The US could be economically self-sufficient in oil.

I concur with Pro’s assessment of utilization of petroleum.Proved ReservesI strenuously disagree with Pro’s initial statement that “Proved reserves are not a useful measure” for a couple of reasons:1. In economic geology of just about any given resource; reserves and resources are delimited with proven reserves being the primary “gold standard” for making economic decisions. As such it is impossible to have a discussion on this topic that does not include this delimiter unless one wishes to avoid the realities of how this type of analysis is done by the professionals. I once again refer Pro to the earlier cited document from the SPE.2. While I am not a petroleum geologist, I believe it is a mischaracterization of “proven reserves” to say it must be “drilled and oil flowing” as that does not appear to be part of the generally accepted requirements of establishing Proven Reserves. Once again I will refer Pro to the SPE document which contains the following definitions:“Proved Reserves are those quantities of petroleum which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, ...” (pg 43, ibid)While it is most preferable to have exploratory wells with at least well logging in which geophysical instrumentation is lowered into the hole to establish the presence of potentially producing formations, and even more preferable to have “fluid contact”, that is not the only way. The SPE document further goes on:“In the absence of data on fluid contacts, Proved quantities in a reservoir are limited by the lowest known hydrocarbon (LKH) as seen in a well penetration unless otherwise indicated by definitive geoscience, engineering, or performance data. Such definitive information may include pressure gradient analysis and seismic indicators. Seismic data alone may not be sufficient to define fluid contacts for Proved reserves”As such Pro’s suggestion that a proven reserve is a sort of after-the-factassessment is technically incorrect. Pro himself even acquiesces that seismic data is utilized. The key here is that exploration allows for non-production to develop a proven reserve and even understanding that lateral continuity of the formation from which the oil is produced will count toward evidence for proven reserves (Pg 28, ibid)Pro points out that “So-called "unconventional" sources of oil and oil equivalents are often omitted entirely from calculation of proved reserves” which is often true because they are not proven reserves. The technology necessary to produce these sources is still under development. It is outside of the range of this debate to include hypotheticals in the assessment of our ability to be self-sufficient in terms of oil. If we are to throw the doors open and include everything why not go for any and all “blue sky” scenarios? In point of fact the petroleum companies have largely ignored the unconventional sources in their estimates for a number of economic reasons for decades.The utilization of bituminous sources such as tar sands and oil shales are still an “unknown” generally speaking. This speaks directly to the 1.4 trillion barrels of oil estimated recoverable as noted in Pro’s Investor Business Daily article.A Rand Corporation study from 2005 “Oil Shale Development in the United States” (Bartis et al.) prepared for the US DOE National Energy Technology Laboratory points out some of the limitations in detail. One point that is clear is that this is still an unproven technology with limitations imposed by as yet to be developed economies and technologies. The Rand study states:“Oil shale has not been exploited in the United States because the energy industry, after some halting efforts, decided that developing oil shale was economically unviable. Over the past two decades, very little research and development effort has been directed at reducing the costs of surface retorting. For thermally conductive in-situ retorting, costs might be competitive with crude oil priced at less than $30 per barrel, but the technical viability of in-situ retorting will not be fully established for at least six years.”There aretwo means of extracting the oil from shale: in situ or surface retorting. Surface retorts have significant scale up issues:“Development of surface retorts that took place during the 1970s and 1980s produced mixed results. Technical viability has been demonstrated, but significant scale-up problems were encountered in building and designing commercial plants.” (ibid)As of the publication of this report Shell Oil was among the few to look into development of in situ methods which could be better overall but were still under development.Economic production at $100 per barrelPro discusses oil production economics and I have read similar values for the economic level of various forms from which the oil is developed. However Pro notes that production from oil shale is still in its infancy, which is a point brought home in the Rand report cited above. While this is very interesting and worthy of further research and development as it currently stands the oil shale route is still relatively theoretical. Including it at this early stage as a route to oil independence is theoretical at best.Why is production now low?Pro develops a case that oil production is currently up in the U.S. but that most of U.S. oil reserves are on Federal land keeping it from being produced. I must quibble with this. According to the Office of Natural Resources Revenue (Dept of the Interior) there are 1,991,352 acres of oil and gas producing leases currently on federal lands. Federal offshore leases include 445,297 additional acres, (1)Interestingly enough during the last 4 years of the Bush administration the production of oil from federal lands was only 634 million barrels while during only the first 3 years of the Obama administration the production has swelled to 676 million barrels (2) These numbers translate into 33% and 34% of the nation’s oil production respectively. So indeed there is significant amounts of production from Federal Lands and characterizing it as some hidden treasure would not seem to be the most appropriate view.Pro mentions the environmental regulations as being a prohibition on oil shale production is extremely important. For the U.S. to be self sustaining in terms of oil does these things should be taken into account.Oil Shale and tar sands production are water intensive processes and often located in regions where water is quite limited (western U.S.) or that have water supplies that are overtaxed and easily damaged. At least one estimate from the GAO states that the production of the oil shale in Colorado could require between 1 and 12 barrels of water per barrel of oil produced with an average of about 5 barrels. (3)These factor into our ability to “self-sustaining”. What good is our ability to produce our own oil if we have no water to drink? When it becomes a water vs oil battle, water will win. Always.Ultimately Pro relies on a number of possibilities without firm technological proof points. “It would take a decade to get the conventional oil sources into use. Oil shale would, if allowed, catch up as the technology is developed.”Clearly oil shale and other unconventional sources are fraught with questions and uncertainty. The current energy return on investment (EROI) for oil shale development is estimated to be 10 to 20 times less efficient than straight petroleum. And our reliance on “what if” scenarios while ignoring the very real downsides from this equation leave little reason to believe this is a viable option for America to be self sufficient in regards to our oil needs.SOURCES1. http://tinyurl.com...2. http://www.cjr.org...3. http://www.gao.gov...