America’s Untapped Fuel Supply

Mackubin T. Owens

October 1, 2006

Gasoline prices have fallen from their highs of the past summer, but the long-term trend is still up, up, up. World oil demand—thanks especially to economic growth in China and India—will only grow. The good news is that we can do something about it—namely, permit the exploitation of America’s vast untapped energy resources.

U.S. demand for oil and gas continues to grow. Americans consume about 20 million barrels of oil day, about 60 percent of it imported. Meanwhile, increased demand has pushed the U.S. price for natural gas to the highest in the world, having increased sevenfold since 1999.

To make matters worse, the world’s spare production capacity is at its lowest level in 30 years, equal to only 1 percent of world demand, making the market extremely sensitive to political and economic uncertainty, hurricanes, terrorism, etc.

What can we do? Conservation—like the improved fuel efficiency so beloved by environmentalists and politicians—can get us only so far. We need to tap our domestic supplies, too. This will not only offset price hikes caused by ever-growing global demand, it will reduce our dependence on imported oil and gas—a boost to national security.

The U.S. Minerals Management Service (a branch of the Interior Department) estimates 102 billion barrels of oil and 635 trillion cubic feet of gas beneath federal lands and coastal waters. By way of comparison, the reserves lying beneath the North Sea, a major source of oil for Europe, are believed to contain a total of 18 billion barrels of oil.

Geologists estimate that another 300 trillion cubic feet of gas and 50 billion barrels of oil are waiting, yet to be discovered, off the “Lower 48” states. The American Petroleum Institute (API) notes that this is enough oil to replace current imports from the Persian Gulf for 59 years.

Overall, experts estimate that the undiscovered resources on the federal Outer Continental Shelf that could be recovered with today’s technology are some 420 trillion cubic feet of gas and 77 billion barrels of oil—as much oil as Canada and Mexico combined, and almost three times their gas resources. (Generally, the OCS begins three to nine nautical miles from shore, depending on the state, and extends 200 nautical miles outward.)

Yet almost 90 percent of the OCS acreage is off-limits to production—on essentially spurious environmental grounds. With a peak output of 6 million barrels of oil a day in 1999, North Sea production has not caused environmental degradation; there is no reason to believe that OCS production would be any more environmentally damaging.

The time has come for Congress to step up to the plate and permit the exploitation of these abundant deposits of oil and gas. Congress also needs to revise the cumbersome federal permit process, which severely retards development of oil and gas, particularly in the Mountain West.

The Senate recently voted to open up a small part of the Alaskan National Wildlife Refuge to drilling, and to give individual states the option to allow offshore oil and gas production, but the House has yet to follow.

A big part of Congress’ job is to balance competing values. On energy, though, policymakers give infinite credence to any environmental concerns. A clean environment is a good thing, but economic growth is, too. Rational tradeoffs will let us have both.

The technology is available to ensure that we can have both access to energy supplies and a clean environment. All it takes is the political will to make the right energy decisions.

Estimated US energy resources



Atlantic Outer Continental Shelf


Gulf of Mexico


Pacific OCS


Alaska OCS


Alaska Onshore


“Lower 48” Onshore



* billion barrels
** trillion cubic feet

Source: US Department of the Interior

Mackubin T. Owens is an Adjunct Fellow of the Ashbrook Center and an associate dean of academics and a professor of national-security affairs at the Naval War College in Newport, R.I.