Environmental Engineering Reference
In-Depth Information
It's usually a safe bet, then, to meet enthusiastic boasts about pro-
spective oil riches with a skeptical eye. Until a few years ago, the United
States had been through two periods of oil optimism since the 1973
oil crisis, only to see its hopes eventually dashed each time. Since the
United States reached its peak output in 1970 and started to see oil
production decline, it has twice appeared to turn things around.
4
h e
i rst run began in 1977 and lasted through 1985. It was propelled by
one big development: production from Alaska's North Slope, which
began in 1977 and peaked at nearly two million barrels a day in 1988.
5
Production within the United States was bolstered by high oil prices,
which kept some aging i elds in the lower forty-eight states in business
for a few years more than many had expected. By 1985, though, the
North Slope was starting to lose steam. A staggering drop in oil prices
that year, brought on by a Saudi decision to l ood the market with cheap
crude, crushed production in the lower forty-eight, permanently ending
the eight-year run of increasing output.
h e second turnaround was far more short-lived: oil production
edged upward between 1990 and 1991 before continuing with its pre-
vious decline. Falling crude prices collided with a new ban on most
of shore oil and gas development, issued by George H. W. Bush in 1990,
to seal the trend.
Yet the third time may turn out to be dif erent. Oil production rose
every year between 2008 and 2012—and production was up in i t een
states. Oil prices still swing up and down, but with the average price
of a barrel of crude topping sixty dollars in every year since 2005, the
bet ing money now seems to say that oil will fetch big bucks for many
more years to come.
6
h is would seem to place American oil produc-
tion on far i rmer i nancial ground than it has enjoyed at any time since
the 1970s.
h e bulls have another important thing going for them: the sheer
diversity of new prospects is unprecedented in recent memory, partly
inoculating predictions of plentiful oil to the risk of individual failures.
In the 1970s, almost all the action was in Alaska; in the early 1990s, it
was mostly of shore. Today boosters talk about prospects ranging from
tight oil (ot en referred to as shale oil) to deepwater drilling to new
Alaskan crude to oil shale to enhanced recovery of oil from old i elds
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