USGS Greenland Survey Shows Much Lower Resource Potential

WASHINGTON Aug 29, 2007 (Dow Jones Newswires)

The northeastern shore of Greenland could provide the U.S. with significantly fewer billions of barrels of oil and gas resources than previously thought, the U.S. Geological Survey said Tuesday.

The lower resource estimate will mean that, as domestic production declines, the U.S. will have to increasingly rely on other major producers such as Russia, Venezuela, West African states and the Middle East.

The USGS published the first review of the hydrocarbon potential of the region in seven years, estimating more than 30 billion barrels worth of petroleum reserves.

The government agency said it believed the area - which lies under massive sheets of ice in water depths up to 500 meters - holds 9 billion barrels of oil, 86 trillion cubic feet of natural gas and 8 billion barrels of natural gas liquids that are undiscovered but recoverable.

The 2000 survey estimated 47 billion barrels of oil, 81 trillion cubic feet of gas, and 4 billion barrels of natural gas liquids.

"Knowing the potential resources of the Arctic - an area of tremendous resource potential, environmental sensitivity, technological risk and geological uncertainty - is critical to our understanding of future energy supplies to the United States and the world," said USGS Director Mark Myers. "This is the first systematic and comprehensive analysis of the undiscovered petroleum resources of the Circum-Arctic in the public domain," he said.

The USGS said there is no current technology for exploring or developing oil and gas accumulations under sea ice such as those thought to lie in reservoirs in northeastern Greenland.

As the last major survey of the geologic potential of the Arctic estimated that 25% of the world's remaining undiscovered hydrocarbon resources lay within the Arctic circle, the U.S. government was hoping to supplant other crude imports with future supplies from the Arctic. Greenland, although the country governs itself, is part of the Kingdom of Denmark, and it is thought it would be a politically stable and a reliable supplier.

The USGS said Greenland is the prototype for its USGS Circum-Arctic Resource Appraisal, and the USGS will be releasing assessments of all the Arctic provinces over the next year.

Copyright (c) 2007 Dow Jones & Company, Inc.


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