Do These 5 Locations Hold the Keys to American Energy Independence?

As the crisis in Syria reaches the boiling point, sending oil higher, it's time to rethink America's energy independence. It's estimated that 30% of the country's undiscovered oil and gas reserves lie within federal lands that are currently unavailable to oil and gas drillers. It's quite possible that there is even more oil than that just waiting to be discovered.

New technologies such as horizontal drilling, when combined with hydraulic fracturing, have unlocked shale oil reserves such as the Bakken and the Eagle Ford Shale. Top Bakken driller Continental Resources (NYSE: CLR  ) believes there are more than 24 billion barrels of recoverable crude oil equivalent in the Bakken, which, because of the oil-heavy nature of the formation, could double current proven oil reserves. Meanwhile, the discoverer of the Eagle Ford, EOG Resources (NYSE: EOG  ) , believes that it alone can recover 8% of the estimated 26.4 billion barrels of oil equivalent in place. These two massive oil discoveries have brought U.S. oil production to a 24-year high.

But it's not enough. The oil fields of yesteryear are declining even as companies such as ConocoPhillips (NYSE: COP  ) are investing billions just to mitigate base decline in places like Alaska's North Slope. To reach energy independence, America needs to open up new areas to drilling.

The slideshow that follows overviews what we know about the five areas that are currently off limits to drilling but could hold the keys to our energy independence. One of the locations alone is believed to have the potential to displace the entire 1.35 million barrels of oil per day that the U.S. imports from Saudi Arabia. If unleashed, it represents OPEC's worst nightmare.

It's going to take more than one oil discovery or one company to bring about American energy independence. However, an exclusive, brand-new Motley Fool report reveals one company whose breakthrough technology really is becoming OPEC's Worst Nightmare. Just click here to uncover the name of this industry-leading stock, and join our nation's quest for energy independence and your chance at landslide profits.


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  • Report this Comment On September 01, 2013, at 10:13 PM, Mittyc wrote:

    Energy independence? Such hogwash! Get educated of the facts first before spouting such nonsense. I suggest you folks first read the 2013 BP World Energy Report and the 2013 EIA Shale Report . Get informed. Ignorance is no bliss.

    Here are the facts: The US consumes 18.6 million barrels a day of oil. The best the US has produced so far is 8.5 mbd of conventional oil and 1.5 mbd of the much-hyped shale oil ( after drilling 9000 wells last year just to keep investors happy with production rates!) . So the US still needs to import 8.5 mbd ! 4th grade arithmetic, not rocket science!

    Also, the US has only 93 billion of barrels of oil reserves ( 35 conventional + 58 shale). Once again, applying 4 th arithmetic skills , we get a mere 13.7 years of US " oil independence " with a 18.6 mbd consumption! So, either get informed of these simple facts or stop fooling the uninformed masses out there of the BS " energy independence" that you folks have the dare to post. The question is : who is paying you for this diatribe?

  • Report this Comment On September 02, 2013, at 8:01 AM, TMFmd19 wrote:

    Actually, North American energy independence is less hogwash than you might think. For example, it is thought that the U.S. could overtake Saudi Arabia as the largest oil producer by 2017 and according to reports by the IEA we could be energy independent.

    Read this letter by Continental's CEO: http://newsok.com/harold-hamm-energy-independence-courtesy-o...

    Further, new sources of oil are being unlocked by horizontal drilling, particularly in the Permian Basin of Texas, which could hold the world's second largest oil field. Below the Bakken in ND is the Three Forks formation, which could hold just as much if not more oil than the Bakken.

    All this while U.S. consumption is heading lower, and will continue to head lower as CAFE standards double by 2025 and natural gas displaces gasoline in trucks, buses and electric slowly moves the needle on cars.

    With the right policies in place, energy independence is much more than just a dream.

    Matt

  • Report this Comment On September 03, 2013, at 3:53 PM, Mittyc wrote:

    Don't believe everything that starts with "it is thought" or everything written by somebody who has a vested interest in keeping the myth alive! There is a lot of money being invested chasing these dreams and it is in the interest of those perpetuating it to keep the lie alive. As I've said, get the facts yourself, do the simple math and draw your own conclusions. I would strongly recommend reading the US Energy Information Administration's (EIA) June 2013 World Shale Oil and Gas report. It is globally acknowledged as being the authority on shale assessments. You will see that the total world shale oil reserves are estimated to be only 345 billion obarrels, of which the US has 58 billion, including Texas, Baaken and the lot. At the US consumption rate of 18.6 million barrels A DAY, we will exhaust the 58 billion barrels of shale oil in a mere 8.2 years, even if can do the impossible of extracting 18.6 millions barrels a day. Yes, it is pure hogwash! Take out that calculator and do the math!

    And overtaking Saudi Arabia is a meaningless measure too. Today Saudi leads at 10.6 million barrels a day, Russia is a close second at 10.2 and the US with 7.5 of conventional and 1.5 of shale oil at best. Is about 10 million. So overtaking S. Arabia is no big deal and means absolutely nothing because we still have to import 8.5 million barrels A DAY to meet our needs. I suggest you also read the 2013 BP World Oil Report for such detail. It's only 120 pages long but very reader-friendly to digest.

    The bottom line, the world has 2014 billion barrels of conventional and shale oil left, the world consumes at the rate of 86.7 million barrels a day. Breaking out that calculator , you will compute that the wold has just 61 years of oil supply left. To challenge this, you need to produce specific alternate numbers, not just arm- waving and hyperbole !

    Cheers

  • Report this Comment On September 05, 2013, at 11:23 AM, Mittyc wrote:

    •The survival of the human race lies precariously in the balance of its energy dependence. Facts and figures are what matter, not hype and innuendo by those with political and financial interests/agendas.

    •The latest credible estimates put the world’s oil reserves, both conventional and shale, at 2014 billion barrels. At a world consumption rate of 89.8 million barrels a day, this provides only 61 years of supply before it all runs out. Within the lifetime of today’s young generation!

    •That is if all countries in the world share their resources equitably across the globe, politics aside. Otherwise many countries will go under much sooner.

    •Cataclysmic Hollywood and Mel Gibson’s Mad Max may become reality after all!

    •Any further increase in consumption hereafter will erode these 61 years even further. China and India growth are big unknowns, China is already at 10.2 million barrels per day, while the Western world consumption is relatively stable.

    •Germany, France and Japan have zero oil or gas resources, are 100% dependent on imports, the most vulnerable in the world. Italy is also very marginal.

    •The much-touted North Sea Oil is a mere 4.4 billion barrels in reserves, less than 1% of the 1669 billion barrel world reserves.

    •46% of Western Europe’s daily import of 12.5 million barrels comes from Russia, 18% from the Middle East. Very dependent.

    •Russia and Canada have abundant resources, can survive without exporting, can outlive the rest of the world (if allowed to!). See green & pink color codes.

    •The Middle East/Persian Gulf too have abundant reserves but, to a lesser extent with Iran, they have to sell to survive so they too are inexorably tied to the 61 year survival of the rest of the world. Oil and gas is the only source of revenue for most of these countries.

    •IF all the excess natural gas can be successfully converted into oil, the world oil reserves increase to 2796 billion barrels and world oil life increases to 85 years. However, there are many technology and economic uncertainties pertaining to gas-to-oil conversion (GTL), discussed on the next page.

    •The bottom line - the world will be in dire straits in a time period that is not much longer than when many my age left high school 52 years ago! A very short period in the timeline of human existence. A very sobering thought indeed.

  • Report this Comment On September 05, 2013, at 11:36 AM, Mittyc wrote:

    •The world’s natural gas situation is certainly more hopeful. Unfortunately, it is not an easy panacea for the world’s transportation needs, the primary reason for the world’s impending oil supply crises.

    •The latest shale gas estimates have virtually doubled the world natural gas reserve estimates to 14,138 trillion cubic feet (tcf).

    •However, contrary to the popular hype and political gamesmanship, extracting shale gas and shale oil from the pores of porous shale rock is not as simple as pumping liquid oil from an underground pool of oil. Very few countries in the world have the resources or the technical know-how to do this. At the moment shale extraction is a virtual monopoly of US companies.

    •Shale energy extraction also comes with considerable baggage – requires a lot of water at high pressures and temperature, chemicals used can contaminate the water table, high pressures can cause seismic disturbances. France and Netherlands have already banned shale extraction and others could follow. The US has the advantage of large uninhabited lands and abundant water. See shale graphics on last page.

    •With the current world consumption rate of 117 tcf, mainly for power plant generation, the world has 121 years of supply.

    •Gas-to-oil (GTL) conversion is technically feasible. However, the economic feasibility, affordability and efficiency of such conversions are a huge unknown and have hardly been put to the test. Plant and infrastructure do not exist in much of the world.

    •On the other hand, conversion of natural gas to Liquefied Petroleum Gas (LPG) is a well-established industry and is on the increase worldwide. Conversion of oil-powered vehicles/railway engines/ships etc. to LPG is also rapidly increasing worldwide.

    •However, there are also substantial costs involved worldwide in plant and equipment, distribution, transportation and delivery if LPG is to replace oil as a primary source of transportation energy.

    •All said, a complete substitute for oil is virtually impossible. At 33% of the world’s energy source, the problem of replacing oil is just too large to solve.

    •Without transportation (by land, air & water), civilization as we know it will cease to exist. The human race needs to go back to the likes of the 19th century if it is to survive! A sobering thought. While the Industrial Revolution has transformed this earth of a million plus years, it may also be the reason for its undoing.

    All the data quoted above are from he 2013 BP World Energy Report and the June 2013 EIA report on World Shale Oil and Gas. these can be Googled. I would strongly recommend that people get aware of the real facts for any meaningful discussion.

    About he US shale myth, it is a fact that a mind-boggling 9000 "fracking wells" were dug in just a year, needed to keep the production rates higfh enough to appease the investors. Shale wells are drying up at a much faster rate with yield at a low 30% only. And nobody dares mention what the real landed cost per barrel of shale oil is yet. So don't count those chickens too early! Cheers!

  • Report this Comment On September 05, 2013, at 11:41 AM, Mittyc wrote:

    •Of the 10.6 million barrels a day US Import in 2012, only 2.2 million (20%) came from the Persian Gulf/Middle East, ie. only 12% of the daily US need of 18.65 million barrels. Is the Middle East now of less significance to the US?

    •Europe and Asia depend far more on the Middle East. See numbers above.

    •All the recent hype about the US getting to be self-sufficient in oil is sheer nonsense by misleading politicians aiming to please a gullible public! All the shale oil efforts in this country have yielded only a rate of 1.5 million barrels a day in addition to the conventional oil extraction of 8.5 million a day. The US needs 18.5 a day and has to still import at least 8.5 more a day and will continue to do so!

    •A sizeable 73% of daily Middle East oil (14.4 of 19.7 million barrels) goes to Asia, the largest to Japan. 12 million barrels pass through the Straits of Malacca each day. No wonder the focus of the US and China navies in the region!

    •Also, most of the 19.7 million barrels a day export of Middle East oil has to pass through the Straits of Hormuz that Iran borders! Why Navies are critical the world over!

    •In the Total World Energy chart on the following page, fossil fuels dominate. Oil is 33%, Natural Gas is 23%, Coal is 29%, totaling 85% of world energy. It is obvious that the human race is slave to fossil fuel.

    •All of the earth’s fossil wealth took millions of years to generate, it is a finite resource that will take as much time to replenish. The world has consumed about half of its oil wealth in the last 100 years and will exhaust the rest of it in the next 61 years or less. That’s the simple truth!

    •Contrary to hype and common misconception, the other forms of non-fossil energy hardly make a dent. Renewables like solar, wind, tides, geothermal constitute less than 2%, mainly because of capacity and cost limitations. Hydro provides only 7%, and nuclear only 5%, the later marred by recent world disasters. The bad news is that you just cannot compete with fossil! And no amount of wishful thinking or arm-waving and sometimes downright lying is going to change that situation!

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