New Oil Field in Gulf May Yield Billions of Barrels - New York Times

New Oil Field in Gulf May Yield Billions of Barrels - New York Times:

Many years ago, in 1979 I think, I was at Stanford and attended a lecture by Edward Teller, the famed H-Bomb physicist. His lecture, like his personality, was wide-ranging and eclectic.

One point that I remember he made concerning the availability of petroleum in the world (Remember, we had just come through the gas crisis a few years earlier.). He said there was an abundance of oil in the ground, much of it deeper than was technically or economically feasible to extract with '70s technology. Someday people would find and get this oil, he said, expressing little concern for the supply for the next 150 years, or so.

Seems he may have been right given today's announcement of the find in the Gulf of Mexico. Imagine drilling holes from ships deeper than Mount Everest is high! Here's an update from a a new article in Business Week that gives some realistic basic information about drilling deep. The author surmises that 'Peak Oil' theory may be incorrect. Read it.

Some will argue this is not good news because they would prefer that we wean ourselves off oil for a host of reasons. I'm glad they found it and that it's under U.S. control and that it's light and sweet.

Naysayers will probably argue that we should leave it there as a 'strategic reserve' for future generations.

For every billion barrels that can be extracted from this new field, we gain a couple of months supply, assuming we import nothing, at today's U.S. consumption rates (~21 million bbls/day). If billions of barrels truly are available, the U.S. petroleum import equation could be altered dramatically, particularly if the momentum increases for reduced foreign dependence on energy supplies.

"It will take more than a year of drilling to confirm the value of the find, and the depth of the water will make extraction extremely expensive — profitable only if oil prices remain at least $40 a barrel, according to oil industry analysts."(NY Times)

My cynical side says the timing of the discovery's announcement was keyed to the 2006 Congressional elections.

While the Democrats run their negative campaign against Wal-Mart, the Republicans can crow about the value of American business and their contributions to the health of our economy.

"Chevron said the well, known as Jack #2, and located 270 miles southwest of New Orleans, produced a Â?sustained flow rate of more than 6,000 barrels of crude oil per dayÂ? in a production test. The company said it found the oil producing formation about 20,000 feet below the bottom of the Gulf, with the well drilled to a total depth of 28,175 feet."