Proved: Has at least a 90% probability that the all of the
claimed amount of oil can be recovered
Unproved: Has lower than 90% of certainty
Probable: 50% or higher degree of accuracy
Possible: 10% or higher degree of accuracy
On shore petroleum deposits:
66.5 BBO proven, 115.1 BBO unproven
Off shore petroleum deposits:
21.1 BBO proven, 48.5 BBO unproven
On Shore Petroleum Deposits
reserves mainly lie
in Southern California,
Texas, Alaska, and
Williston Basin in
Montana has largest
Alaska has largest overall supply of oil by far.
Accounts for 53% of total land oil
Off Shore Petroleum Deposits
The largest oil reserves
located in the Gulf of Mexico
Second largest located
in the shelf off Alaska
Majority of oil available is
located off-shore (73%)
In total (Both off shore and on shore)
Proven: 87.6 BBOs
Unproven: 163.6 BBOs
Since the majority of oil is located offshore, more focus
should be placed here.
In terms of on-shore reserves, Alaska has the highest
quantities of oil, but is located in sensitive regions
Important to remember that the quantities given only
account for the known deposits
Cost to taxpayers
Oil companies posting huge profits
Top Ten Corporate Quarterly Earnings of all Time
Place Company Year Quarter Dollars (USD)
1 Exxon Mobil Corp 2008 2 $11.68 billion
2 Exxon Mobil Corp 2007 4 $11.66 billion
3 Exxon Mobil Corp 2008 1 $10.89 billion
4 Exxon Mobil Corp 2005 4 $10.71 billion
5 Exxon Mobil Corp 2006 3 $10.49 billion
6 Exxon Mobil Corp 2006 2 $10.36 billion
7 Exxon Mobil Corp 2007 2 $10.26 billion
8 Exxon Mobil Corp 2006 4 $10.25 billion
9 Exxon Mobil Corp 2005 3 $9.92 billion
10 Exxon Mobil Corp 2007 3 $9.41 billion
Will it really happen?
If so, by how much?
More disposable income?
Current record unemployment
Lower dependence on foreign oil
Shrink trade deficit
Will alternative energy still be a priority with cheaper
gas or more abundant oil?
Too early to tell
Oil Spills - Sources
Natural Oil Seepage: 47.3%
Extraction/Drilling of Oil: 2.9%
Transportation by Tankers
– Accidental Spills: 9.8%
– Normal Operations: 24.1%
– Air Pollution: 4.2%
– Runoff From Land Sources: 11%
– Jettisoned Fuel: 0.6%
Oil Spills – Historical Evidences
Santa Barbara’s 1969 Oil Spill
200,000 gallons of oil spilled in
It took 12 days to control the
Oil Spills – Historical Evidences
Exxon Valdez, 1989 oil spill
11,000,000 gallons of oil spilled in the ocean.
It took weeks to clean up.
Marine and Wildlife
Suffocates Plants and Animals
Clogs the blowholes of the dolphins.
Kills vegetations that marine animals live on.
Suppresses The Health of Marine and Wildlife
Ingestion and inhalation of oil harms marine life.
Effects on breeding, growth, and the toxin can cause cancer
and other illnesses.
Effects on Scenery
Offshore drilling “will threaten to shut down our favorite beaches
with oil spills, pollution, and invasive infrastructure.”
Protect Our Coasts
Miles away from the beaches
Onshore pipelines could be
Regulation and Enforcement
Stricter requirement on technology.
Enforcement of better emergency
Long term benefit.
Can help with global warming.
Oiled Wildlife Care
Provide better care for oiled wildlife.
Obama – What Could Be
• Supports a government
regulated system for oil
• Very limited offshore drilling.
• Highly affected by public
opinion, originally not
interested in offshore drilling.
• Supporter to alternative fuels.
• Doesn’t feel it is a complete
McCain – What Could Have Been
• Supported offshore drilling from
• Less inclined for total
government regulation of
• Feels it will be an immediate, but
impermanent cure to the oil price
• Definitely follows the
Lower oil prices
are on the mind.
oil prices were
• Wants a quick solution to the oil
• Recent polls suggest that the
public is in support offshore
• The majority is only slightly
bigger than the minority on this
• People tend to support the idea
of alternative energies, but there
is still a large group of people
who feel it is not a viable option
at this point in time.
Oil Drilling Regulations
Ensure protection of the Increases time and cost
public and environment of production
Mediates barrel pricing Puts a constraint on free
Enforces adherence to market policy
proper maintenance and Limits access to domestic
May raise cost of gas at
BP Texas Bay Explosion
On March 23, 2005 a Texas
City Refinery exploded
15 lives were lost and over
180 were injured
Could have been avoided
had work order been
executed on time
People died because
control trailers were too
Lake Erie Polluted
Roughly 51 oil spills
occurred in the Canadian
territory of Lake Erie
between 1997 and 2001
Amount and duration of
spills remain undisclosed
by Canadian Government
Techniques for drilling
were still too dangerous for
As a result, oil drilling was
banned in the U.S. parts of
the great lakes
Will Alaska be Next?
BP has already been charged with spilling over
200,000 tonnes of petroleum in Alaska through
Should they or others be allowed to tap into the oil
rich wild reserve known as the Artic National
Wildlife Refuge (ANWR)?
How about Market Control?
Exxon Mobil posted a
record $40 billion profit in
Exxon Valdez spill in 1989
required $4.5 billion
settlement from Exxon
Exxon refused to pay
saying that the $3.5 billion
clean up was sufficient and
that they couldn’t afford to
What should be done?
From the examples of
leading oil companies,
they cannot be trusted
to keep themselves
needs regulations with
strict watchdogs to
Yes, domestic drilling can lead to an economic
Yet at what cost is the U.S. willing to pay for this?
How can the people keep the oil companies in
Regulations are a must
Technology of Oil Drilling
Technology of Oil Drilling
A rough, dirty, and risky job
Basic technology of an Oil
Many connections of pipe
and a drill bit for digging
Everything is really
dependent on pressure from
“mud” going down the pipes
The only indicators on an oil
rig are really just pressure
The biggest influence on the safety standards in the
United States for oil drilling onshore and especially
offshore was the Santa Barbara Oil Spill
On January 29, 1969, a Union Oil Co. started spilling
out gallons of crude oil from a the 3500 feet deep oil
well of the oil rig platform six miles off the coast of
Summerland in Santa Barbara, CA
During the 11 days it took for oil workers to solve the
problem and cap the rupture, 200,000 gallons of
crude oil floated onto the surface of the ocean and
spread out about 800 square miles
What caused the oil spill?
After some investigation, it turns out that the oil
riggers were retrieving the pipe in order to replace a
While replacing the bit, “mud” is usually applied to
In this case, the pressure became dangerously low
and a natural gas blowout occurred.
The pressure created expansion in the Earth, which
expanded the mass and created five breaks in an
east-west fault on the ocean floor.
From this point, oil and gas came out from the Earth
and bubbled up to the surface
Conclusion: Tech is Important!!
From the 1969 Santa Barbara Spill, the United
States learned about the risks of oil drilling
Based upon what immediately caused the oil spill, it
was all technology
More regulation needed
More safety-guards on the oil rigs
Less ease of being able to drill on sites, especially
The only way offshore drilling would be later
approved is if it could be proved from a technical
standpoint that oil spilling disasters can be prevented
Oil Drilling and its Bad Rep
Technology has not changed much over half a century
A few improvements for preventing accidents on oil rigs
- Different Drilling Methods (e.g. Horizontal)
- Satellite imaging
- Seismic indicators
- Time and cost put into the technology
- Accuracy and maintenance
- Overall Risks: Especially Environmental
- Improvements that can be made?