The Houston-based oil company Apache Corporation (APA) recently announced that there may be an estimated 3 billion barrels of crude oil under land they purchased in America’s Heartland. Such a supply could reduce foreign oil demands.
The estimated 3 billion barrels of crude oil sits under 880,000 net acres spread across Kansas, Nebraska, and Montana. The two areas of land are known as the Williston Basin around Nebraska and Montana, and the Mississippi Lime area around Kansas and Oklahoma, which is already known for its rich oil formations.
Apache currently produces an average of 748,000 barrels of oil per day. They plan to increase output in the years to come by at least 34 percent and are looking to the Gulf of Mexico and onshore facilities like those mentioned above to make that happen.
Apache estimates that onshore oil production will rise to 41 percent by 2016, compared to 21 percent in 2011. Additional plans by Apache include a production increase from 748,000 to 1 million domestic barrels of oil per day by 2016.
According to the Department of Energy, the United States uses about 20 million barrels of oil per day. Although the 1 million barrels that Apache aims to produce would only account for 5 percent of the current daily oil use, this would still reduce the amount of oil purchased from foreign sources like Egypt.
Other analysts speculate that the United States could potentially have as much as three-fourths of the world’s oil shale. Oil shale differs from crude oil in that crude oil can be pumped and refined, while oil shale consists of hydrocarbon-rich rock sediment. The hydrocarbons, called kerogen, must first be cooked before they can be turned into usable shale oil.
However, producing shale oil is a very expensive and energy demanding process. This process, called retorting, involves crushing the shale to release kerogen, which then goes through a process called hydrogenation before refinement. This process is not only very expensive in the long run, but it also produces a lot of potentially toxic waste, which makes it unpopular among environmentalists and environmentally minded politicians.
Hydraulic fracturing, or fracking, is a method used to extract natural gas from wells deep in the ground.
“Fracking technology has certainly opened up a lot of new oil supplies in the United States. However, it is highly dependent on price,” said Robert Rapier, managing editor and director of analysis for Consumer Energy Report, to The Epoch Times. “If the price stays high, that oil will likely be developed. That’s the main risk. In that part of the country, people aren’t as likely to protest on environmental grounds as they would if this acreage were in the Northeast—which would be a risk if this happened to be in New York, for instance.”
The United States may have resources that far exceed the rest of the world’s, but those resources are currently too commercially expensive to produce and cannot be counted among our national oil reserves just yet. Recently, Apache developed a rich shale oil well in British Columbia’s Liard Basin, yielding approximately 48 trillion cubic feet of natural gas.
Apache also looks to both the Permian Basin in Texas and New Mexico and the Anadarko Basin in Oklahoma and Texas, which could together yield 9.2 billion barrels of oil equivalent.
“But just to keep things in perspective, the United States goes through 3 billion barrels of oil in under 6 months,” continued Rapier. “So while this certainly helps—and creates U.S. jobs—it won’t greatly influence our domestic energy policies. I think we will continue to become slightly more energy independent over the next few years, but the United States does still import 9 million barrels of oil per day [over 3 billion barrels per year]. These new developments will help ease that somewhat, but we will continue to heavily rely on other countries for crude supplies.”
Apache also purchased 580,000 acres in the Mississippi Lime area. The company also recently identified another site in Alaska and hopes to begin drilling this year.
“[Apache is] hoping to begin drilling in the next few months, the third quarter this year for the Mississippian Lime,” said Bob Dye, senior vice president of global communications and corporate affairs for Apache, to The Epoch Times. “And the Williston-Bakken is on about the same time table. They will use horizontal drilling with multiple fracturing.”
With continually developing technologies that improve the efficiency and cost of oil shale removal, the demand for foreign oil could dramatically decline over the next several decades.
Many technologies are being developed to harness the oil shale at a reduced cost to developers and the environment. A company called Royal Dutch Shell is currently demonstrating a process called “in situ” mining. The process involves heating the shale while it’s still in the ground to release the oil.
The United States is reported to possess only 2 percent of the world’s oil reserves—until we adjust for shale oil. With that adjustment, the United States is projected to have 82 percent of the world’s reserves, according to the Energy Information Administration and the International Energy Agency, as reported by powerlineblog.com.
The Middle East now has more than half of the world’s reserves of conventional crude oil. However, once you factor in “unconventional” oil, like shale oil, the U.S. reserves are nearly double those in the Middle East.
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