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Can the U.S. Drill Us Out of Imports?

Editor’s note: We have no crystal ball, but at press time we could already assume with confidence that, whatever the price of oil is when you read this, that price will be different than the price the same barrel cost a week earlier.

A volatile world usually equals volatile prices. But then, it’s almost summer -- maybe the ups-and-downs are getting us ready for roller-coaster season.

By now EVERYONE is trying to become an expert on oil imports, and what that activity means to our economy. So, chances are you may be asked this question by one of your non-industry friends or family members.

You’re welcome ...

Source: Energy Information Agency

Can increased domestic exploration sharply reduce the amount of crude oil the U.S. now imports?

Short answer: Probably not.

Big discoveries from exploration? “I don’t think it’s going to sharply reduce imports, because when those things come on line, the reserves in the Lower 48 will have declined even further,” according to Joseph P. Riva, who wrote a report on the world’s oil outlook for the U.S. Congress in 1995.

Riva also has worked in the petroleum industry, the Smithsonian Institution and the Congressional Research Service of the Library of Congress. He also served as a senior research geologist for the U.S. Geological Survey.

And not only is he a recognized expert on world oil and a longtime member of AAPG, he’s authored more than 200 publications, including several books and the fossil fuels sections of the Encyclopaedia Britannica.

Riva’s reasons: As the numbers for U.S. production decline, consumption growth and total imports have grown too large to offer much hope.

Between 1986 and the end of 2001, annual U.S. crude production fell by over 1.05 billion barrels. During the same period, annual U.S. petroleum demand increased 20 percent, rising by more than 1.29 billion barrels.

Since then, however, a business recession and September 11 have dampened demand growth.

But the better argument is that more -- and more successful -- exploration will be required to prevent a future surge in imports.

Forget about REDUCING imports.

Looking ahead, the U.S. may need a Prudhoe Bay-size discovery to replace Prudhoe Bay, and another Prudhoe Bay-size discovery to keep oil import levels from rising.


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