Do We Have to Go Over the Oil Production Numbers Again?

Update:  Read the comments for some more information on the estimates which give a different context on the specific claim.  Also, check out Politifact for apparently a GAO estimate by DOE that estimates a much higher rate of savings, but doesn’t include how the DOE estimated the numbers so I’ll leave it with Craig’s last comment below as the final word.

Apparently so.  The problem the GOP doesn’t get is that Obama’s suggestion to inflate your tires properly actually would do more to reduce our reliance on foreign oil than would opening the Gulf of Mexico and ANWR.  I know math is hard, but let’s review the ANWR numbers:

EIA postulates two development rates for each of the three USPS probability estimates without specifying the effect of various levels of oil prices and technology advancements, ranging from 250 to 800 million barrels developed per year. EIA projects peak production rates from 600,000 to 1.9 million barrels per day over the six cases, with peak production estimated to occur 20 – 30 years after the onset of production.

Seven to 12 years are estimated to be required from an approval to explore and develop to first production from the ANWR Area. This study uses 9 years, to 2010. The time to first production could vary significantly based on time required for leasing after approval to develop is given. Environmental considerations and the possibility of drilling restrictions would directly impact the time interval to reach first production.

The USGS economic analysis of the ANWR 1002 Area calculates that once oil has been discovered, more than 80 percent of the technically recoverable oil is commercially developable at an oil price of $25 per barrel. The imported refiner acquisition cost in 2020 is projected in EIA’s Annual Energy Outlook 2000 reference case at $22.04 (1998 dollars). At this price, the potential ANWR oil recovered would have a value between $125 and $350 billion (in 1998 dollars.)

How does that fit into world oil consumption:

The world oil price cases in this report are the same as
those in EIA’s Annual Energy Outlook 2007. In the reference
case, world oil prices decline from $68 per barrel in
2006 to $49 per barrel in 2014, then rise to $59 per barrel
in 2030 ($95 per barrel on a nominal basis). Total world
liquids consumption rises to 118 million barrels per day
in 2030 in the reference case. The low and high price
cases are included to illustrate uncertainties in the reference
case projections (Figure 35). In the low price case,
world oil prices are projected to be $36 per barrel in 2030
($58 per barrel on a nominal basis). In the high price case,
oil prices are projected to be $100 per barrel in 2030 ($157
per barrel on a nominal basis). The projections for total
liquids consumption in 2030 range from 103 million barrels
per day in the high price case to 134 million barrels
per day in the low price case, indicating the substantial
range of uncertainty in the world’s future oil markets.

So the US might be able to add 1 million barrels per day from ANWR at the peak of production.

Look at the projected increase in usage between now and 2030:

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Increase drilling doesn’t even cover the increase in demand through 2010. But look at the estimates for increased efficiency measures including, yes, keeping your tires inflated

By 2030, 6.5 million barrels a day consumption in the United States could be reduced.  That just keeps us even with the expected increase above.

Our reserves are simply too small to make much of a difference in the price of crude oil.

Our daily production has decreased by 2.5 million barrels a day since the 1980s. Estimates put domestic daily production at 5.6 million barrels a day in 2030.

The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017. Total domestic production of crude oil from 2012 through 2030 in the OCS access case is projected to be 1.6 percent higher than in the reference case, and 3 percent higher in 2030 alone, at 5.6 million barrels per day. 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.

Essentially, even though there is more oil than in ANWR, the difficulties of recovering it make the net expected increase for ANWR and OCS is 1.2 million barrels a day out of an estimated 118 million barrels per day consumption–and at the same time estimates of overall US production dropping from 8.5 millions barrels per day to 5.6 million barrels per day.  Even in the case of the full peak production being in 2030 (not at all assured), US production drops by 2 million barrels per day.

Of course, US production matters little in a world oil market and all evidence indicates that demand will be increasing over this time so producing 1 million barrels a day is a drop in the bucket and, in fact, the way to reduce exposure to increasing oil prices is to reduce demand by increasing efficiency and changing to other sources of energy.

Drilling doesn’t do squat.  The US does not have the reserves to continue an economy based on oil and do anything other than become more dependent upon foreign oil.  The only way to move away from foreign oil dependence is to move away from oil.

Consider which scenario does the United States better. When Obama points ridicules McCain for suggesting drilling, he’s right both to ridicule McCain and right that inflating your tires will do the most good for you. Over time, the best solution is to make cars and trucks more efficient.  It’s not a matter of it being a personal virtue to conserve, it’s better for the environment and your pocketbook.

0 thoughts on “Do We Have to Go Over the Oil Production Numbers Again?”
  1. I just debunked the specific barrels saved per year (through tire inflation and engine tuning) versus the minimal boost in off-shore drilling production per year over at Ruberry’s place for “Greybeard” (aka, Mr. Underwear Fetish).

    It’s telling that the conservatives keep comparing savings per year (not cumulative) to the cumulative total of estimated OCS oil. (And Hindrocket even threw in other sources beyond the OCS that Republicans have been talking about of late in order to really boost his fuzzy totals.)

    It doesn’t matter how much is under the ground in total; only how much can get sucked up through the straw because that’s the amount we’ll see per year… And under any scenario it is less than what can be had simply through efficiency and improved gas mileage.

  2. “The problem the GOP doesn’t get is that Obama’s suggestion to inflate your tires properly actually would do more to reduce our reliance on foreign oil than would opening the Gulf of Mexico and ANWR. I know math is hard…”

    Sorry, but you need to be more careful here. If that were Obama’s statement, it would be obviously wrong. But Obama didn’t say that. He included proper maintenance in addition to tire inflation. Now, his statement goes from being obviously wrong to probably wrong.

    The trouble comes from the statistics of how much could be gained from maintaining your car and inflating tires. Nobody has any real numbers, because nobody really knows how many cars are being poorly maintained and inflated. Obama is using 3% gains from tires, 4% from maintenance. But these numbers are suspect.

    What we do (think we) know: gas efficiency drops .4% for every 1 psi of underinflation on all four tires. So, if Obama is right, car tires are, on average, underinflated by 7.5 psi. That’s probably not true. What has been recorded is that an underinflated tire is, on average, underinflated by 7.5 psi. But to get to Obama’s statistic, you’d have to assume that all tires are underinflated. (Wrong on its face: mine aren’t. It’s also almost certainly wrong in real evidence: the TPSS found only 27% of cars had at least one underinflated tire, although their gauge was itself problematic.)

    As far as the gains from maintenance claims, they are ridiculously speculative. The 4% claim comes from a DOE report that says that a car that is “noticeably out of tune or has failed an emissions test” could see a gain of 4%. Do you expect that all cars are noticeably out of tune? Certainly, car dealerships don’t report a rate of near 100% on that. Failing an emissions test? That’s somewhere in the single digit rates.

    If you assume that all cars are out of tune and all tires are significantly underinflated, then the gains from efficiency would be 20 million * .45 (percent of oil consumed as gasoline) * .07 = 630,000 barrels a day.

    Next, we have to decide whether Obama meant both offshore drilling in the gulf and ANWR, or just the gulf. If he included ANWR, the calculation is over. According to your source, ANWR is estimated to have production between 600,000 and 1,900,000. Offshore is estimated to produce an additional 200,000. Together, they are larger than the best case for Obama’s efficiency argument.

    If he didn’t mean ANWR, then the result is open to debate, as there is no real statistic that I know about how poorly maintained our cars truly are. But, let’s find out what it would need to be. The barrels gained from tire inflation will be: 20 million * .45 * .03 * .27 (TPSS statistic — overestimated because it wasn’t talking about all four tires, but giving Obama the benefit of the doubt) = 73000

    So, maintaining your car has to save at least 127000 barrels. That will be true only if 35% of all cars are “noticeably out of tune or have failed emissions tests.” If you believe that to be true, I’d suggest that you buy a mechanic’s shop.

  3. Actually, given the data for a different sample the average underinflation suggests not only is Obama right about off shore drilling, but also ANWR and car maintenance.

    http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2W-4KWTFM8-2&_user=741313&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_version=1&_urlVersion=0&_userid=741313&md5=fd31db3be44d89441b46b4b3e1d1abd6
    (probably only resolvable from campus)

    Energy conservation from systematic tire pressure regulation

    Joshua M. PearceCorresponding Author Contact Information, a, E-mail The Corresponding Author and Jason T. Hanlona
    aDepartment of Physics, 106 Peirce Science Center, Clarion University of Pennsylvania, Clarion 16214, PA, USA

    Available online 15 September 2006.

    “Of the 275 vehicles in this current study the average city mileage was 20.5 mpg and the highway mileage was 27.4 mpg. Combined fuel economy is a harmonically weighted3 average of the city (55%) and highway (45%) fuel economy (mpg) values, which results in a total fuel economy for the vehicles studied to be 23.1 mpg. This is a little larger than the average in the US, with mileage of cars being 22.1 and trucks having a mileage of 17.6, this gives the total fleet an average of about 20 mpg (TRB, 2006). Approximately 12% of the vehicles studied had inflation pressures more than 5 psi below the OEM specifications for all tires. Due to an average under inflation of 2.639 psi in at least all four tires the average loss in fuel efficiency was between 0.162 and 0.216 mpg in the city and 0.216–0.288 mpg on the highway. These values appear conservative as compared to the survey discussed above primarily because the DOT reported the pressure on individual tires rather than the 4-tire model used here. Analysis of individual tire’s effects on fuel efficiency entails numerical simulation and physical verification that will be completed in a future study. In general one or more of the tires on each vehicle was significantly lower than the others and would have had a larger detrimental effect on fuel economy than predicted from the analysis used in this study.

    By inflating the tires to the manufactures recommended pressures, each vehicle would save between 4.0 and 5.4 gallons per year, saving consumers between $11.63–15.58 per year, and preventing between 78 and 105 pounds of CO2 emissions per year. The entire US fleet consumes some 130 billion gallons of gasoline with distance covered of some 2600 billion miles per year (TRB, 2006). If the fleet’s fuel efficiency was increased by 0.216 mpg by proper tire inflation, each year at least 1.388 billion gallons of gasoline would be conserved, preventing over 27 billion pounds of CO2 emissions and saving consumers over $4 billion at the pump.

    ++++++++++++++++++

    While I don’t have them handy, we do have relatively good statistics on how many cars are out of tune from both inspection stations and an even better source–car exhaust monitors on the road. 35% isn’t that far off from what I recall in a talk about the efficiency of road side monitors. Older cars are often the least maintained and add to that, have worse gas mileage, produce the most pollution, and often don’t even have to meet anything, but the most basic air quality rules because the requirements are so low. They often don’t even have to be fully tuned to pass inspection.

    According to the study above, even the 5% likelihood of getting 1.9 million barrels a day doesn’t come close. If you don’t work with the averages as the above does and then just take it as .27, but still work with the overall average, you end up in a tie.

    Of course, the largest point being the United States cannot drill enough either way. Even if you include the OCS and ANWR, our daily production will drop by about 2 million barrels a day between now and 2030. 3 million without the new drilling. Given our proven reserves are far less than OPEC and especially the AOPEC members by a factor of 10 often, reducing reliance on oil means conserving and transitioning from it because we cannot drill enough domestically to make any significant difference in the cost of oil.

  4. “If the fleet’s fuel efficiency was increased by 0.216 mpg by proper tire inflation, each year at least 1.388 billion gallons of gasoline would be conserved”

    Okay. I like the study, although it also relies on somewhat sketchy numbers. 1.388 billion gallons / year = 90,000 barrels per day. Since my above estimate was 73,000, I’d say we’re in the same range. As argued above, ANWR is out of the question. Only Gulf drilling could be debatable. Now under these numbers, it would take a lower percent of cars “noticeably out of tune or have failed emissions tests:” 30%.

    “Of course, the largest point being the United States cannot drill enough either way.”

    Certainly that’s true. I’d go further and argue that drilling more is actually bad. We need to discourage burning of petroleum, not abet it. I wasn’t going to argue with you about that. I was just arguing that what you said was wrong, not that what you meant was wrong. Tire inflation and car maintenance will only help us marginally.

    I have a different “largest point” than you: I believe we need to drastically reduce the amount of petroleum we consume. Playing around with tire inflation and maintenance is only a diversion. We need electric vehicles. We need homes that do not take home heating oil. (Not at all along with this debate topic), we need to convert electricity production away from coal.

  5. Alright, I was confusing my units–you are correct. Hate that. I switched between gallons and barrels at some point and didn’t realize it. So good point. And then we agree ultimately on this being a diversion and where we need to end up.

    The study itself is quite interesting in how they are addressing the issue. It’s a small sample currently, but I like the design. Of the available companies, Walmart is probably the best to get a decent sample.

  6. While it is true Anwar production or other no- existent off shore oil is not going to help us today the threat of production or what we call – simply words can influence the market place. Ultimately we are not going cold turkey on oil use. Gore wants a ten year timetable to eliminate oil as an energy source.

    Consideer oil and other carbon based fuels as “bridge” energy sources. We used to use wood, to heat our homes cook our foods. Then we began to use coal and about that time the industrial revolution began with modern steel production after the civil war. Much of what we know about petrochemicals and carbon based fuels will at some point in the future replace the need to drill for oil.

    The need for energy will not ever be replaced oil and coal will be with us for a while then it will gone. We are using and struggling with its use and we are making headway. Go turn off a light and take a walk, ride a bike, bus. drive slower, use less and we will make it together.

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