42 



method on lantl, but we tend to forget that offshore drilling and production are 

 several times more expensive." "" 



Besides exploration, one is further faced with the following factors : 



— Skyrocketing costs of lease sales and bonuses, particularly in 



the Ignited States ($G00 million each in Santa Barbara Channel 



and Gulf of Mexico in 1968, and the December 1970 sale of $850 



million in the Gulf of Mexico) ; 



— Higher overall costs for offshore operations; 

 — Projected increase in future expenditures toward deeper 

 water ; 

 ■ — Higher costs eventually passed on to the consumer; and 

 — Offshore hazards like blowouts, fires, and oil spills increasing 

 in frequency and magnitude. 

 The question is : Has the industry exhausted land resources ? The an- 

 swer of course is No. The land potential of 4,000 billion barrels of oil 

 estimated by Weeks does not include the vast amounts of synthetic 

 petroleum in bituminous rocks such as oil shales and tar sands. The 

 U.S. Bureau of Mines (Information Circular 8425) estimates that the 

 Green River Formation oil shales contain 2 trillion barrels of oil : 800 

 billion barrels at 15 gallons of oil for a ton of shale, and about 50C 

 billion barrels at 25 gallons of oil per ton of shale are considered prac- 

 tically exploitable. The proved recoverable reserves alone are about 

 four times the total proved U.S. petroleum reserves.'^ The develop- 

 ment of these deposits, as Weeks put it, has been caught in "the polit- 

 ical jungle that has invaded the outlook, and which is partly respon- 

 sible for the lack of progress in this field." He also adds : "Perhaps 

 the petroleum industry on its part has not supplied the kind of ener- 

 getic and particularly united leadership required in dealing with gov- 

 ernment." ^^ 



Other than oil shale, there are still greater amounts of potential 

 synthetic oil and gas in coal. It is estimated that the Avorld has enough 

 coal to last 1,500 years. Then there are tar sands, nuclear power sup- 

 plemented in time by the virtually inexhaustible fast breeder reactor, 

 and other land sources of energy (possibly even fusion) which will be 

 eventually developed and become competitive with oil and gas. There 

 are also those regions on land that have not been explored, and new 

 discoveries like the Alaska North Slope are not to be ruled out. Some 

 scientists believe that a very high percentage of the land surface is stilj 

 unexplored and is considered potentially promising. 



The oil industry contends that despite higher initial investment, the 

 development of an offshore field eventually reduces offshore costs. Off- 

 shore platforms can drill 50-60 wells from one location ; oil accumula- 

 tions in younger strata offshore provide greater yields and higher sue- 



''^ Bduardo J. Guzman. "Are sophisticated exploration methods the answer?" In Vir- 

 ginia S. Cameron, ed. "Exnloration and Economics of the Petroleum Industry : New Ideas, 

 New Methods, New Developments." (1969), pages 21-22. 



™ Several countries are already exploiting their oil shale deposits. At the 1970 Inter- 

 national Gas Conference in Moscow, the USSR revealed that improved mining and 

 mechanized handling methods have pushed Soviet oil shale output beyond 22 million tons 

 per ye'ir (Oil nnd Gns International (September 1970), page 117). Australia also has 

 announced a new project to begin production in 1974 from its vast oil shali^ reserves : the 

 reserves indicate a field life of 50 years. In the United States, about SO billion barrels of 

 oil from the more accessible hiarh grade deposits of the Central Rocl^y Mountains can be 

 considered available with demonstrated methods of extraction, and at costs approachinf 

 the present-day costs of petmlenm of comparable quality. 



■^ Weeks, op. cit.. page 46. See also : Chris Welles,' "The Elusive Bonanza : The Story 

 of Oil Shale." (Dutton, 1970), 256 pages. 



