Gulf of Mexico: Is There an Oil and Gas Bonanza?

How much oil and natural gas lies beneath the Gulf of Mexico?

The U.S. Energy Information Administration believes there are 4 billion barrels of proven reserves of oil within U.S. waters along the Gulf as well as 12,000 billion cubic feet of natural gas.

Elsewhere along the Gulf, oil and natural gas reserves are enormous.

The U.S. Geological Survey assessed there could be as much as 38 billion barrels of offshore oil stretching from northern Mexico to the tip of the Yucatan Peninsula.

The USGS has also estimated there could be as much as 101,548 billion cubic feet of natural gas.

The oil potential and steadily rising global demand for oil is leading a search for energy. Drilling is starting off the coast of Cuba, and Mexico is getting ready for its own offshore auctions.

Oil exploration in the Gulf is picking back up after drilling faltered following the Deepwater Horizon disaster of 2010.

Now that BP (NYSE: BP), the company mainly responsible for the disaster, has reached a settlement for part of its liability in that case, the pace of activity may speed up further.

Since the post-Deepwater Horizon moratorium on Gulf drilling was lifted in February 2011, the Bureau of Safety and Environmental Enforcement division of the U.S. Department of the Interior has issued 316 deepwater permits requiring underwater containment features, and an additional 115 new shallow water well permits.

The number of deepwater permits has exploded by more than 400 percent since then. A year ago, only 56 deepwater permits were issued.

The jump is partly attributable to the Obama administration's plan to increase domestic energy production.

One reason there's such interest in the Gulf is the high price of oil. In Tuesday trading on the New York Mercantile Exchange, the price per barrel settled at $104.90, down $1.92.