March 4, 2011
The Only Way Out for the American EconomyBy Steve McCann
Economic despair reigns in America, as stagnation and mounting debt make our future look hopeless. Yet America is uniquely positioned to rebound and recover our economic preeminence. All that is necessary is a political decision to reverse our energy policy and stimulate domestic production of hydrocarbons. From that would flow a true economic stimulus that would mend many of our ills.
The United States is again, for the second time in less than three years, being reminded of its absurd dependence of foreign sources of energy, most notably, oil. The upheavals in the Middle East have driven up the cost of a barrel of oil into triple digits as it was in 2008. The increasing demands of countries such as China and India and the deliberate devaluation of the dollar by the Federal Reserve and the Obama administration are steadily pushing up oil prices in dollars.
The country's dependence of foreign sources has increased to 52% of the daily requirement as compared to 45% just 15 years ago. Over half of that amount comes from countries that are inherently unstable or ruled by despotic regimes whose interest it is to de-stabilize the United States.
Yet the United States is sitting on the world's largest untapped oil reserve. A natural resource that would not only mitigate the over $400 Billion sent overseas to other countries but could create untold millions of jobs and put the country on a sound financial footing.
The untapped reserves are estimated up to 2.3 Trillion barrels, nearly three times the reserves held by the OPEC countries and sufficient to meet 300 years of demand, at today's levels -- for auto, truck, aircraft, heating and industrial fuel, without importing a single barrel of oil.
The US could become the single largest exporter of oil and oil related products in the world, thus potentially eliminating its trade deficit, and increasing the national standard of living as well as making a massive dent in the national debt.
Here is a look at some of the largest untapped reserves:
The Bakken Fields in North and South Dakota. New drilling and oil recovery technology is making the capture of this oil feasible and some development is now underway. It is estimated that there is at least 200 Billion barrels of oil in this region. At a price of $100 per barrel the value of this find is $20 Trillion.
The Outer Continental shelf. It is estimated that around 90 billion barrels of oil sit beneath the ocean bed 50 to 100 miles off the shore of the Atlantic, Pacific and Gulf coasts. The value: $9 Trillion.
The Alaska National Wildlife Refuge. About 10 billion barrels are locked up here with a current value of $1 Trillion.
Tar Sands: Around 75 Billion barrels of oil could come from these areas which are similar to the Canadian tar sand fields and which now produce about 2 million barrels per day. The value: $7.5 Trillion
Oil Shale. This is the most massive area of potential oil production in the world with an estimated 1.5 Trillion barrel potential. The technology necessary to extract this oil is now in place and being operated on a pilot project basis. The value of this resource: $150 Trillion
There also the very real potential that further finds will be discovered as technology continues to improve.
In total the value of the potential oil reserves of the United States listed above exceeds $187 Trillion. The current national debt is $14.2 Trillion or less than 8%.
Despite the protestation of President Obama and the environmentalists the world and particularly the United States is not running out of oil. Their foolish tilting at windmills and solar will never produce energy sufficient to operate a $14Trillion and hopefully growing economy. It will be decades if not the rest of the 21st Century before any meaningful substitute for fossil fuels will be developed and additional time and investment will then be necessary to distribute the product.
Mankind's ingenuity has and will continue to develop technology to safely extract, process and market fossil fuels (which is a naturally occurring resource). But the United States must begin now to open the areas for exploration, and permit the construction of refineries and pipelines.
It is beyond absurd that a country sitting on so much natural wealth refuses to exploit it for the benefit of its citizens and instead deliberately puts the nation in the position of being subjected to the whims of others and face national insolvency. It almost appears to be deliberate.