Is North America a land of opportunity for energy? | ExxonMobil's Perspectives Blog

Is North America a land of opportunity for energy? | ExxonMobil's Perspectives Blog

Is North America a land of opportunity for energy?

June 15, 2011 | Posted by Ken Cohen

Last week, we announced a major oil and natural gas discovery in the Gulf of Mexico – one of the largest there in the last decade. For those who assume that oil only comes from the Middle East or other overseas locations, this find might come as a surprise. It shouldn’t. North America has enormous untapped energy potential that we could develop for American consumers – if governments provide access and uphold sound, stable regulatory frameworks.

Deepwater oil and gas exploration and production in the Gulf of Mexico is just one of several sources of growth in North American energy supplies. A report last year from Cambridge Energy Research Associates found that in 2009, deepwater activity in the Gulf of Mexico helped the United States grow its domestic oil production for the first time since 1991.

In addition, so-called “unconventional” supplies of energy – including shale gas and Canada’s oil sands – have helped revolutionize North America’s energy landscape.

For example, just take a look at the bar graph at left. It shows the geographical breakdown of ExxonMobil’s global oil and natural gas resource base. You’ll see that about half of our company’s resources are found in the Americas.

A sizable part of our resource base is right here in the United States, which isn’t surprising given a 2010 study by the Congressional Research Service that concluded the U.S. “remains among the top nations in proved reserves of all fossil fuels.”

This is positive news for the United States. It means that the U.S. energy industry – which fueled America’s economic rise over the past century, not to mention generations of technological innovation, good jobs and tax revenue – still has lots of room to grow.

The question is whether we will, as a country, take full advantage of the opportunity provided by our energy resources.

Take “unconventional” natural gas production, for example. At the center of the debate is hydraulic fracturing, the process used to release the gas from shale and other rock formations. Hydraulic fracturing itself is not “unconventional” – it’s been used on more than a million wells worldwide for the past 60+ years. Greater production of America’s vast natural gas resources became viable when hydraulic fracturing was combined with horizontal drilling, another proven production technique. But concerns and misconceptions about the safety of this process have led some states to make moves to ban hydraulic fracturing, despite studies that show it can be done safely (see my blog on a recent U.K. study on hydraulic fracturing).

Another example is Canada’s oil sands. Canada is already the No. 1 supplier of oil to the U.S., and more than one-quarter of America’s daily oil needs could come from reliable Canadian supplies by 2030. Yet policies already in place and some currently in debate attempt to restrict the supply of Canadian oil to the U.S.

Policies that support safe and reliable access are critical to our nation’s ability to benefit from the vast supplies of North American energy. And the payoff isn’t just more energy – producing these resources could go a long way toward addressing some of our nation’s biggest economic challenges: high unemployment and government deficits. Here are just a few of the benefits of policies that support access:

• More jobs. One study found that opening up federal lands that Congress has kept off-limits for decades could generate 400,000 new jobs by the year 2025. These are often high-paying jobs; one study showed that oil and gas industry exploration and production wages were more than double the national average.
• More government revenue. Back in 2008, in just that year alone, more than $20 billion was distributed to federal and state governments from onshore and offshore oil and natural gas production, according to the Department of the Interior. Actions such as opening up access to resources could generate as much as $1.7 trillion in government revenue over the life of those resources, one analysis showed.
• A host of other benefits, including: reduced dependence on imported energy, and more of the energy and raw materials used across a wide spectrum of U.S. industries.

Americans know that to truly revive the economy, we need to do it from the ground up. We can start with the energy resources that are right under our feet.