The Significance of Deepwater Oil Drilling for the US Energy Security: The Case of the Gulf of Mexico

Hamza Hamza

doi:10.3844/erjsp.2011.38.50

Abstract

This study seeks to quantify and model the significance of the deepwater oil development for domestic US energy supplies in the short-term. It explores the significance and potential contribution deepwater oil supply from the Gulf of Mexico (GoM) can make in providing energy security to the US. The output of this research demonstrates the growth in deepwater oil production and how this latter relates to total US oil production over the next 10 years; and therefore the role it can play in providing energy security to the USA. The literature offers commercial and academic debate on this topic. The research model analyses current available data and make sensible assumptions on the likely future growth of deepwater oil production in the GoM based on a number of scenarios. Our results support the high/best case and suggest that deepwater oil from the GoM can significantly provide energy security to the US on the short term. However, on the long term and in order to maintain its energy security, the US needs to develop and use renewable sources of energy.

Highlights

Domestic US oil production is in decline
This creates a situation of energy vulnerability or ‘in-security’ as the US does not have direct control of its own energy supply
This paper focuses on the significance of deepwater oil in the Gulf of Mexico (GoM) in how much it can contribute to US domestic oil supply over the 10 years and contribute to energy security in the US

Summary

INTRODUCTION

Domestic US oil production is in decline. A growing majority of oil supply to the US comes from foreign sources. This paper focuses on the significance of deepwater oil in the GoM in how much it can contribute to US domestic oil supply over the 10 years and contribute to energy security in the US It explores the ongoing debate on how far deepwater can go to move the needle on oil supply and the US’s reliance on imports. A supply interruption by oil suppliers such as OPEC is economically and politically costly This is an important challenge and leads us to question if vulnerability to ‘purpose made’ oil supply disruptions is a real driver for the development of domestic production today. Leap (2007) stresses that deepwater is one raises an interesting premise that investment into of the few areas where good prospects of major oil domestic oil supply will make little difference to the finds still remain and these are mainly outside the US’s reliance on foreign imports and control of OPEC.

There is the case to argue that both deepwater oil

Findings

MATERIALS AND METHODS