Improved Oil Discovery Under the Sea--Expect More

The recent discovery of a huge new undersea oil reservoir in the Gulf of Mexico is causing more intelligent people to rethink the issue of "peak oil."

The well sustained a flow rate of about 6,000 barrels a day, strong enough to encourage analysts to predict that the field may contain anywhere from three billion to fifteen billion barrels of oil, although the results of a second well test scheduled for 2007 will sharpen the accuracy of those figures considerably. If the higher-end estimate is correct, though, the discovery would approach Prudhoe Bay in size, and possibly increase total U.S. reserves by some 50 percent.

Technology Review.

This huge undersea oil field was found by improved seismic techniques. But oil discovery science is not limited to seismic methods. A new generation of petroleum prospectors are learning to use these new techniques, which promise a new wave of oil discovery that could last for decades.

Other parts of the world that once appeared beyond the pale may also come into play. Areas believed to have oil deposits extremely deep beneath the ocean floor, which could now become commercially recoverable, include the North Sea off the coast of Britain, the Nile River Delta off the coast of Egypt, and possibly coastal Brazil, says Andrew Latham, a vice-president at energy consultancy Wood Mackenzie in Edinburgh, Scotland. Other analysts say West Africa could harbor lots of ultra-deep deposits. The areas have produced oil before but never from these depths.

Source.

Of course, these huge new oil fields will take time to develop. Much of the new oil reserves will probably lie undisturbed, like the ANWR oil fields in Alaska, due to lack of desperate need for it. Oil prices of $70 US per barrel are not economy busters by any means. Yet those prices are high enough to encourage development of renewable sources of energy, as well as novel uses for coal, and increased use of nuclear energy. The current price level also encourages oil companies to stretch their nets of oil discovery wider and deeper.

So, although the move away from petroleum and toward alternative fuels is real and probably irreversible, it is still in the early phase, and is not due to any hardship associated with the old "catastrophic peak oil" quasi-religious belief. It is basic economics combined with a desire by developed societies to move toward cleaner and ultimately more sustainable forms of energy.