Editorial: Spinning oil potential

March 13, 2006
The US Department of Energy had an important message to tell about future oil supply, but communication got in the way.

The US Department of Energy had an important message to tell about future oil supply, but communication got in the way.

On Mar. 3 DOE issued a news release with the headline “New CO2 Enhanced Recovery Technology Could Greatly Boost US Oil.” The first paragraph refers to studies finding that, through “state-of-the-art” enhanced oil recovery, “89 billion bbl or more could eventually be added to the current US proven reserves of 21.4 billion bbl.” The next paragraph quotes Energy Sec. Samuel W. Bodman hailing CO2 sequestration-injection of the greenhouse gas into subsurface reservoirs for both storage and EOR.

The strong impression is that CO2 injection and sequestration might quadruple oil reserves. The release even calculates where US reserves would rank worldwide if that occurred. It further reports that “multiple advances in technology and widespread sequestration of industrial carbon dioxide could eventually add as much as 430 billion new barrels to the technically recoverable resource” and fits that number into the reserves comparison, too.

It’s spin

In Washington, DC, they call this spin: communication engineered for strategic purpose. Future oil production fights global warming! Spin can’t get much better than that. Trouble is, this spin trivializes a serious point: that the US still has great potential to produce oil and the technology to do it. Neither that message nor the promise of CO2 injection will receive any quarrels here. But 430 billion bbl?

The numbers need to be decoded. Both are estimates of technically recoverable resources. They apply no economic or time constraints. The 89 billion bbl figure is an assessment of potential contributions from future CO2 EOR technologies. Contrary to the news release, eventual reserves additions from application of these technologies to the amenable resource will be considerably less.

The 430 billion bbl resource estimate reflects technically possible future recovery from discovered oil, undiscovered oil, reserves growth, the “residual oil zone,” and tar sands. Residual oil is what remains in a reservoir below the oil-water contact. DOE says EOR might produce 20 billion bbl of it. It ascribes a total of 240 of the technically recoverable resource to EOR in all categories. And it adds a combined 190 billion bbl from primary and secondary recovery of volumes as yet undiscovered and those added by reserves growth.

These are very speculative numbers. They are exploratory and technological targets extrapolated from estimates of oil remaining in place, including categories of oil not yet found. Adding quantities like these to reserves estimates yields sums overburdened with uncertainty. That DOE’s press release yielded to the temptation to do the arithmetic is no scandal. But it does nothing for credibility of the numbers. That’s regrettable. The studies released by DOE are good enough, and their message important enough, not to need the hype.

The distortion almost certainly happened because of an unfortunate tendency of the administration of President George W. Bush to cheerlead specific energy sources. First it was hydrogen as a vehicle fuel. Then, in the state of the union address in January, it was cellulosic ethanol. Now it’s CO2 EOR plus sequestration. Appealing as all these energy options may be, none of them yet makes economic sense, except in special cases, without government help.

Is it the expectation that taxpayers will support every energy option that the federal government comes to like? If so, why? A growing market in which prices of traditional energy are rising will reward competitive newcomers in due course and at no cost to taxpayers. And it will make better choices than the government can.

Enlightening assessments

Stripped of the spin, the DOE reports are encouraging assessments of US oil potential. And the CO2 assessment usefully observes, “Achieving these higher oil recovery efficiencies would provide tremendous benefits to the domestic economy and for consumers.”

Too frequently these days, ground-level economic benefits get lost in discussions of domestic oil and gas production. DOE deserves credit for including them. In fact, prominent mention of the economic benefits of domestic production and suppression of the sequestration hoopla would have done wonders for an unfortunately perplexing publicity effort.