According to your columnist Neil Reynolds, “the U.S. Outer Continental Shelf holds 86 billion barrels of crude oil... enough to eliminate imports from OPEC countries for 159,259 days. (The U.S. imports 540,000 barrels of OPEC crude oil a day.)” (Why no offshore drilling on the U.S. shelf? 19 April 2010)
Mr. Reynolds’ argument is based upon a serious misreading of U.S. import data. According to the U.S. Energy Information Administration, the U.S. imported 4.5 million barrels of crude oil per day from OPEC in January 2010. Using January’s daily import numbers and the (simplistic) reserve-to-import calculation implies that the U.S. could eliminate OPEC imports for about 19,100 days or slightly over 52 years.
Another of the problems with Mr. Reynolds’ argument is that in order to replace OPEC imports, the U.S. would have to extract 4.5 million barrels per day from its offshore. Not an impossible task, but at its peak in 2003, the U.S. was only producing about 1.33 million barrels a day from the Gulf of Mexico.
What Mr. Reynolds fails to understand is that it is in the U.S.’s best interest to import as much oil as it can from other countries while leaving its own resources in place. By doing so, the U.S. is ensuring that when exporting countries begin to experience a decline in their production, it will have resources that can help meet its crude oil needs.
Which may explain why there is no offshore drilling on the U.S. shelf.
Published, Globe and Mail, 21 April 2010