By Don G. Briggs, President – LOGA (Louisiana Oil & Gas Association)

If you were to ask me what single issue concerns me the most, I would tell you, I am most concerned that the American public is not aware of what they are about to be faced with. It is also concerning to me when I see Russia, the world’s largest oil producing country, awash with oil revenues, reach out to Saudi Arabia and the OPEC nations, hinting of a possible alliance with the oil cartel. Combined, they would control over 50% of the world’s oil production.

Oil is finite, meaning it depletes. Today, the world’s crude oil depletion rate according to some experts is close to 10%. It’s important to understand that Gawhar, the largest oil field in the world in Saudi Arabia, is in a decline rate of 8%, and Cantarell, the second largest oilfield in the world belonging to Mexico, is in a 10% decline.

Let’s assume the current world crude oil production is at 86 million barrels per day. Using a very conservative decline rate of 7%, the world would have to discover a new 6 million barrels per day next year to stay even with current world supplies. Let’s also assume world oil demand growth is 2%. That would add approximately another 2 million barrels per day. The world will have to discover 8 million new barrels of oil next year to meet decline and growth. That is equivalent to discovering the total production of the United States and Mexico.

The US, having only 5% of the world’s population, consumes 25% of the world’s daily oil production. Our production is 5.1 million barrels of crude of oil per day but we consume 22 million barrels per day, therefore we must import the balance. The US has only 2.5% of the world’s proven oil reserves.

What is wrong with this picture? We are the only country in the world that has 85% of its natural resources off limits for exploration and development. I have said it before and I am saying it again, it is time to lift the moratorium on exploration to the Outer Continental Shelf off the lower 48 states.

The MMS (Mineral Management Services) conservative estimate of US domestic crude oil “Undiscovered Technically Recoverable” is 86 billion barrels. Fifty nine percent of that is in the Gulf of Mexico. The conservative estimate of “Undiscovered Technically Recoverable Natural Gas” is 420 trillion cubic feet. Fifty six percent is in the Gulf of Mexico.

Opponents to lifting the “Moratorium” accuse industry of hoarding idle oil and gases leases and say industry is not producing on 60 million leased acres. Opponents propose a policy of “use it or loose it”. The fact is we already have a “use it or lose it” clause in our federal oil and gas leases which states that if no production is established within ten years, the lease is relinquished.

Since August of 2007, 10 million acres have been leased in the GOM at a cost of $7 billion to industry. Of the 40 million acres currently under lease in the Gulf of Mexico, 10 million acres is acreage turned back to MMS and leased again to industry.

The undiscovered technically recoverable oil and natural gas in Gulf of Mexico is not the long-term solution to our nation’s energy problems, but the bridge that will provide energy security until the “new fuel” of the future is developed.