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Heavy Oil as the Key to U.S. Energy Security |
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Compiled by
E. Hunter Herron, Ph.D. (Petroleum Equities Inc.)
Stuart D. King (Potomac-Severn Group LLC)
December 2004 |
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The long-term security of the United States is at present linked to the Middle East
being the world’s principal source of oil. However, a major untapped energy resource, which can provide
the U.S. with significant secure supplies of petroleum fuels, can be developed much sooner than other
unconventional sources of energy. |
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Increasing U.S. Dependency on Foreign Crude Oil
Over the past five years, studies of global oil production have
consistently predicted that diminishing discoveries of conventional crude oil will cause worldwide oil
production to peak and irreversibly decline by the end of the present decade.[1],
[2], [3], [4], [5] But
heavy hydrocarbons still remain as a largely untapped petroleum resource — heavy crude oil
and natural bitumen (also called “tar sands” or “oil sands”) exist in abundance. |
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While only one trillion barrels of the world’s original reserves of conventional crude oil remain to be
produced (with only 22 billion barrels left in the U.S.),[6]
resources of heavy oil and bitumen total more than five trillion barrels, 80 percent of which are in
Canada, Venezuela, and the U.S. (Figure 1).[7], [8]
If half the heavy oil and bitumen deposits in the U.S. and Canada are brought to market, they would alone satisfy the current
demand for crude oil in both countries for more than 150 years.
Except for Alaska’s Prudhoe Bay Field,
there have been no major U.S. oil discoveries in over 40 years. Foreign imports now account for 60 percent
of U.S. oil supplies, and only one-third of the oil consumed in the U.S. still comes from domestic
reservoirs (Figure 2).[9]
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Figure 1. Distribution of remaining crude oil
reserves versus untapped heavy hydrocarbon deposits. |
Remaining U.S. reserves of conventional crude oil total only 22 billion barrels, but deposits of
heavy oil and natural bitumen total more than 140 billion barrels. As shown in Table 1, the largest
domestic deposits of these heavy hydrocarbons are in Alaska, Utah, and California.
Significant deposits also exist in Alabama, Kentucky, Missouri, and
Texas.[10],[11]
Heavy Oil in Alaska
Remaining conventional oil reserves in Alaska are presently booked at 4 billion barrels, and
anticipated recoverable reserves from the Alaska National Wildlife Reserve (ANWR) are
expected to total another 3 to 4 billion barrels. But
Alaskan resources of heavy hydrocarbons in a single field — the Kuparuk River deposits — total
19 billion barrels, or five times the expected reserves within ANWR. In addition, a large part of the Kuparuk
formation lies close to both the Prudhoe Bay oil fields and the Alyeska (trans-Alaska) oil pipeline, making
for easy transport with essentially no further environmental impact. |
Figure 2. Current distribution of U.S. oil supplies. |
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Heavy Oil in Utah
Natural bitumen reservoirs account for almost all the heavy hydrocarbon resources in Utah. Multiple
reservoirs in the Tar Sand Triangle deposit are estimated to contain more than 22 billion barrels of
bitumen.
Total bitumen deposits in Utah exceed 32 billion barrels, none of which are being commercially developed
at present.
Heavy Oil in California
Heavy oil was discovered in California before the turn
of the previous century and currently comprises about half of the state’s crude
oil production. With this production spread among more than 200 reservoirs,
significant infrastructure to access heavy oil is already in place.
However, using existing technology less than nine billion barrels of heavy oil have been produced
from an original total resource of 77 billion barrels, so a significant incentive
exists to develop improved methods of recovering heavy oil. New technology for producing heavy
oil is summarized in the Petroleum Equities reports “Heavy Oil: A Solution to
Dwindling Domestic Oil Supplies” and “Underground Refining Converts
Heavy Hydrocarbons to Synthetic Crude Oil.”
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Table 1
U.S. Deposits of Heavy Oil and Bitumen
millions of barrels
| State |
Heavy
Oil |
Natural
Bitumen |
Total
Resources |
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| Alabama |
140 |
6,260 |
6,400 |
| Alaska |
- |
19,000 |
19,000 |
| California |
62,850 |
5,340 |
68,190 |
| Kentucky |
- |
4,300 |
4,300 |
| Missouri |
10 |
2,070 |
2,080 |
| Texas |
1,840 |
5,440 |
7,280 |
| Utah |
60 |
32,330 |
32,390 |
| Other States |
3,430 |
2,230 |
5,660 |
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| Totals |
68,330 |
76,970 |
145,300 |
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References
1.
Campbell, C.J.: "Depletion Patterns Show Change Due for Production of
Conventional Oil," Oil & Gas Journal, December 29, 1997.
2.
Campbell, C.J.: "Running Out of Gas: This Time the Wolf is Coming," The
National Interest, Spring 1998.
3.
Laherrere, J.H.: "World Oil Supply — What goes up must come down, but when will
it peak?," Oil & Gas Journal, February 1, 1999.
4.
Deffeyes, K.S.: Hubbert’s Peak: The Impending World Oil Shortage, Princeton University
Press, 2001.
5. Oil
& Gas Journal: "Analysts Claim
Early Peak in World Oil Production," August 26, 2002.
6. International
Petroleum Encyclopedia, PennWell
Corporation, 2002.
7.
Meyer, R.F. and C.J. Schenk: "An Estimate of World Resources of Heavy
Crude Oil and Natural Bitumen," Proceedings of the Third UNITAR/UNDP
International Conference of HC&TS, Alberta Oil Sands Technology and Research
Authority, July 1988.
8.
Meyer, R.F. and W. deWitt Jr.: "Definition and World Resources of Natural
Bitumens," U.S. Geological Survey Bulletin, 1990.
9.
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/petroleum_supply_annual/
psa_volume1/current/pdf/table_03.pdf
10.
U.S. Energy Information Agency: U.S. Heavy Oil Database (USHVYOIL), May 28, 1998.
11.
U.S. Energy Information Agency: U.S. Tar Sands Database (USTS), May 28, 1998.
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