Friday, January 1, 2010

The Hidden Reserves of Gull Island and Other Cornucopian Legends

Stressful times have a way of infusing new life into old superstitions and legends, and sure enough, now that oil prices are making a choppy path back to triple digits and existing elephant fields are showing symptoms of exhaustion, the conspiracy theorists are reviving rumors of vast, untapped supplies of oil, "enough to last two hundred years", or is "bigger than Saudi Arabia".

The two most enduring legends are Gull Island and the Bakken Formation.These two fields were discovered decades ago, and any hopes that these fields could approach the production of Gwaihir or Cantarell have been dashed many times over. The vast reserves simply are not there, but the myth dies hard. A Google search brought up hundreds of articles on each field, and in the case of Gull Island, the conspiracy hacks claim that the U.S. government has conspired to cap these wells and keep secret their existence in order to drive up oil prices. There are many plausible explanations for the shutting in of productive wells by the producer, and it's not difficult to imagine that a producer might wish to put a floor under oil prices, since a temporary glut can drive prices to points below profitability, but it is difficult to imagine a vast government conspiracy to raise oil prices in view of the fact that oil production is heavily subsidized in the U.S. with a vast variety of tax favors and incentives, in order to keep prices artificially low, and current prices are still low enough to render offshore drills and extraction from the Calgary sands prohibitively expensive and risky. Wells are shut in when the energy required to work them exceeds the energy that can be extracted from them, that simple, which is why the tar sands projects have been shut in and the offshore drills are not being done- the cheap, easy sweet crude is mostly gone, and what remains is the stuff that is difficult and expensive to get out of the ground. This means that price of oil must be at a certain level to justify the development of these sources, and when it isn't, they will go untapped.

Every report of fabulous reserves at Gull Island and government conspiracies to keep them from being exploited trace their roots back to Lindsey Williams, a Baptist missionary who published a book in 1980 called The Energy Non-Crisis, which describes the Gull Island field and speculates that it might contain enough oil to supply the U.S. for 200 years; in other words, that it is another "elephant" field. That there are thousands of websites echoing Williams' amazing claims is testament to the resilience of cornucopian myths, for Gull Island has indeed been explored and drilled, but it is not producing anything like the 2 million barrels a day that he claims it is capable of, but more like 4,000 barrels a day at the most from Gull no. 1 and Gull no.2. Gull Island State no. 3, drilled in 1992, was a dry hole. According to the Alaska Oil and Gas Conservation Commission (AOGCC), and by the words of ARCO geologists working at the site, “both the geologic evidence and the small area not yet developed into oil fields around the Gull Island wells preclude the possibility of a giant oil accumulation.”(Petroleum News)

According to Alaska's Division of Oil and Gas, the largest pool at Gull Island has thus far produced 396 million barrels of oil, and has perhaps 164 million remaining- and that is the largest of the pools. Therefore, we are probably talking about 1 billion barrels of oil at the most to be had from this legendary field, which, while respectable, is piddling relative to the truly large fields containing 5 billion barrels or more, let alone the supergiants of Saudi Arabia and Iraq. It's difficult to believe that any consortium of industry players or government bureaucrats could keep such a find a secret for longer than it takes to file for the drilling permits. Perhaps it's a matter of public perception; to most people out here, 164M sounds like a lot of oil, and 5 billion is staggering, for most people do not realize that the U.S. rips through 7 billion barrels a year. Nor do they realize that while we once found much greater quantities of oil than the world used, that now the finds are very small relative to global demand, which is growing while new discoveries are smaller and smaller. A recent white paper authored by Dr. Robert Hirsch, Giant Oil Field Decline Rates and Their Influence on World Production,  makes it clear that the world's giant fields are in decline and that the decline rate vastly outpaces the rate of new discoveries.

The Bakken Formation, a gigantic formation that is nearly 200,000 square miles in size, was first discovered in 1951 and then abandoned for decades as impossible to work because the petroleum is encased in layers of impermeable dolomite,and is a truly tantalizing find. The formation stretches across three states and provinces, and some geologists speculated that as much as 400 billion barrels of oil might reside in the layers of  impermeable shale and dolomite. However, it turns out that, based on current production, that the most the formation can be expected to yield, given current levels of knowledge and technology, is about 4.1 billion barrels. While that is a pretty respectable number, it won't come near meeting our ongoing demand, let alone that of rapidly developing economies in Asia such as China, India, and Indonesia with their huge populations of a billion people or more and rapidly devoping industrial economies.

The cornucopian tales of vast, unlimited resources and conspiracies to price them out of reach to the needy population are matched by the myths of "green" Perpetual Motion machines spun by the fantasists of the Green movement, and the current liberal political regime has bought into them hook, line, and sinker. Environmentalists Amory Lovins and Al Gore, who are the most prominent propagators of the alt-energy myths, have attained almost God-like status among the Green contingent, as well as considerable influence within the Obama administration. The plot line of green fantasies of the unlimited energy that could be realized from solar, wind, and geothermal power is similar to that of the fossil fuel cornucopians. We could, they say, run our cities and transportation entirely on wind, solar, and geothermal were it not for government coddling of the fossil fuel industries and deliberate obstruction of alternative technologies. "Whole cities are run on wind power!" exclaim the fantasists, and they point to such "cities" as tiny Rock Port, Missouri, pop.1300,  as examples of the superiority of "renewable" energy. The little hamlet near the Nebraska border has achieved energy independence by means of four wind turbines that cost $90 Million and  that generate 5 megawatts a power per day.  A closer look reveals that not only is this expensive power -it translates to a minimum .20 cents per kilowatt hour under the best circumstances, but that the system must be tied to the nation-wide grid for backup power when the wind is not blowing. In other words, like solar power, it is reliant upon fossil fuel backups to assure reliable, uninterrupted power generation, thus blasting away fantasies of energy independence from "renewables". Additionally, the Rock Port project is one node of a much larger project in the area, which meant that the turbines cost much less than they would as a "stand alone" project, and the town was, under its previous arrangement, paying a substantial premium for power transmitted from distant places, known as a "wheeling charge", for the line loss involved in transmitting electricity over vast distances, which elevated its power costs significantly. In other words, Rock Port is a special situation, a tiny community in a remote location that has benefited from a convergence of unusual circumstances: the high cost of importing power from remote sources, the loss of other alternatives such as the hydro that used to supply the town, and proximity to a large wind farm and the existence of ideal weather for wind generation, along with a tiny population and copious federal subsidies. Such a combination of factors doesn't set up often, and even so, the town is ultimately reliant upon fossil fuel for its power given the intermittant nature of wind power and the difficulty of storing it.

But no matter how often and convincingly these myths are debunked, they retain their life and their power over a frightened population traumatized by the loss of the industries that made this country, for a time, the wealthiest and most productive nation ever to exist; blindsided by the vicious reversal and revealed fraud of the "growth" economy that seemed invincible just a few years ago, and now confronted with steep, irreversible financial losses and, worse, the permanent loss of our high level of comfort and the terminal depletion of the resources that have made it possible. Right now, we are in denial, which is the first stage of the grieving process, and that denial is manifest in the cornucopian fantasies of government coverups of giant oil finds and suppression of alternative energy sources that could, people believe, make it possible to continue our current obscenely wasteful consumption of resources. Such denial is utterly human and completely understandable.

But it won't help us in the task of reorganizing our economy and communities in keeping with reduced energy imputs and the contraction and eventual loss of industries reliant upon cheap, plentiful lifestyles. We will soon progress to the second stage of the grieving process, which is anger, and millions of people consumed with pain and rage will target the usual scapegoats, which would include our political leaders, who will pay a steep price for pandering to the wish-based fantasies of a population steeped in denial.

However, the steepest price of all will be paid by the 290 million or so "ordinary people", whose failure to reconcile their desires with emerging conditions  will set them on a collision course with unpalatable realities, and who will thus be driven into corners defined by no-win choices and who will not have the alternatives available to our financial and political elites.Most of us will not be able to fly off to pristine little communities buried in remote spots, or accumulate vast stockpiles of provisions and ammo in gated compounds guarded by private armies.

And at that point, the "bargaining" stage of the process, we will not be the ones setting the terms of the deal. The hard facts of resource scarcity in combination with a population utterly unprepared to cope with life on terms vastly different than those of the past 70 years will set the terms, and we will have to cope however we can, minus the skills and mentality that could make the difference between life with a certain minimal level of tech amenity in solid communities in an honest, productive economy; and the chaos, scarcity, and rampant violence of a society rapidly devolving into savagery and civil breakdown as its fantasy-driven denizens wander witlessly from place to place in search of illusionary prosperity and safety, and of leaders who will tell them exactly what they want so badly to believe, which is that we can flout the laws of nature and continue to consume vastly more than we produce, whether energy or the goods the energy makes possible.


Schuyler said...


Beautifully written; points well made. From my own experience, I see little indication of the U.S. having reached the denial stage. Rather, the masses, though privy to distorted bits and pieces, minutia of the energy and ecological story, have yet to understand it in any cohisive or rational way. I spend every day at one of the best universities on the planet, and when I attempt to raise the subject of energy resource limits and economic implications of rising net energy costs, I am met with blank stares or questions regarding my sanity. :-) So much for mitigation and hopes for a smooth transition at the precipice of a long term energy crisis. :-P

I will pass your article on to others however!

Austin, Texas

Sildenafil Citrate said...

untapped supplies of oil, "enough to last two hundred years"??? that could be a big rumor, if that is true, big companies or entrepreneurs would be already working on getting all that oil...or maybe there is a strategy to keep increasing the oil price

Anonymous said...

Sorry - don't believe you. I've worked at Prudhoe Bay and talked to people who have worked there all their lives. Gull Island is the real deal. I wouldn't believe the Government if they told me the sky was blue. These people want us dependent on Middle East oil.

The North Coast said...

What was your job function at Prudhoe Bay? Are you in possession of the numbers for the discovered and probably reserves for Gull Island?

Nothing I have read anywhere suggests that Gull Island would be able to produce anything like 2M barrels a day? If it were, I fully trust that our politically powerful oil companies would be all over the place there. Anything that promises any kind of a yield these days is being tapped and if it isn't, it's because the stuff is either there or is so expensive to extract that it isn't worth it, as many offshore drills are proving to be.

Anonymous said...

Sounds like north coast works for an oil co..Did you know there oil fields producing more and it is a different type?Also, oil did not come from dead dinosaurs. The new oil is coming from deep within the earth. Talking about ineffficiencies, can you spell ETHANOL ?

TEss said...

Well it looks like you were wrong. Lindsey is saying right now on Alex Jones that the biggest floating drilling rig on the planet "Liberty" has just moved to Gull Island.
You don't move that rig unless you know you are going to get some juice.

Anonymous said...

And it's Big. When the Elite do things,they do them big... Just like they are doing Us...

Anonymous said...

Liberty is on a man made island called SDI near Endicott. It is NOT an oil platform, but yes it was brought in on a barge. It is the worlds largest oil rig, its derrick is nearly 200ft. tall.

Anonymous said...

Gull island is real. Talked to several that worked and lived there. They said there are even bigger pools in the Gulf of Mexico.