Economic Boom by Oil Shale and Shale Gas Production

Economic Boom by Oil Shale and Shale Gas Production 

Conventional Oil is identified and defined by the World Energy Council (2007) to exclude the following categories: oil from coal, shale, bitumen and Extra-Heavy Oil.  This report will strictly address the economic advantages of mining shale, particularly for crude oil and natural gas.

Total world resources of shale oil are conservatively estimated at 2.8 trillion barrels.

Shale Fracking

Since 2000, shale beds went from providing 1% of America’s natural gas supply to nearly 25% today.

Most of that production increase is due to the growing popularity of hydraulic fracturing [fracking].  Fracking is a process used to release oil or gas from underground formations that are otherwise too difficult to mine.  Fracking technology advances in the last few years has made it economically feasible to tap the tremendous reserves of natural gas in the United States.  With crude now over $100 a barrel, the shale industry is highly competitive.  Even with crude falling to much less from conventional sources, oil shale mining has come of age and ready to compete.

Environmental Considerations

Mining oil shale involves a number of environmental impacts, more pronounced in surface mining than in underground mining.  They include acid drainage induced by the sudden rapid exposure and subsequent oxidation of formerly buried materials, the introduction of metals including mercury into surface-water and groundwater, increased erosion, sulfur-gas emissions, and air pollution caused by the production of particulates during processing, transport, and support activities.  As more and more shale mining has gone underground, new processes have been in place, and technology has evolved, the environmental risks are minimal.

Oil Shale has Several Uses other than Fuel

In addition to its use as a fuel, oil shale may also serve in the production of specialty carbon fibers, adsorbent carbons, carbon black, phenols, resins, glues, tanning agents, mastic, road bitumen, cement, bricks, construction and decorative blocks, soil-additives, fertilizers, rock-wool insulation, glass, and pharmaceutical products.  Source: Francu, Juraj; Harvie, Barbra; Laenen, Ben; Siirde, Andres; Veiderma, Mihkel (May 2007) (PDF). A study on the EU oil shale industry viewed in the light of the Estonian experience.   A report by EASAC to the Committee on Industry, Research and Energy of the European Parliament. European Academies Science Advisory Council. pp. 12–13; 18–19; 23–24; 28. http://www.easac.org/fileadmin/PDF_s/reports_statements/Study.pdf. Retrieved 2010-06-21. 

Oil and Natural Gas

Play	Location	Crude Oil (bbls)	Natural Gas (trillion cubic ft).  Reserves in parenthesis	Jobs	Direct Economic Benefits
Alberta Bakken	Alberta, MT	2.6
Antrim Shale	MI		20
Avalone & Bone Springs	NM, TX	2
Bakken (North Dakota Shale)	MT, ND	3.6
Barnett  Shale Play	TX		43 (26.4)
Barnett-Woodford			32
Big Sandy			7
Cana Woodford			6
Cincinnati Arch			1
Devonian Low Thermal Maturity		14
Eagle Ford		3.4		12,000 currently; 68,000 by 2020 (UTSA)
Fayetteville	AR		32 (9.1)
Floyd-Neal & Conasauga			4
Greater Siltstone			8
Green River Formation	CO, UT, WY	1.5 -1.8 trillion
Haynesville shale	AR, LA, TX		75
Haynesville/Bossier			(10.5)
Hilliard-Baxter-Mancos			4
Lewis			12
Mancos			21
Marcellus	OH,PA, WV, NY		410 (4.5)	110,000
Monterey/Santos	CA	15.4
New Albany/Ohio Shale	OH		11
Niobrara Shale	CO, KS, MT, ND, SD, WY	1
Pinedale Anticline	WY
Red River	SD
Sunbury Shale	IN, KY, OH
Washakie Basin		50
Williston-Shallow Niobraran	ND		7
Wolfberry Formation
Woodford Shale	OK		22 (6.4)

Shale Plays

According to the Energy Information Administration (EIA), shale gas plays, or fields, in the United States contain enough natural gas to power the country for 110 years.  With new methods of extraction, such as multiple horizontal drillings from one wellhead, natural gas production has and will continue to increase.

The most notable current operating shale fields include:

1. The Marcellus, in Pennsylvania, West Virginia, and New York, and the Barnett, in Texas – this shale represents 35 – 40% of the total U.S. shale gas resource.  This was projected to have created 111,000 jobs in 2011 – Estimated to have 410 trillion cubic feet of Shale gas resources
2. The Bakken, in Montana and North Dakota – Estimated to have 3.6 billion barrels of shale oil resource

Other shale fields:

1. Arkansas (Fayetteville shale  - Estimated to have 32 trillion cubic feet of Shale gas resources)
2. Avalone & Bone Springs  - Estimated to have 2 billion barrels of Shale oil resources
3. Barnett-Woodford - Estimated to have 32 trillion cubic feet of Shale gas resources
4. Big Sandy  - Estimated to have 7 trillion cubic feet of Shale gas resources
5. California (Monterey/Santos play) – estimated to hold 15.4 billions barrels of shale oil resources
6. Cana Woodford  - Estimated to have 6 trillion cubic feet of Shale gas resources
7. Cincinnati Arch  - Estimated to have 1 trillion cubic feet of Shale gas resources
8. Devonian Low Thermal Maturity – Estimated to have 14 billion barrels of shale oil resources
9. Floyd-Neal & Conasauga  - Estimated to have 4 trillion cubic feet of Shale gas resources
10. Greater Siltstone - Estimated to have 8 trillion cubic feet of Shale gas resources
11. Green River Formation (Colorado, Utah, and Wyoming) – estimated oil resources of 1.5 to 1.8 trillion barrels.
12. Hilliard-Baxter-Mancos - 4 trillion cubic feet of Shale gas resources)
13. Kentucky Knobs Region (Sunbury Shale) – Kentucky, Ohio, and Indiana
14. Lewis  - Estimated to have 12 trillion cubic feet of Shale gas resources
15. Louisiana (Haynesville shale  - Estimated to have 75 trillion cubic feet of Shale gas resources)
16. Mancos  - Estimated to have 21 trillion cubic feet of Shale gas resources
17. Michigan (Antrim shale - Estimated to have 20 trillion cubic feet of Shale gas resources)
18. Missouri
19. New Albany/Ohio shale - Estimated to have 11 trillion cubic feet of Shale gas resources
20. Oklahoma (Woodford shale  - Estimated to have 22 trillion cubic feet of Shale gas resources)
21. Tennessee
22. Texas (Barnett  shale play - Estimated to have 43 trillion cubic feet of Shale gas resources) (Haynesville/Bossier shale fields); (Eagle Ford Shale Field – Estimated to have 3.4 billion barrels of shale oil resources and  21 trillion cubic feet of Shale gas resources)
23. West Virginia
24. Williston-Shallow Niobraran - 7 trillion cubic feet of Shale gas resources)
25. Wyoming (Pinedale Anticline)
26. Niobrara Shale (stretches across Colorado, Wyoming, Kansas, Montana, and the Dakotas) – possibly up to a billion barrels of oil
27. Southern Alberta Basis, aka Alberta Bakken (straddles Montana and Southern Alberta) – some estimates place this as large as 2.6 billion barrels of reserves
28. Washakie Basin - 50 billion barrels (Trudell, Roehler, and Smith, 1973)

The INTEK shale report stated there are 750 trillion cubic feet of shale gas resources.  This report is a subset of the AEO2011 (Annual Energy Outlook 2011) onshore Lower 48 states natural gas shale technically recoverable resource estimate of 862 trillion cubic feet.

Add in off shore oil drilling sites (conventional oil drilling):

Wet Natural Gas Reserves (billion cubic feet)

Gulf of Mexico Federal Offshore            12,116

Pacific Federal Offshore                          740

Onshore Oil

Prudhoe Bay gas reserves are 30.9 trillion cubic feet.

The National Petroleum Reserve in Alaska (NPRA) is a piece of land owned by the United States federal government located west of the Arctic National Wildlife Refuge (ANWR).  The U.S. Geological Survey (2010) estimates 896 million barrels of conventional, undiscovered oil and 53 trillion cubic feet of conventional, undiscovered non-associated gas within NPRA and adjacent state waters.

Conventional Oil and Natural Gas Drilling

Play	Location	Crude Oil (bbls)	Natural Gas (trillion cubic ft) - Reserves	Jobs	Direct Economic Benefits
Gulf of Mexico Federal Offshore			12,116
Pacific Federal Offshore			740
Prudhoe Bay	AK		30,900

The U.S. Department of Energy has known for a century that the vast extent of U.S. oil shale resources amounts to more than 2 trillion barrels.  The largest shale reserves in the world exist in the United States, which is thought to have 1.5–2.6 trillion barrels.  Sources: Survey of energy resources (21 ed.), World Energy Council, 2007, ISBN 0946121265.  Site:  http://www.worldenergy.org/documents/ser2007_final_online_version_1.pdf. Retrieved 2007-11-13;  Annual Energy Outlook 2006, Energy Information Administration, February 2006.  Site: http://www.eia.doe.gov/oiaf/archive/aeo06/pdf/0383(2006).pdf. Retrieved 2007-06-22;  Andrews, Anthony (2006-04-13), Oil Shale: History, Incentives, and Policy, Congressional Research Service. http://www.fas.org/sgp/crs/misc/RL33359.pdf. Retrieved 2007-06-25;  NPR's National Strategic Unconventional Resource Model, United States Department of Energy, April 2006.  Site: http://www.fossil.energy.gov/programs/reserves/npr/NSURM_Documentation.pdf. Retrieved 2007-07-09.

Economic Benefits Using Conservative Estimate of 2 Trillion Barrels of Crude Oil

Assumptions:  Americans will consume 7.9 billion barrels (bbl) of crude oil and 7.08 bbl of natural gas each year.  Source:  www.worldenergy.org (2012).

Crude oil resources = 2 trillion barrels (DOE)

Shale natural gas = 110 years (Energy Information Agency – EIA)

Production of three million barrels of crude oil [1,095.75 million barrels a year] a day leads to $20 billion in direct economic benefits and 300,000 jobs.  [1,095.75 million barrels = .00109575 trillions barrels].  Conservative assumptions regarding supply and demand elasticities yield an additional annual benefit to American consumers of between $15 billion and $45 billion per year because of reductions in the world oil price.

Calculations

2 Trillion barrels of Crude Oil/.0079 trillion barrels annual consumption = 253 years supply

78 bbl’s natural gas/7.08 bbl’s annual consumption = 110 years

Production:  2 Trillion barrels of Crude Oil/.00109575 trillion barrels = 1,825.23 years

1,825.23 years x $20 billion/year = $36.505 trillion of direct economic benefits

Assuming consumption rates of 7.9 bbls holds for 253 years: 

.0079 trillion barrels of crude consumed for 253 years

.0079 trillion = 7.9 billion

If 7.9 billion barrels of crude oil were produced per year to meet U.S. demand that would employ 7.9 bbl's/1.09575 bbl's = 7.21 [Multiplier - 300,000 jobs are created per each 1.09575 bbl's produced per year].

Number of jobs per year = 7.21 x 300,000 = 2.163 million jobs maintained per year for 1,825 years.  Assuming we use and produce much more than this each year, more jobs would be produced and the direct economic benefits would be received much earlier.

If we made it 100 years to depletion, we would use a multiplier of 18,25 (1,825 years/100) we would get 39.47 million jobs (18.25 x 2.163 million jobs) that would last for 100 years.

Other Drilling Prospects

§         Off the Mid-Atlantic Coast (Virginia)

§         Off the Florida Gulf Coast (soon to be drilled by Cuba)

§         The broader Gulf of Mexico

§         Arctic National Wildlife Refuge (ANWR) - the U.S. Department of Interior (DOI), in its April 1987 report on the oil and gas potential of the ANWR Coastal Plain, estimated that "in-place resources" range from 4.8 billion to 29.4 billion barrels of oil.  Recoverable oil estimates ranges from 600 million barrels at the low end to 9.2 billion barrels at the high end.  They also reported identifying 26 separate oil and gas prospects in the Coastal Plain that could each contain "super giant" fields (500 million barrels or more).

§         Federal Lands in the Rockies

Economic Boom & Possibilities

The Marcellus shale has had an enormous economic impact on Pennsylvania where it had an estimated 111,000 jobs in 2011 with $10 billion added to the state’s economy.

The Bakken formation is even larger and creating yet more jobs and greater money for North Dakota.  With an overall unemployment rate of 3.2% in January 2012 (BLS), it is the shining state of the union right now.

The Keystone Pipeline from Canada is yet another project that would bring jobs immediately to the states and pump oil from a friendly neighbor.

ANWR - The U.S. economy benefits from domestic production when new construction, service, manufacturing, and engineering jobs are created.  These jobs occur in all 50 states.  A national impact study by Wharton Econometrics estimates total employment at full production in ANWR to be 735,000 jobs.  Billions of dollars from bonus bids, lease rentals, royalties, and taxes would enhance federal revenues.

Fastest Growing Jobs

The six fastest-growing jobs for 2010-11, according to EMSI’s latest quarterly employment data relate to oil and gas extraction.  This includes service unit operators, derrick operators, rotary drill operators, and roustabouts.  Each is expected to grow anywhere from 9% to 11% through this year, in an otherwise mostly stagnant economy.

Occupation	2010 Jobs	2011 Jobs	Change	% Change
Service unit operators, oil, gas, and mining	42,110	46,766	4,656	11%
Derrick operators, oil and gas	23,323	25,747	2,424	10%
Rotary drill operators, oil and gas	28,116	30,981	2,865	10%
Roustabouts, oil and gas	75,636	82,678	7,042	9%
Helpers, extraction workers	44,303	47,247	2,944	7%
Petroleum engineers	29,063	30,917	1,854	6%
Biomedical engineers	16,065	17,061	996	6%
Wellhead pumpers	24,186	25,616	1,430	6%
Extraction workers, all other	23,423	24,784	1,361	6%
Geological and petroleum technicians	35,304	37,205	1,901	5%

A mixed bag of other extraction and petroleum-related jobs — wellhead pumpers, “all other” extraction workers, geological and petroleum technicians — are also expected to see healthy gains.  In total, nine of the top 11 fast-growing jobs in the nation are tied in one way or another to oil and gas extraction.

The mining, quarrying, and oil and gas extraction industry added more than 345,000 jobs nationally from 2007 to 2009, and continues to grow at a rapid pace as shown above.  Of the 506,401 new jobs in the sector since 2006, more than 431,000 have been in the crude petroleum and natural gas extraction industry (NAICS 211111).  This sub-sector has grown by a whopping 113% nationally in the last six years while mining (except oil and gas) remains at its 2006 employment level.

Every state except for Maine has added jobs in crude petroleum and natural gas extraction since 2006, with Texas, Oklahoma, California, and Kansas leading the way.

Increased Innovation

The recent ability of combining fracturing technology with directional drilling allows one well pad to drill six to eight horizontal wells.  This allowed the amount of U.S. natural gas resources that were recoverable to jump from 1.5 quadrillion cubic feet to 2.5, accounting to an increase of 66% in just one year, from 2007 to 2008.  This breakthrough also resulted in the plummeting of the wellhead price of natural gas from $8 per thousand feet to $3.67 per thousand cubic feet.  This helps keep electricity prices low for American consumers as 24% of all electricity is created via natural gas.

Despite the repeated calls for further studies on fracking and suggestions that it is dangerous to the water supplies and surrounding populations, there is no substantive data to support these claims. 

The Critical Importance of Quick Extensive Action

About 63% of the U.S. trade deficit ($784.08 billion) comes from buying crude from overseas ($496.4 billion).  Source:  www.usdebtclock.org (3/30/12).  Imports make up 65% of the United States’ crude oil supply and the expectation that the percentage will rise [CRS Report for Congress, April 13, 2006].

Oil shale plays are located throughout the U.S. and could boost related employment nationwide.  There would be no expenses of transporting crude from foreign countries and then having to refine it here.  Every increase in production would help lower crude prices throughout the world and aid in boosting a worldwide economic recovery.  New pipelines would improve the distribution network and lower transportation costs, by removing trucks from the process.  In addition to crude, our natural gas reserves would increase, lowering electricity and heating costs for millions.  Natural gas can be used to power cars, and is, to the tune of about 10 million cars worldwide.

Every 3 million barrels of low-cost oil produced by the oil shale industry equates to direct economic profits in the $20 billion per year range.  Through lease bonus payments, royalties on production, and corporate income taxes, roughly half of these profits will likely go to federal, state, and local governments and, thereby, broadly benefit the public.  Additionally, there would be lower unemployment, especially in many of the worst economically depressed areas, boosts in associated production (piping, steelwork, etc.), and boosts to local economies.  Some estimate that a few hundred thousand jobs will likely be associated, directly and indirectly, with a 3 million barrel per day industry.

Direct Employment

Assuming 200,000 barrels of capacity continue are added each year, roughly 20,000 construction workers will be employed in plant construction and mine development.  [This estimate assumes a construction and mine development work force of 1,000 workers, averaged over an estimated five-year construction period, for each 50,000 barrels per day of capacity under construction.  Annually adding 200,000 barrels per day of new production capacity requires that at any time 1 million barrels of additional capacity is under development.  This is a very rough estimate, based solely on OTA’s (Office of Technology Assessment) estimate of 1,200 construction workers for a plant producing 50,000 barrels per day dating back to 1980 (OTA, Volume I).  As before, this estimate applies only to approaches using mining and surface retorting.  [Considerable construction and preproduction development work is involved in thermally conductive in-situ conversion processes.  This includes extensive drilling; placement of heating elements; construction of oil storage facilities upgrading or refining facilities, oil pipelines, power plants, and cryogenic [production and storage at low temperature] plants; and creating the entire infrastructure required for power and water delivery.]  Considering plant operations and construction, an estimated 70,000 workers would be employed in either plant operations or new plant construction.

Indirect Employment

To obtain a rough estimate of indirect employment, we assign the collective oil shale workforce (construction and operations) an employment multiplier of between two and three, which means that each direct job creates an additional two to three indirect jobs, stemming primarily from supplier, and re-spending effects.  [The estimated employment multiplier (EM) of 2.0 is based on consideration of the following sectors: mining (including petroleum and natural gas extraction), EM = 2.03; construction, EM = 1.90; fabricated metals (relevant to construction), EM = 2.23; manufacturing (overall), EM = 2.91; chemicals, EM = 4.94; and petroleum refining, EM = 11.89 (Bivens, 2003).]  Considering both direct and indirect employment, roughly 200,000 to 300,000 jobs will be associated with an oil shale industry producing 3 million barrels per day.

The United States must move NOW on this Economic Opportunity

The United States will consume 7.9 and 7.08 billion BTU's of crude oil and natural gas, respectively, in 2012 according to www.oilprice.com.  Can the United States afford to sit on its natural resources while its national debt hits nearly $20 trillion dollars by the end of 2012?  Americans need every job that it can produce, lower transportation costs (lower fuel prices), lower inflation, and for its country to return to firm financial footing. 

Alternative energies are simply futuristic thoughts that will become relevant when the market economics weigh in their favor (its price of production is comparable to that of fossil fuels, and its output is comparable - without subsidies).  Americans are innovators, especially when the government does not overburden them with ridiculous, numerous, overreaching regulations.  They will continue to seek alternative energy sources, and their supporters will continue to purchase their products, even if they come at a cost premium.  Many suppliers are charging a premium for their products because of a simple brand name, perceived value, or novelty.

Fracking has Huge Economic Benefits

The idea that fracking and drilling offers negligible returns is unfounded.  Look at what its done in North Dakota, where fracking has produced billions of dollars in revenues, thousands of jobs ($70,000 to 120,000 a year), and the lowest unemployment rate (3.2%) in the country [The Bureau of Labor and Statistics (BLS) report, Jan. 2012.]

This country is sitting on its own path to energy independence, low unemployment, and high GDP growth.

U.S. vs. Saudi Arabia Oil Reserves (Conventional)

Saudi Arabia reportedly holds proven reserves of 267 billion barrels (CRS Report for Congress, April 13, 2006).  Just the Green River Formation (federally held) formation is estimated to contain more than 8 trillion barrels of shale oil in place.  Source:  Thomas Lonnie, Bureau of Land Management, Testimony before the Senate Energy and Natural Resources Committee, Oversight Hearing on Oil Shale Development Effort, Apr. 12, 2005.

At 301 billion metric tons (2,100,469 million barrels), the oil shale deposits in the United States are easily the largest in the world.  There are two major deposits: the eastern US deposits, in Devonian-Mississippian shales, cover 250,000 square miles (650,000 km²); the western US deposits of the Green River Formation in Colorado, Wyoming, and Utah, are among the richest oil shale deposits in the world.  Dyni, John R. (2006) (PDF).  Geology and resources of some world oil-shale deposits. Scientific Investigations Report 2005–5294, U.S. Department of the Interior, U.S. Geological Survey.  http://pubs.usgs.gov/sir/2005/5294/pdf/sir5294_508.pdf. Retrieved 2007-07-09.

End-of-2005 - www.worldenergy.org - Crude oil and natural gas liquids: proved recoverable reserves

United States – Conventional Oil and Natural Gas

Million Tonnes                                 Million Barrels

Crude Oil:            2,968                          Crude Oil:             21,757
NGLs:                      723                             NGLs:                  8,165
TOTAL                 3,691                                                        29.922

The United States has one of the largest and oldest oil industries in the world.  Although its’ remaining recoverable reserves (conventional) are dwarfed by some of the Middle East producers, it is the third largest oil producer, after Saudi Arabia and the Russian Federation.  Compared with the levels at end-2002, crude reserves are 4.1% lower and those of NGLs up by 2.1%.  Crude oil production in 2005 was 5,178,000 b/d and that of NGLs (including 'pentanes plus') was 1,717,000 b/d.

Adding shale production to conventional oil wells will significantly increase the production of both crude and natural gas.

Size of Commercial Oil Shale Plants

Commercial oil shale plants will likely be designed to produce at least 50,000 barrels, and more likely well over 100,000 barrels, of shale oil per day.  This range is based on the announced production targets for potential oil shale operations in Colorado and Utah, as compiled by the Office of Technology Assessment (OTA, Volume I, 1980).  At a minimum, a mine designed to serve such plants will need an annual output of more than 25 million tons.

Considering mine development, upgrading, and modest infrastructure expenditures, a 50,000 barrel per day first-of-a-kind surface retorting complex will incur capital expenditures of between $5 billion and $7 billion (2005 dollars) and possibly higher than that.  We assume operating and maintenance costs for first-of-a-kind plants to be between $17 and $23 (2005 dollars) per barrel (OTA, Volume I, 1980; Albulescu and Mazzella, 1987).  Oil shale mining and spent shale disposal are major components of operating costs.  Mining costs are highly site-sensitive, depending on the ease of accessing high-grade deposits.  For initial commercial operations, we anticipate that underground and surface mining will yield similar operational costs. 

Over the past 20 years, important technical advances have decreased the costs of oil shale mining and surface retorting.  Higher-capacity mining equipment, advances in explosives placement, increased automation, and better information management have caused the real costs of mining to drop considerably.

In Shell Oil’s approach, a volume of shale is heated by electric heaters placed in vertical holes drilled through the entire thickness (more than a thousand feet) of a section of oil shale.  To obtain even heating over a reasonable period, between 15 and 25 heating holes are drilled per acre.  After heating for two to three years, the targeted volume of the deposit will reach a temperature of between 650 and 700 degrees F.  This very slow heating to a relatively low temperature (compared with the plus-900 degrees F temperatures common in surface retorting) is sufficient to cause the chemical and physical changes required to release oil from the shale.  On an energy basis, about two-thirds of the released product is liquid and one third is a gas similar in composition to natural gas.  The released product is gathered in collection wells positioned within the heated zone.

Shell anticipates that the petroleum products produced by its in-situ method are competitive, given crude oil prices in the mid-$20s per barrel (Fletcher, 2005).  Even if production costs come in much higher, they are still highly economically viable given that current crude prices are more than $100 a barrel.

Shale Successes So Far

The proliferation of activity into new shale plays has increased dry shale gas production in the United States from 1.0 trillion cubic feet in 2006 to 4.8 trillion cubic feet, or 23 percent of total U.S. dry natural gas production, in 2010.  Wet shale gas reserves increased to about 60.64 trillion cubic feet by year-end 2009, when they comprised about 21 percent of overall U.S. natural gas reserves, now at the highest level since 1971. 

Trust Companies to Find the Most Efficient and Cost Effective Ways to Mine Shale

Publicly traded companies are accountable to their investors, and make business decisions they expect to improve their bottom line profits.  These are calculated risks supported by investors knowing what is at stake.  Americans have always been free to pursue endeavors such as this, while the government stands to gain immensely from the economic benefits they derive.  The national debt and ongoing deficit spending is the largest threat to our independence.  In addition to the deficit and national debt, this country has unfunded debts in Medicare ($81,784,126,184,457), Social Security ($15,543,766,588,180), and Prescription Drug Liability ($20,501,888,267,804).  This adds up to $117,893,491,665, 428 in unfunded liabilities.  The liability per taxpayer is $1,041,725 for these unfunded liabilities. 

We cannot afford another credit downgrade, bankruptcy, high inflation (like now, if you correctly include energy and food prices), or continued high unemployment.  Government needs to de-regulate as much as possible, balance its budget, and pay off the national debt.  It also needs to fund Medicare, Social Security, and Prescription Drug Liability.  We have hundreds of year’s worth of fossil fuels under our feet and need to use it.  It is a real stimulus that employs Americans, drops fuel prices, controls inflation, and gives everyone (local, state, and federal governments) a big boost in getting their debts under control, and ultimately paid.

Definitions

Crude oil is a naturally occurring mixture consisting predominantly of hydrocarbons that exists in liquid phase in natural underground reservoirs and is recoverable as liquids at typical atmospheric conditions of pressure and temperature.

By most definitions, "reserves" refers only to the amount of resource which is technically exploitable and economically feasible under current economic conditions.  The term "resources", on the other hand, may refer to all deposits containing kerogen.

The In-Situ Conversion Process (ICP), which is more environmentally benign and uses less water than conventional methods, involves heating the rock containing the kerogen until it yields a liquid hydrocarbon.  In order to trap the oil prior to removal and refining, a barrier of ice between the heated rock and the surrounding area is created by the circulation of a chilled, compressed liquid.

Kerogen is a mixture of organic chemical compounds that make up a portion of the organic matter in sedimentary rocks.^[1] It is insoluble in normal organic solvents because of the huge molecular weight (upwards of 1,000 daltons) of its component compounds.  The soluble portion is known as bitumen.  When heated to the right temperatures in the Earth's crust, some types of kerogen release crude oil or natural gas, collectively known as hydrocarbons (fossil fuels).  When such kerogens are present in high concentration in rocks such as shale they form possible source rocks.  Shales rich in kerogens that have not been heated to warm temperature to release their hydrocarbons may form oil shale deposits.

Natural gas liquids (NGLs) are hydrocarbons that exist in the reservoir as constituents of natural gas but which are recovered as liquids in separators, field facilities or gas-processing plants.  Natural gas liquids include (but are not limited to) ethane, propane, butanes, pentanes, natural gasoline and condensate; they may include small quantities of non-hydrocarbons.  If reserves/resources/production/consumption of NGLs exist but cannot be separately quantified, they are included (as far as possible) under crude oil.  In the tables, the following definitions apply to both crude oil and natural gas liquids:

Proved amount in place is the resource remaining in known natural reservoirs that has been carefully measured and assessed as exploitable under present and expected local economic conditions with existing available echnology.

Proved recoverable reserves are the quantity within the proved amount in place that can be recovered in the future under present and expected local economic conditions with existing available technology.

Estimated additional amount in place is the resource additional to the proved amount in place that is of foreseeable economic interest.  Speculative amounts are not included.

Estimated additional reserves recoverable is the quantity within the estimated additional amount in place that geological and engineering information indicates with reasonable certainty might be recovered in the future.

R/P (reserves/production) ratio is calculated by dividing the volume of proved recoverable reserves at the end of 2005 by volumetric production in that year.  The resulting figure is the time in years that the proved recoverable reserves would last if production were to continue at the 2005 level.

Hydrocarbons in oil shale are present in the form of solid, bituminous materials and hence cannot be pumped directly out of the geologic reservoir.  The rock must be heated to a high temperature, and the resultant liquid must be separated and collected.  The heating process is called retorting.