From Deseret News archives:
Huge oil field found in Gulf
But undersea find may do little to lessen U.S. reliance on imports
It could be the biggest domestic oil find in 38 years, but production is years away, and even then it won't reverse America's growing reliance on imports or have any meaningful effect at the gasoline pump.
"It's a nice positive, but the U.S. still has a big difference between its consumption and indigenous production," said Art Smith, chief executive of energy consultant John S. Herold. "We'll still be importing more than 50 percent of our oil needs."
A group led by Chevron Corp. has tapped a petroleum pool that lies 270 miles south of New Orleans — and almost four miles beneath the ocean floor — in a region that could hold as much as 15 billion barrels of oil, or more than Alaska's Prudhoe Bay.
"It confirms a new frontier, a new horizon in the ultra-deep water," said Daniel Yergin, chairman of Cambridge Energy Research Associates and author of "The Prize," the Pulitzer Prize-winning history of the oil industry. "It isn't energy independence," he added.
Nevertheless, the announcement of a test well that sustained a flow rate of more than 6,000 barrels per day is a boon to Western oil companies at a time when they are finding it harder and more expensive to gain access to countries such as Russia and Venezuela, and when foreign supplies are increasingly at risk because of political unrest across Africa and the Middle East.
The proximity of the Gulf of Mexico to the world's largest oil consuming nation makes the new discovery extra attractive to the industry; however, analysts said the new find could bring pressure on Florida and other states to relax limits they have placed on drilling in their offshore waters for environmental and tourism reasons.
Chevron estimated that the 300-square-mile region known as the lower tertiary, a rock formation that is 24 million to 65 million years old, contains between 3 billion and 15 billion barrels. The upper end of that range would be enough oil to expand the country's reserves by 50 percent. But the first drop of oil from the lower tertiary isn't expected to hit the market until at least 2010, and at best it will only slow the decline in annual U.S. production.
The discovery in the Gulf of Mexico comes at a time in which Utah also is seeing a boom in oil and gas exploration.
The renewed interest in Utah is tied in many ways to Wolverine Gas and Oil, a Michigan-based company, which in 2004 made a surprise oil find near the town of Sigurd, Sevier County. Wolverine's wildcat well sent companies grappling for lease rights, believing they could be the next to strike it big.
