“Drill, Baby, Drill” and the Price of Gasoline26 Jun

Several decades ago the United States was a major exporter of crude oil. There was plenty of secure, domestic crude oil to make gasoline for passenger cars. Gasoline prices were generally stable.

Now the United States imports 60 percent of its crude oil needs. That means availability of gasoline for 137 million passenger  cars is far less secure and can lead to higher prices.

In 11 years, the United States will import 100 percent of its crude oil needs based on known reservoir capacities and current withdrawal rates. Availability and price of passenger car gasoline will be greatly influenced by exporters of crude oil.

Significant new sources of crude oil are not likely in the lower 48 states or Alaska. With the possible exception of the Gulf of Mexico, they are all past peak production.

Oil production jobs in the lower 48 states and Alaska will disappear in about 11 years. Those workers will need to find other employment (e.g., shale gas production?).

New crude oil sources might be discovered in the outer continental shelf (OCS) of Alaska, the Atlantic, Pacific oceans, as well as the eastern and central sectors of the Gulf of Mexico. However, estimates on reservoir volumes lack modern seismic survey data. (See Annual Energy Outlook 2011, Projections to 2035, p 35, Department of Energy.) How can one form a national energy policy based on uncertain reservoir capacities?

Conclusion: It is troubling to think that the misguided, uninformed  “Drill, Baby, Drill” folks might influence an urgently needed, yet non existent national energy plan.

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About Dr. Everson

Prior to forming this SBIR consultant practice, Dr. Jeffrey Everson was director of business development for QinetiQ North America’s Technology Solutions Group (previously Foster-Miller, Inc.).

Dr. Everson has won and been the principal investigator for several SBIR programs, including a Phase I program for NASA, a Phase I project for the U.S. Air Force, and Phase I and II contracts from the U.S. Department of Transportation. For the Phase II program, he received a Tibbetts Award for exemplifying the best in SBIR achievement.

Previously Dr. Everson held senior scientist positions at Battelle Memorial Institute, The Analytic Sciences Corporation (TASC), Honeywell Electro Optics Systems Division, and Itek Optical Systems Division.

He holds a PhD in physics from Boston College and a MS/BS in physics from Northeastern University.

Contact

For more information about how JHEverson Consulting can help your company with its SBIR and STTR proposals, please contact Jeff Everson.

JHEverson Consulting is based in the Boston area but consults for clients throughout North America. It also is supported by affiliated consultants.