Oil prices are going up, food prices too. And so are the number of oil wells being drilled in the US. According to the American Petroleum Institute, more than 17,000 new oil wells were tapped in 2007, the most active pace since 1990.
Reuters has reported one such case that signifies changing times. What is of significance is that this new oil boom is looking for unconventional, rather than conventional oil.
“George Stapleton has been in the oil business for 30 years, helping plumb sands and shale across the Middle East, Asia and Europe. Now the chief executive of MegaWest Energy Corp is drilling deep into Missouri farmland.”
As Reuters explains: “As giant oil and gas conglomerates focus on key resource sites in Alaska, off shore and abroad, a new breed of speculator is emerging to dig deep into hard-to-mine areas abandoned when energy prices sank in the late 1980s. New technology has made many formerly abandoned U.S. oil fields easier to access, and recent high prices have made using that high-cost technology profitable”.
Although the amount of oil derived from some of these start-up sites is negligible at a few hundred barrels a day or less, such “prospecting by a range of independent operators represents new-found investment opportunity along with the hope of at least some small measure of relief from dependence on foreign oil.
“It is a very significant trend,” said Kishore Mohanty, director of the Institute for Improved Oil Recovery at the University of Houston. “It is all about the money. These high oil prices certainly make it feasible for people to go after it.”
Its all about the money….