End the War or Drill Offshore: Which Will Yeild More Oil?

So I was thinking about drilling today (kinda been lonely lately) and drilling offshore specifically.

I recently had a post that illustrated how much oil, in barrels per day (BPD), that we could expect to gain by drilling offshore.

Here’s the pic.

Dril, Baby, Drill....You'll have to do it harder than that.

Dril, Baby, Drill....You'll Have to Do It Harder Than That

 I didn’t look it up then, but I wanted to make absolutely sure that these numbers were correct before making this comparison.  I am very confident the above number is correct.   It comes from here.

For the lower 48 OCS, annual crude oil production in 2030 is projected to be 7 percent higher—2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case (Figure 20). Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant. 

 My point here isn’t that offshore drilling won’t affect prices (we already know it won’t impact them at all for at least 10 years, and then by a couple cents), but the point that in 22 years, what we can expect to see is maybe 200,000 BPD in extra oil production.  I haven’t seen estimates for the cost of extraction, which with oil prices tumbling with the rest of the world’s economy could severely hamper extraction attempts, but that’s the general figure outside of ther forces.   As the report states…

Although a significant volume of undiscovered, technically recoverable oil and natural gas resources is added in the OCS access case, conversion of those resources to production would require both time and money. In addition, the average field size in the Pacific and Atlantic regions tends to be smaller than the average in the Gulf of Mexico, implying that a significant portion of the additional resource would not be economically attractive to develop at the reference case prices.

Now the other part of the equation: How Much Oil Do the Wars In Iraq and Afghanistan consume?

The US Department of Defense (DoD) is the largest oil consuming government body in the US and in the world

“Military fuel consumption makes the Department of Defense the single largest consumer of petroleum in the U.S” [1]

“Military fuel consumption for aircraft, ships, ground vehicles and facilities makes the DoD the single largest consumer of petroleum in the U.S” [2]

According to the US Defense Energy Support Center Fact Book 2004, in Fiscal Year 2004, the US military fuel consumption increased to 144 million barrels. This is about 40 million barrels more than the average peacetime military usage.

By the way, 144 million barrels makes 395 000 barrels per day, almost as much as daily energy consumption of Greece. 

These are 2004 numbers, before the war in Iraq really got going, and the cost got calculated….

If you make the calculation for peacetime vs wartime, and remove the 40,000,000 extra barrals a year, we end up at “normal” military use of ….285,000 BPD.

A difference of 110,000 BPD with basic wartime consumption.

And that was in 2004.

In the May 2005 issue of the Atlantic Monthly article Robert Bryce says that “The U.S. military now uses about 1.7 million gallons of fuel a day in Iraq. … each of the 150,000 soldiers on the ground consumes roughly nine gallons of fuel a day. And that figure has been rising.” This mean in Iraq each day 40 000 b/d of oil is consumed by the US military.

Yes, something is wrong with that figure. Compare it with the one given by the Defense Logistics Agency spokeswoman Lana Hampton. Accroding to an American Forces Information Service News Article she said the U.S. military is using between 10 million and 11 million barrels of fuel each month to sustain operations in Afghanistan, Iraq and elsewhere. This makes 330 000 – 360 000 barrel per day.

So now we are looking at a calculated difference of somewhere between 110,000 BPD on way low-end and 360,000 BPD on the high end.

We look quickly at history again…

According to a Rand Corporation report “1.88 billion gallons of fuel were consumed within the U.S. Central Command’s area of responsibility during Operations Desert Shild and Desert Storm (ODS/S), between August 10, 1990 and May 31, 1991.” [5]. This makes 44.8 million barrels, or 150 000 barrels a day. Note that ODS/S lasted 295 days.

[sourced here with additional sources]

…and we see that the easy, quick, and successful war in Iraq used at least 150,000 BPD.

Given all these numbers, and both wars, and a surge, I think it is very easy and accurate to say that our wars are currently consuming more than 200,000 BPD IN ADDITION to the regular, defensive operation of military forces.

So which is the quicker way and more effective way to get more oil? 

Peace.

Unsurprisingly. 

I know of no wise people in history who ever recommended consumption as a cure to addiction.  I know of many who speak of restraint and humility as a reliable course of therapy.

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