Last week I asked readers to try a little thought experiment and “imagine that America has oil reserves greater than Saudi Arabia.”
For some of readers, that was just too much. I was assured that America has reserves of 19.2 billion barrels, and even allowing for the additional 4 billion that I’d discovered in my link, it was only a nine-month supply for America.
I guess I forgot to mention the oil shale. The Bureau of Land Management has control of 70 percent of the oil shale lands in America. Here’s what they say about the reserves:
While oil shale is found in many places worldwide, by far the largest deposits in the world are found in the United States in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of the oil resource in place within the Green River Formation range from 1.2 to 1.8 trillion barrels. Not all resources in place are recoverable; however, even a moderate estimate of 800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day. If oil shale could be used to meet a quarter of that demand, the estimated 800 billion barrels of recoverable oil from the Green River Formation would last for more than 400 years.
More than 70% of the total oil shale acreage in the Green River Formation, including the richest and thickest oil shale deposits, is under federally owned and managed lands. Thus, the federal government directly controls access to the most commercially attractive portions of the oil shale resource base.
Shell Oil thinks it can do this and make a profit at $30 per barrel. So let’s do the math. World oil price hovers around $90 a barrel, due to the Federal Reserve inflating our currency and making dollars worth less. Let’s be safe and say Shell’s estimate is optimistic, and it really needs $50 a barrel to extract and make a profit for shareholders.
I suggested last week that we limit the oil sold to the U.S. and sell it at a 20 percent discount to restore our economy. This gives us a sales discount of $90 x 0.20 =$18 per barrel, for a U.S. market price of $72. Shell and its competitors get $30 to $50, depending on costs. The Bureau of Land Management gets $22 to $42.
The BLM’s article suggests we could produce 25 percent of our daily demand of about 20 million barrels; that would be 5 million barrels daily.
The U.S. Treasury recovers between $22 x 5,000,000 x 365 = $40,150,000,000 on the low end to $48 x 5,000,000 x 365 = $87,600,000,000 per year on the high end.
At that rate, it would take us only 50 to 100 years to pay off the debt incurred by Washington D.C.’s deep thinkers during the past two years. And the rest of us could have jobs and sell our houses.
Honestly, the Demopublicans and the Repocrats who represent the entrenched interests in America are making this way too easy for the tea party in 2012.