Drill, Drill Drill: 20 Billion Barrels of Oil in Cuba?
HAVANA -- Cuban officials say that exploratory drilling to assess the potential for oil reserves in the Gulf of Mexico is likely to resume in the second quarter of this year, a sign that lower world oil prices have not derailed efforts by the Cuban government and its foreign corporate partners to keep moving toward offshore oil production.
Cuba's state oil company (Cupet) has estimated that there are 20 billion barrels of recoverable offshore oil in Cuban waters. The U.S. Geological Survey, though, has issued more conservative estimates: under 5 billion barrels in Cuba's offshore fields.
23 Comments:
The incredibly asinine thing is that we wouldn't be able to buy Cuba's oil. It's perfectly OK to buy Iran's oil, but not Cuba's?
Why aren't the free trade people being more vociferous about the Cuba situation? Embargoes have never worked, and they will never work. The best way to help Cubans is to trade with them - I figure a freer market will come with time. It's working with China!
The thing that is even more asinine is that Cuba is willing to drill off its coast buy the United States refuses to drill off the coast of Florida.
Cool, anywhere from a 5000 to 20,000 day supply of oil for the US, sitting right off the coast of Florida.
Someone remind me again why we're not drilling and using that oil?
Dave - the real reason is because the oil in the gulf is much more expensive to drill than the oil in the Middle East/Venezuela, etc. We'll let those poor countries exhaust their supply of oil while it's cheap, then when there's profit to be made we will start going after our own oil in earnest. Then after that, there's oil shale.
Not to excuse Cuba's human rights record, but if we can deal with China, the lesson is we can deal with Cuba.
BTW - Brazilian oil company, Petrobras, said last year that their offshore drilling operations are competitive at $40 a barrel - that was when the price of oil was performing its sky high death march. (Commodities and a heated market threw production costs through the roof. Now that both have cooled, so have production costs).
What embargo?
"... despite all the scribbling and gabble about the "U.S. embargo of Cuba," or "Blockade" ... the U.S ... is Cuba's biggest food supplier and fifth biggest import partner, and has been for the past five years. The U.S. has done over $2 billion dollars worth of business with Cuba the last few years-all for cash.
It seems Castro is a dead beat, and those who scream about the "embargo" are simply looking for U.S. financed Import/Export loans for Cuba:
In late 2006 France's version of the U.S. Government's (i.e., us taxpayers) Export-Import Bank, named COFACE, cut off Cuba's credit line. Mexico's Bancomex did likewise. This came about because the Castro regime stuck it to French taxpayers for $175 million and to Mexican taxpayers for $365 million ..."
Early this year, one of the Cuban regime's best friends, South Africa, was also compelled to bend over for the soap. Cuba stuck it to the Export Credit Insurance Corporation of South Africa (South African taxpayers) for $117 million, dating back to 1996.
Last year, one of the world's most respected economic forecasting firms, the London-based Economist Intelligence Unit, ranked Cuba as virtually the world's worst country business-wise. Only Iran and Angola ranked lower.
Dun & Bradstreet also rates Cuba among the world's worst, right below Belarus. Moody's rating is off the bottom of the chart as "very poor." Standard & Poors refuses even to rate Cuba, regarding the economic figures released by the regime as utterly bogus.
The whole article is here
What's our oil doing under Cuba anyway?
Massive Oil Deposit Could Increase US reserves by 10x
America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant.
In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel.
It was not until 2007, when EOG Resources of Texas started a frenzy when they drilled a single well in Parshal N.D. that is expected to yield 700,000 barrels of oil that real excitement and money started to flow in North Dakota. Marathon Oil is investing $1.5 billion and drilling 300 new wells in what is expected to be one of the greatest booms in Oil discovery since Oil was discovered in Saudi Arabia in 1938.
The US imported about 14 million barrels of Oil per day in 2007 , which means US consumers sent about $340 Billion Dollars over seas building palaces in Dubai and propping up unfriendly regimes around the World, if 200 billion barrels of oil at $90 a barrel are recovered in the high plains the added wealth to the US economy would be $18 Trillion Dollars which would go a long way in stabilizing the US trade deficit and could cut the cost of oil in half in the long run.
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".... up to 400 billion barrels of light, sweet crude oil for America’s future can be pumped from under Manitoba and North Dakota. That’s more oil than Saudi Arabia and Russia put together."
"This high-quality oil isn’t controlled by Moslem zealots, or hidden under a federal wildlife refuge. Moreover, it can now be cost-effectively retrieved with computer-directed horizontal oil wells, probably at $20 to $40 per barrel."
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A doubling of oil recovery efficiency worldwide is possible through effective use of technology and wise management, according to former head of reservoir management at Saudi Aramco.
Global cumulative production is 1 trillion bbl from a conventional resource of 7-8 trillion bbl, noted Nansen Saleri, president and chief executive officer of Quantum Reservoir Impact. With unconventional hydrocarbons, the total resource is 14-17 trillion bbl.
"We have a lot more trillions to go," Nansen told the RMI Oilfield Breakfast Forum in Houston Nov. 1
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Canada has an estimated 1.6 trillion barrels of oil on its territory, much of it locked in tough-to-excavate tar sands in the province of Alberta. By comparison, oil-rich Saudi Arabia has an estimated 270 billion barrels left. It isn't even close.
Yet, according to the Financial Times of London, Canada's government recently sent U.S. Defense Secretary Robert Gates a letter of warning that it might not be able to sell the U.S. any of its oil, which the Pentagon desperately needs for national defense.
For that, you can thank the Energy Independence and Security Act of 2007, passed with great gusto and self-righteousness by the Democratic Congress.
Under Section 526 of that law, tar sands are considered to be an alternative fuel. But the law requires oil sold to the U.S. government and produced from alternative sources to emit fewer greenhouse gases than oil produced from conventional crude sources.
That's a big problem.
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Another day, another oil company fleeing the country. No, this isn't Ecuador, the banana republic that just defaulted on its debt after chasing out investors. It's the United States, and what we're seeing is self-defense.
Much political hay has been made in Congress about "unpatriotic" corporations that move operations abroad. Weatherford International is the latest, taking its headquarters from Houston to Switzerland. The oil services company said that it wants to be closer to its markets. But what it really meant was that it no longer saw the future in the U.S.
In a political atmosphere of blaming corporations, it's no wonder. Halliburton fled to Dubai in 2007. Tyco International, Foster Wheeler and Transocean International all went to Switzerland. As a pattern emerges, America's global standing diminishes, in part because it's based on the willingness of companies to invest. It's an especially bad sign when domestic companies flee.
"The U.S. is an important market," Weatherford CEO Bernard J. Duroc-Danner told the Houston Chronicle Thursday. But, "it's just a market. It's not the primary market."
How does that sound for a loss of global leadership? If that's not clear enough, try this: "In the hierarchical pecking order, (Houston's) not going to be Rome anymore."
What accounts for this vote of no confidence in the U.S.?
Start with the demonization of oil companies. Executives have been hauled before Congressional star chambers, held up to abuse and ridicule, and then blamed for high oil prices as if they wanted to kill their markets. Rising global demand, nationalizations and Congress' failure to open the country to drilling go ignored.
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We've done the Bakken thing - it's horseshit.
Natural gas can fuel a new generation of automobiles that would help us achieve energy independence and at the same time contribute to a cleaner planet.
In the northeastern U.S., there is a massive expanse of porous rock called the Marcellus Shale Formation. It covers 54,000 square miles and stretches from southern New York to West Virginia. In the pores of this formation is trapped a huge quantity of natural gas. A nearby formation of Devonian shale is even more porous, with more trapped gas per volume of rock.
Penn State geologist Terry Engelder estimates that these formations could supply the nation's natural gas needs for 14 years. Advanced drilling techniques that shatter the 400-million-year-old rock and release the gas from its stone prison now make it more practical and economical to extract.
Covering parts of Colorado, Utah and Wyoming, the Green River Formation is home to the world's largest known oil shale deposits. A report from the Department of Energy's Argonne National Laboratory states that "even a moderate estimate of 800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia."
With current U.S. demand for petroleum products at about 20 million barrels per day, says the Argonne report, "oil shale could be used to meet a quarter of that demand, the estimated 800 billion barrels of (currently) recoverable oil from the Green River Formation could last for more than 400 years."
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Microorganisms That Convert Hydrocarbons To Natural Gas
The researchers found that the groundbreaking process—known as anaerobic hydrocarbon metabolism—can be used to stimulate methane gas production from older, more mature oil reservoirs like those in Oklahoma.
The OU researchers found that they can use their organisms to convert hydrocarbons in oil reservoirs to natural gas. “Because two-thirds of U.S. oil is still in place, we can use these organisms to convert residual hydrocarbons into natural gas and create a new source of domestic energy. The concept of anaerobic metabolism is an innovative process and the OU initiative is the only one of its kind in the United States at the present time. We are also experimenting with shales and other unconventional reservoirs.”
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"Most coal today is used for electricity but the governor’s plan is to turn Montana’s billions of tons of untapped coal into a liquid diesel fuel for our cars."
"Schweitzer wants to take coal that’s been pressurized into a gas, and then use something called the Fischer-Tropsch process to convert that gas into a clean diesel fuel, similar to what is made at a demonstration plant in Oklahoma."
"We can produce this fuel for about $1 a gallon... ," he said."
Watch the videos
We've done the Bakken thing - it's horseshit.
The Bakken field is not "horseshit", it's about technology. As this line from a Bloomberg story suggests, the amount of recoverable oil has been increasing exponentially:
In 1995, the U.S. Geological Survey said it expected to recover only 151 million of the Bakken’s billions of barrels, using then-available technology. This month, however, USGS announced the Bakken could now yield 28 times that much oil, up to 4.3 billion barrels ...
New technology and drilling techniques and well as the use of microorganisms will continue to increase the yield. A technique like this one could mean that Bakken's potential could be realized.
"The best way to help Cubans is to trade with them"
If we could -- you see, we can't trade with Cubans, we can only trade with the Castro brothers. The Cubans only get a few scraps left after they have divvied up the loot amongst their friends and lackeys.
Dr. Perry, I read your piece on "Cap and Trade" in IBD. My question is, who is going to sell the solar industry greenhouse gas offsets?
Looks like they're going to need them.
Mr. "Optimistic Anonymous,"
Technology will need to be improved before Bakken becomes a heavy contributor. August production (the last month I could find during December) was 166,000 barrels per day. Historical oil production from the Bakken has been marginal due to difficult geological challenges.
I'm on your side; there's plenty of oil and natural gas left to be found, and I've listed some impressive oil finds myself. The future is bright. The purpose of the comment is to state what needs to be accomplished.
Thanks Anon. for the great information.
Mr. "Optimistic Anonymous (again),"
Touching up on the Cuba embargo…
Much of what the U.S. exports to Cuba is food and medical supplies. This is good gesture has been practiced with other communist regimes - the Soviet Union in the past, and North Korea today. Without gregarious aid, communist regimes are incapable of feeding themselves.
Fidel Castro is a dictator and deserves to be tried for human rights violations. That being said, Cuba would benefit immensely from trade. The American-Chinese trade partnership works great; the two nations long ago opened trade dialogue, despite China’s reprehensible human rights record. This a country that experienced the Cultural Revolution, a nation that witnessed tens of millions of its people die.
Today, China is a developing power with a burgeoning middle class. While China regrettably remains communist, and extensive improvements in personal freedom and liberty deserve distribution, no one can dispute China’s increasingly prosperous middle class has benefited - in comfort, in wealth, and with increased freedom.
Let the trade dialogue with Cuba begin (and let’s gain access to the oil).
"Dave - the real reason is because the oil in the gulf is much more expensive to drill than the oil in the Middle East/Venezuela, etc. We'll let those poor countries exhaust their supply of oil while it's cheap, then when there's profit to be made we will start going after our own oil in earnest. Then after that, there's oil shale."
I hate to break the news but American production peaked in 1970 and all cheap sources of American oil have already been developed. While you could try to get oil out of shale the prospects are not very good because the energy needed to be invested in the production process would be about as much or more than what would be provided by the product. Using current technology oil shale development of any significance is just a fantasy.
As for Cuba's oil, it may or not be in place. The only way to know is to look at the results once they are released by the Cubans and their Chinese partners.
If we are lucky we could see some oil be developed from real Cuban reserves over the next few years but it will probably be a long time before the comrades in the Obama administration and Congress start to act responsibly. That means that American oil, if any, from the area is likely to start flowing at a much later date.
> While you could try to get oil out of shale the prospects are not very good because the energy needed to be invested in the production process
Vangel, that was true into the 80s, the tech has massively developed since then. The biggest issues with current matters is more a question of water resources.
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