New domestic oil field could provide billions of barrels
The New York Times reported that a group of companies led by Chevron announced that an oil field in the deepest regions of the Gulf of Mexico could potentially yield 6 billion barrels of oil.
Located just 270 miles southwest of New Orleans and 20,000 feet below the bottom of the Gulf, the oil well known as Jack #2 was able to sustain a flow rate of more than 6,000 barrels of crude per day.
J. Larry Nichols, chairman of Devon Energy Corporation which holds a 25 percent stake in the oil field, said it "could not have happened in a better place." At the same time, Chevron says, that "more than a half dozen world records for test equipment pressure, depth and duration in deep water were set during the Jack well test."
On news of those announcement, midday trading of crude oil fell to a 5-month low at $68.38 per barrel yesterday.
It's certainly a sign of relief for those weary of gas prices, however, the impact on the focus of alternative fuels remains to be seen.
[Source: New York Times]
Reader Comments (Page 1 of 1)
Howard Lee Harkness 8:30AM (9/06/2006)
This discovery, and the new cheaper methods for extracting oil from oil sand, may put off "peak oil" for a few years. Provided the reserve estimates are accurate, of course. The folks that have bet money (in the form of oil futures) on imminent peak oil may lose big.
This is not a particularly good thing. The "gloom and doom" forecasters will find it harder to get the message across in the face of declining price and expanding availability.
Regardless of how much there is, there are at least two problems with burning dinosaur juice for energy: 1) no matter how much there is, it will eventually run low enough to be uneconomical, and 2) we have already exceeded the upper historical norm for atmospheric CO2. We need to learn to use much less of the stuff.
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1985 Gripen 12:36PM (9/06/2006)
Production from this discovery might not begin until after 2010, so don't expect this discovery alone to drop oil prices.
http://www.msnbc.msn.com/id/14678206/
I see good things and bad things from this discovery:
Good: this should give some promising new alternative energy technologies (cellulosic ethanol, and bio-butanol are two which spring to mind) time to mature so that just as the prices for oil rise these technologies might be phased-in as there's a tipping point where they'll be cheaper than petro-diesel or gasoline
Bad: this means per-barrel oil prices may stay low longer, meaning that market-driven incentives for alternative fuels may not be there for much longer. Also, burning oil longer means more greenhouse gases.
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Charles S 2:00PM (9/06/2006)
Personally, I can't understand why people are so positive about how this will affect future oil prices.
Besides the obvious, people need to know that cost for deep sea drilling is very expensive. Location at the Gulf may be good from a geopolitical standpoint, but it also means it is vulnerable to storm damages. To fortified the infrastructure will cost more money, which would only make sense if oil prices will stay high.
While this new oil will come online in 2010, old fields, such as one in Mexico, will continue to decline. US continues to consume more oil EVERY year, and last July was the highest figure ever recorded in our history. By 2010, this "drop in the bucket" will maintain the status quo at best.
Right now, from what I can see, only a major economic slow down will bring down oil prices.
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Leroy Brown 3:47PM (9/06/2006)
I'm pretty sure 'peak oil' is aways off as is, and we'll continue finding oil sources like this for some time I think.
Eventually though, we need to come to terms with the fact that we use way too much oil, and the pollution is getting ridiculous, and will only get worse. I dread the day I have to give up my Navigator for a small car, but in some ways I look forward to it.
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loikll 5:23PM (9/06/2006)
*** I dread the day I have to give up my Navigator for a small car, but in some ways I look forward to it. ***
You're quite the environmentalist. Personally I don't give a crap about the environment (I enjoy making people faint by saying that), yet I drive a 40 mpg Honda. How ironic.
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carbonsink 1:28AM (9/07/2006)
"I'm pretty sure 'peak oil' is aways off as is, and we'll continue finding oil sources like this for some time I think"
Are you sure? A potential yield of 6 billion barrels in extremely deep water that might start producing around 2013. Hmmmm. The world consumes 30 billion barrels a year. The Saudis have reserves of ~250 billion barrels. This find will make precisely zero difference.
Perhaps you should examine this graph:
http://www.hubbertpeak.com/campbell/images/growingGapB.gif
Now do you think future oil discoveries will save us?
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MikeW 2:40PM (9/07/2006)
Isn't this right in Huricane alley?
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