Friday, December 28, 2007

Is There Really Oil In The Rocky Mountains?

Oil in the Rocky Mountains--sound far fetched? Well, it might not be. Oil prices continue to rise, fueled further by the unfortunate assassination of former Pakistani prime minister Benazir Bhutto yesterday. In addition, a new energy bill was just signed by President Bush, further reinforcing the desire for the U.S. to become energy independent.

Oil shale is abundant in the Rocky Mountains and there is already technology in place that can generate oil from the shale. As the cost to generate this oil continues to drop and the price of oil continues to rise, it seems to be only a matter of time before the U.S. turns the Rockies into an oil field.

Of course there are some drawbacks to drawing oil from shale, including, among other things, pollution concerns. As long as the price of oil stays high, though, these concerns will become increasingly overlooked, as with the oil sands production in Canada. For more information, read our article on Rocky Mountain Oil. But before you get too carried away and buy up land in the Rocky Mountains, it might also be good to read about real estate booms and busts.

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2 comments:

December 29, 2007 at 7:00 AM water drinker said...

Where ya gonna get the water? Which states/ cities along the over allocated Colorado River get depopulated or end agriculture to free up the water required for production? Las Vegas? Denver? San Diego? End ag in California's central valley? What's it gonna be? The water has to come from somewhere.....

December 31, 2007 at 8:08 AM Anonymous said...

Good point, the need for water is certainly one of the potential hurdles that this strategy faces. I believe the bottom line is that if the U.S. believes the need for oil to be great enough (due to price, national security, or what have you) they will make it work one way or another. Could be that they pump water in from the great lakes, or some other U.S. resource, or it could mean that they import water from Canada or elsewhere. There is also current (albeit very expensive) technology in place that could allow them to utilize salt water. Realize though that at some price point these alternative strategies start to make sense. What is that price point and will oil ever reach it, is it already there, who knows?

I think your on to something though, if it comes to this watch out for the price of water. Some people think that water is going to be a huge investment opportunity over the coming years as fresh water supplies dwindle, and the world population continues to rise. Certainly something to watch...

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