Recommended Reading: New EIA Report, “Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays”

A new report by the U.S. Energy Information Agency is an important read for all seriously interested in oil development and economics.   See “Review of Emerging Resources:  U.S. Shale Gas and Shale Oil Plays, Energy Information Administration (July 2011).

While reports about gas shale plays in the Lower 48 have become increasingly common on a region basis, this report is an excellent comprehensive overview of the staggering size of the potential of the resource at the full Lower 48 level.

Perhaps of even greater relevance to Alaska, however, is the review of the Lower 48’s increasingly significant oil shale potential.  While spot reviews of the Bakken and Eagle Ford have been available previously, this is one of the first — if not the first — attempt at a comprehensive overview of the emerging potential of the resource throughout the Lower 48.

The result?  Significant numbers.  The report analyzes four shale oil plays — the Bakken, the Eagle Ford, the Avalon and Bone Springs (West Texas and Southeast New Mexico) and the Monterey/Santos (California).  As much as we have heard about the Bakken and Eagle Ford, the surprising thing hi-lited by this report:  the majority of the oil shale potential is located in the Monterey/Santos.

To put these numbers in context, by the end of 2007 Alaska’s North Slope fields had produced, in total, about 15.7 billion barrels of oil.  On the other hand, EIA estimates that the the technically recoverable resource of the four oil shale regions analyzed in the report is approximately 24 billion barrels.  The Monterey/Santos shales alone are estimated to hold 15.4 billion barrels.

Why are these numbers important to Alaska?  Because there is only so much capital available for investment in the oil patch.  Alaska has seen the last few years the effect on it of the better investment opportunities available in the Bakken and elsewhere in the Lower 48 gas shale plays, not to mention elsewhere in the world.  The increased opportunity presented by oil shale plays on the order of magnitude suggested by the EIA report will only increase the competition for investment dollars.

The report is an important read if you are seriously interested in Alaska’s oil future.  It is always important to understand the competition.