How big is the Gulf of Mexico oil find announced last week by Exxon Mobil? BIG. As in a projected 700 million barrels and as Houston-based industry analyst John White reminds us: "Seven hundred million barrels doesn't happen very often...That's a lot of oil."
Yes, and it's also a spectacular illustration of what can happen when the energy industry is allowed to search for and develop American resources - in this case a reservoir of oil more than a mile underwater, in Exxon's Keathley Canyon blocks, about 250 miles southwest of New Orleans. The discovering well is one of only 15 new wells allowed by the federal government since a moratorium on deepwater drilling was lifted in October.
Finds like Exxon's Keathley Canyon, Shell's Cardamom field (estimated 140 million barrels) and others, on and offshore, represent a down payment on an energy future in which 92 percent of our liquid fuel needs could be supplied by secure sources in the U.S. and Canada by 2035. That is, by accessing oil on public lands and federal waters that currently are or have been off-limits and by partnering with our ally to the north. Here's API President and CEO Jack Gerard:
"We have vast oil and natural-gas reserves in this country. If given the opportunity, we will find those as an industry and be able to bring those to the marketplace. The industry is anxious to get back to work. We just need the government to let us get back to work."
Opportunity. Opportunity is access to resources. Otherwise, resources remain untapped and America's reliance on imported oil remains unchanged.
In Exxon's case, the Gulf drilling ban delayed discovery by about a year. Exxon had started exploratory work when the administration's moratorium shut things down. Exxon didn't resume drilling until a new permit was issued in March.
Heritage Foundation blogger Rob Bluey notes data that shows deepwater permit issuance from the Bureau of Ocean Energy Management, Regulation and Enforcement is down 88 percent from the previous year's average. That's why the Energy Information Administration projects Gulf oil production to be off by 20 percent in 2012. House Oversight and Governmental Reform Committee Chairman Darrell Issa comments:
"Let's remember that this successful project was approved and moving into location at the time the moratorium was put into place, and sat idle from 2010 through March 2011. Lost time is lost opportunity and the economic price has been paid by workers in the Gulf region and consumers at the gas pump."
The alternative track is smart, safe development oil resources in the U.S. and Canada, whose oil sands region could deliver up to 830,000 barrels of oil per day - if the new Keystone XL pipeline is built, linking Alberta and U.S. refiners.
It's all about access - which means reasonable development on and offshore, an end to policies that slow-boat regulatory processes and a policy determination that oil and natural gas are key to our energy needs today and tomorrow.