pm
gattsuru (mail) (www):
Oil industry terminology is a bit off from normal English. "Undiscovered" -- I assume they mean unproven -- reserves are those which are believed to exist with a certain low probability of being economically recoverable, usually ~10%. Remember, oil production has to use indirect measurement on the scales we're talking about, so even active wells may only be ~60-80% certainty of their actual economically recover values.

It's typically a better estimate than the 10% value suggests -- the economics of oil make underestimation typical rather than the exception -- and it does have a real factual basis, but it is only an estimate.
7.25.2008 11:25pm
zippypinhead:
Unfortunately,
:The findings also confirmed the pivotal role of Russia. Nearly two-thirds of the yet-to-be found natural gas resources are in two Russian provinces, the West Siberian Basin and the East Barents Basin, which straddles the territorial waters of Russia and Norway."

I recall reading that for a few years Russia has been making international claims that large parts of the Arctic Ocean are atop the Siberian continental shelf. Putin is a clever fellow. Untrustworthy business partner as BP and others have already learned the hard way, but clever...
7.25.2008 11:30pm
Tyrant King Porn Dragon (mail):
Cue conservatives confusing 'the Arctic' with the Alaskan Wildlife Refuge in 3... 2... 1...
7.25.2008 11:48pm
EH (mail):
I highly doubt that conservatives are the only political faction acting in the interests of the oil and gas industries.
7.26.2008 1:29am
theobromophile (www):
Does "undiscovered" mean something closer to "untapped"? Otherwise, nonsensical.
7.26.2008 1:36am
Randy R. (mail):
So does this mean that conservatives FINALLY believe that climate change is happening? Oh, the irony....
7.26.2008 1:55am
southpaw (mail):
I was similarly amused by the number of "undiscovered species" we were supposed to be losing along with the rain forest. It does seem to be a widely used term, so presumably there's some cognizable meaning.

If this report is true, there's a deep and horrifying irony to it. Whether you see it as a vicious cycle or some sort of divine providence, climate change has led to the availability of more oil.
7.26.2008 3:24am
Alan K. Henderson (mail) (www):
So does this mean that conservatives FINALLY believe that climate change is happening?
AGW opponents (not the same group as conservatives, but there's strong overlap between the two) claim that Arctic ice thickness has always been variable, so the answer is no.
7.26.2008 3:53am
David Schwartz (mail):
If you have a thousand upside down cups, and you flip over 50 of them, and find three quarters, you can estimate that there are approximately 60 quarters in all the cups. Statistical sampling allows us to infer information about the stuff we haven't found.
7.26.2008 9:12am
Zen trainee (www):

As melting ice caps have opened up prospects that were once considered too harsh to explore...
7.26.2008 9:25am
Mark Gaughan (mail):
"Cue conservatives confusing 'the Arctic' with the Alaskan Wildlife Refuge in 3... 2... 1..."

The Arctic National Wildlife Refuge in Alaska is located in the Artic.

From the USGS:
"Of the estimated totals, more than half of the undiscovered oil resources are estimated to occur in just three geologic provinces - Arctic Alaska, the Amerasia Basin, and the East Greenland Rift Basins."

Tyrant King Porn Dragon what confusion are you referring to?

(all emphasis mine)
7.26.2008 10:11am
corneille1640 (mail):

and 1,670 trillion cubic feet of natural gas

I have a question for any geologists out there who happen to be reading a lawyer's blog on what is (where I am, at least) a beautiful Saturday morning: how is natural gas found in the wild? Is it dissolved in rock or water and then extracted, or are there simply pockets of gas locked up in the earth that is somehow captured before it escapes? This question has always intrigued me and I haven't been able to find the answer.

I apologize for being (somewhat) off topic, but it is a Saturday.
7.26.2008 10:17am
Sam Hall (mail):
I emailed a geologist I know to stop by and give us a answer. I do know that sometimes a well will produce both oil and gas.
7.26.2008 10:59am
Mike C. (mail):
corneille1640

Will a geophysicist do ? Gas is trapped in porous rock in exactly the same manner that oil is trapped in porous rock. Usually (but not always) this is sedimentary rock of various types, which initially contained water in the pore space. Gas migrates into the reservoir rock via faults, fractures, etc., and displaces the water (or some of it, anyway.) So long as the seal holds, you have a gas deposit. Which may or may not be economical, depending on a host of factors. As with oil, to find gas, one looks for areas where hydrocarbon generation and migration is likely to have occured, where some sort of reservoir rock may have been filled by the generation and migration, and where there is sufficient seal to have preserved a hydrocarbon filled reservoir until the present time. Under some conditions, one can pretty reliably detect gas deposit directly in seismic data.

As to the talk of "Undiscovered" hydrocarbons, these are estimates based on the size and nature of the basin being examined. The stratigraphy and tectonic history of the basin has a very large role in such estimates, and if there is sufficient data on these matters, the estimates can be fairly good for what they are. But the use of the word "undiscovered" here means exactly what it says in plain English. There has been no exploratory drilling in the area under discussion, and these are estimates of how much hydrocarbons might be discovered if such were to take place.

This is entirely different from standard industry classifications of reserves into Proven, Probable and Possible.
7.26.2008 11:07am
Sam Hall (mail):
Mike C. sorry I insulted you by calling you a geologist. I know better.
7.26.2008 11:12am
Mike C. (mail):
But I am a geologist. Or at least one degree and my state certification say so.

Geologists make the best interpretation geophysicists, you know.
7.26.2008 11:17am
corneille1640 (mail):
Thanks, Mike C.!
7.26.2008 12:03pm
Richard A. (mail):
On a more practical level, let me note that we already have a pipeline running to the Arctic Ocean and that eventually the reserve currently being tapped there will run out. It would make no sense to let that pipeline lie there unused with large reserves nearby. Therefore exploration would seem inevitable, especially in a world with rising oil prices.
7.26.2008 12:30pm
maybe this is the answer to all my financial troubles (mail):
Concerning the land that potentially holds these reserves, does it tend to be private, government-owned, or unclaimed (in which I assume the default is that it still belongs to the state)? I read recently about how land owners in North Dakota are becoming millionaires because oil is being found there. Would it be realistic for private citizens to purchase land way up north, in the hope that the land will become valuable if oil or natural gas is found underneath? Is the government, or are corporate entities, way ahead of the game on this?

Maybe living in Alaska wouldn't be so bad, if I could pay off my students loans from law school.
7.26.2008 12:48pm
byomtov (mail):
1,670 trillion cubic feet of natural gas

Just out if curiosity, what does this measurement mean? Gas doesn't have "volume" in the way that liquid does. It depends on pressure and temperature doesn't it?
7.26.2008 1:56pm
AKD:

As melting ice caps have opened up prospects that were once considered too harsh to explore...


You could as easily say "as rising oil prices have opened up prospects that were once considered too expensive to explore," but that is not the spin NYT wants to put on the story.
7.26.2008 1:56pm
whit:

So does this mean that conservatives FINALLY believe that climate change is happening? Oh, the irony....


actually, your feeble trolling attempt aside, the general disagreement is over to what extent the causation is caused by mankind (anthropogenic i believe is the word)

nobody denies climate change happens and is happening. see: ice age, etc.

iow, everybody agrees climate changes over time.
7.26.2008 2:35pm
Mike C. (mail):
byomtov,

When you see those numbers they are at standard temperature (about 76 F, IIRC) and pressure (14.7 psi.) You will also see cubic meters (same conditions) some times. In pricing (such as Henry Hub gas prices), you'll see MMBTU. Pipeline gas is 1000 BTU/scf, so for pipeline quality gas, 1 MMBTU = 1,000 scf.
7.26.2008 2:38pm
trad and anon:
The assessment, which took four years, found that the Arctic may hold as much as 90 billion barrels of undiscovered oil reserves, and 1,670 trillion cubic feet of natural gas.
Translation: the Arctic holds less than 90 billion barrels of undiscovered oil reserves, and less than 1,670 trillion cubic feet of natural gas. A statement that something "may" be "as much" as X means that X is the upper bound of possible values, but people like to say "as much as" because it makes the number sound larger. It's a dishonest (though deplorably common) tactic, like starting the y-axis of a graph where the values move within some narrow range to make the changes look more dramatic. It's better to use a mean estimated value with an error bound.
7.26.2008 3:05pm
Mike C. (mail):
trad and anon,

It is probably a P90 value. On the other hand, the factors that went into computing it are normally evaluated quite conservatively.
7.26.2008 3:37pm
byomtov (mail):
Mike C.,

Thanks.
7.26.2008 8:55pm
EPluribusMoney (mail):
Therefore exploration would seem inevitable, especially in a world with rising oil prices.

But not in a world where people would rather wear extra sweaters and sing Kumbaya.
7.26.2008 10:12pm
Vulpes Lagopus (mail):
Putin is very much trying to drink my milkshake.
7.26.2008 11:53pm
Elliot123 (mail):
"So does this mean that conservatives FINALLY believe that climate change is happening? Oh, the irony...."

Lots of people believe that climate changes, but they see no reason to think human activity is a factor that matters. Geology shows us the climate has had a long history of change without any help from men. Strange to think nature wouldn't be able to continue that all alone.
7.27.2008 12:46am
Smokey:
The US Geological Survey states that the Arctic contains as much as 90 billion barrels of untapped crude oil [think of the downward pressure on gasoline prices that even the announcement of drilling for this gigantic oil reserve would bring about], and 1.67 quadrillion (with a "Q"!) cubic feet of natural gas [and when you look at your utility bill next winter, you will clearly understand that the environmentalist chickens have come home to roost].

In fact, the billions of barrels of oil available in ANWR [right next to Prudhoe Bay, which has been providing oil to America since the '70's's] comprises less than three square miles of barren wasteland -- which the Leftists have kept off the market, thereby greatly contributing to today's $4/gal gas.

This is equal to approximately 13% of the world's entire oil, and 30% of the world's entire natural gas reserves.

There is plenty more offshore oil and gas off the coasts of the US that is being kept off the market -- due exclusively to the anti-consumer shenanigans of the environmentalist lobby [which owns Congress lock, stock and barrel]. And that is assuming only current technological recovery methods. You have to understand that technology is going to greatly improve recovery rates. So the 90 billion barrel estimate is a floor, not a ceiling.

Anyone who wants to give increased power and influence to the environmentalist lobby, and thereby cause their families to pay exorbitant prices for gasoline, is assisting the cabal that wants to put our energy supply off limits. But why??

China is currently building two new coal-fired power plants every week, and intends to continue building at this rate through at least 2024. But the U.S. environmentalist lobby wants to hobble our country while others prosper. Why?

Most of us understand that much less expensive gasoline is available without any environmental probelms at all. We have huge oil reserves. They are there for the taking. Only Congress, and thier 'environmentalist' masters, stand in the way.
7.27.2008 1:32am
Andy Freeman (mail):
The North Pole has been ice free before. Was that AGW? Did the horrible things predicted happen?

Why is this time different?
7.27.2008 3:28am
Grover Gardner (mail):

The North Pole has been ice free before. Was that AGW? Did the horrible things predicted happen?


When was the last time the North Pole was ice-free?
7.27.2008 11:01am
AKD:
Here is a NYT article that says the Artic will soon be an open sea:

link
7.27.2008 1:48pm
David Warner:
"Putin is very much trying to drink my milkshake."

(a) Vulpes wins the thread

(b) He's far from alone, and few of this particular gang are friendly to liberty.

(c) I believe, at least regarding the fields under discussion here, that would be our milkshake.
7.27.2008 2:54pm
Smokey:
AKD:

Thank you for that NYT article. I note that the NY Times is still up to its old shenanigans. That article telling us, "We're doomed!" is from 39 years ago.

Grover:
"When was the last time the North Pole was ice-free?"
In an ongoing effort to help Grover wise up: click
7.27.2008 3:52pm
Grover Gardner (mail):

In an ongoing effort to help Grover wise up:


Two and a half million years ago! Gosh, I guess Andy Freeman will have to consult some back issues of the Bedrock Gazette and see what sort of alarmist predictions they were making about climate change back then.
7.27.2008 7:30pm
CDR D (mail):
>>>Two and a half million years ago! Gosh, I guess Andy Freeman will have to consult some back issues of the Bedrock Gazette and see what sort of alarmist predictions they were making about climate change back then.

***

They were wringing their hands and crying about all those wooly mammoth farts.
7.27.2008 8:47pm
Bruce Hayden (mail) (www):
Is the Artic ice free right now?

Last I knew, after those "scientists" predicted a 50% chance that it would be so this summer, there was about 1/3 more ice than at the same time the year before.
7.27.2008 10:42pm
Andy Freeman (mail):
> I guess Andy Freeman will have to consult some back issues of the Bedrock Gazette and see what sort of alarmist predictions they were making about climate change back then.

Snark or willful misreading?

The AGW claim is "if A, then B". If A occurred before, whether or not B also occurred is relevant to evaluating the truth of the claim.

Unless, of course, you want to argue that making the claim changed things.
7.29.2008 2:08pm