Good article from the WSJ. I'm sure it will "displease" some of the Move-on crowd that frequent this site.
"REVIEW & OUTLOOK
Windfall Profits for Dummies
May 3, 2008; Page A10
This is one strange debate the candidates are having on energy policy. With gas prices close to $4 a gallon, Hillary Clinton and John McCain say they'll bring relief with a moratorium on the 18.4-cent federal gas tax. Barack Obama opposes that but prefers a 1970s-style windfall profits tax (as does Mrs. Clinton).
Mr. Obama is right to oppose the gas-tax gimmick, but his idea is even worse. Neither proposal addresses the problem of energy supply, especially the lack of domestic oil and gas thanks to decades of Congressional restrictions on U.S. production. Mr. Obama supports most of those "no drilling" rules, but that hasn't stopped him from denouncing high gas prices on the campaign trail. He is running TV ads in North Carolina that show him walking through a gas station and declaring that he'll slap a tax on the $40 billion in "excess profits" of Exxon Mobil.
The idea is catching on. Last week Pennsylvania Congressman Paul Kanjorski introduced a windfall profits tax as part of what he called the "Consumer Reasonable Energy Price Protection Act of 2008." So now we have Congress threatening to help itself to business profits even though Washington already takes 35% right off the top with the corporate income tax.
You may also be wondering how a higher tax on energy will lower gas prices. Normally, when you tax something, you get less of it, but Mr. Obama seems to think he can repeal the laws of economics. We tried this windfall profits scheme in 1980. It backfired. The Congressional Research Service found in a 1990 analysis that the tax reduced domestic oil production by 3% to 6% and increased oil imports from OPEC by 8% to 16%. Mr. Obama nonetheless pledges to lessen our dependence on foreign oil, which he says "costs America $800 million a day." Someone should tell him that oil imports would soar if his tax plan becomes law. The biggest beneficiaries would be OPEC oil ministers.
There's another policy contradiction here. Exxon is now under attack for buying back $2 billion of its own stock rather than adding to the more than $21 billion it is likely to invest in energy research and exploration this year. But hold on. If oil companies believe their earnings from exploring for new oil will be expropriated by government â€" and an excise tax on profits is pure expropriation â€" they will surely invest less, not more. A profits tax is a sure formula to keep the future price of gas higher.
Exxon's profits are soaring with the recent oil price spike, but the energy industry's earnings aren't as outsized as the politicians seem to think. Thomson Financial calculates that profits from the oil and natural gas industry over the past year were 8.3% of investment, while the all-industry average is 7.8%. And this was a boom year for oil. An analysis by the Cato Institute's Jerry Taylor finds that between 1970 and 2003 (which includes peak and valley years for earnings) the oil and gas business was "less profitable than the rest of the U.S. economy." These are hardly robber barons.
This tiff over gas and oil taxes only highlights the intellectual policy confusion â€" or perhaps we should say cynicism â€" of our politicians. They want lower prices but don't want more production to increase supply. They want oil "independence" but they've declared off limits most of the big sources of domestic oil that could replace foreign imports. They want Americans to use less oil to reduce greenhouse gases but they protest higher oil prices that reduce demand. They want more oil company investment but they want to confiscate the profits from that investment. And these folks want to be President?
Late this week, a group of Senate Republicans led by Pete Domenici of New Mexico introduced the "American Energy Production Act of 2008" to expand oil production off the U.S. coasts and in Alaska. It has the potential to increase domestic production enough to keep America running for five years with no foreign imports. With the world price of oil at $116 a barrel, if not now, when? No word yet if Senators Clinton and Obama will take time off from denouncing oil profits to vote for that."
Good article. Hillary came up with another idea of economic ignorance to pander to the ignorant. She now wants the evil oil companies to pay for the federal gas tax holiday over the summer from their obscene profits. None of the candidates has offered any solutions that will improve the energy problem and, in fact, have offered ideas that will make things much worse. Hillary's and Obama's old and disproven idea's of taxes, taxes, and more regulation, and McCain's apparent appeasement to the environmental lobby do not bode well for the future well being of the economy and people's standard of living. The answer is staring them in the face but welcome to the new hysterical world where more and more lemmings are lining up at the cliff.
Quotewhy are the prices so high again?
Because the market( the oil producing nations, the companies, the shippers, the refiners, the commodities dealers, the retail sellers ) continue to view the insane and potentially disasterous energy policy of the US Congress as they ride the road to economic hell paved with the false sense of good and morally superior intentions. Unless a miracle breakthrough occurs in hydrogen fuel technology and even less so in any of the other alternatives, we will continue to decline until we reach a critical point where our Congressmen will be afraid to walk the streets until they do the right thing and get the hell out of the way.
Quote from: stephendare on May 05, 2008, 01:04:13 PM
how, exactly, did oil go from the low 30s to 120 a barrel in three years again, willy?
Price is generally set when supply meets demand. When demand goes up so do prices.
Maybe it was George Bush or the evil oil companies? I have an idea.....let's regulate a company's profit when we don't like how they are making their money. You mean someone has already thought of that? Darn!
In all seriousness though, drilling off Florida, California, and or ANWR would significantly help. Building a refinery more than once every 35 years is a good idea. Nuclear energy is an excellent way to go! It's clean and we already have the technology! There are multiple of options if only Congress would get off their "cave in to special interest" butts. The idea of regulating profits is silly and gets us on another very slippery slope.
QuoteOil Passes $120 as Dollar Weakens
Filed at 3:35 p.m. ET
NEW YORK (AP) -- Oil futures surged to a new record over $120 a barrel Monday, raising concerns about higher prices for gasoline and goods and services throughout the economy. Retail gas prices fell more than a cent over the weekend, but oil's advance increased the likelihood that pump prices would resume their climb.
Supply threats that emerged overseas and a weaker dollar sent light, sweet crude for June delivery to a new trading record of $120.36 a barrel on the New York Mercantile Exchange before futures retreated slightly to settle up $3.65 at a record $119.97.
http://www.nytimes.com/aponline/business/AP-Oil-Prices.html
Quote from: stephendare on May 05, 2008, 04:57:25 PM
Quote from: willydenn on May 05, 2008, 04:22:38 PM
Quote from: stephendare on May 05, 2008, 01:04:13 PM
how, exactly, did oil go from the low 30s to 120 a barrel in three years again, willy?
Price is generally set when supply meets demand. When demand goes up so do prices.
Maybe it was George Bush or the evil oil companies? I have an idea.....let's regulate a company's profit when we don't like how they are making their money. You mean someone has already thought of that? Darn!
so........
we spend three trillion to guarantee oil supply.
the price instead goes from 32 dollars a barrell to 120 dollars a barrel in 3 years after taking 100 years to get from 1 dollar a barrel to 30 dollars a barrel.
the economy, in serious trouble from the money spent on the war is nearly crippled by the prospect of higher energy prices and
suddenly the oil companies are making their most gigantic profits in the history of the business.
I agree with you willy. Dont tax the bastards.
Just make them pay for the war instead.
Its great that you think the oil companies should get to keep all the money that they can stuff into a safe.
Its too bad that you hate regular american so much that you dont give them the same rights.
Oil prices have spiked due to the weakening of the dollar and ever increasing demands around the world (especially China and India).
Why shouln't oil companies keep thier own money? They earned it. They are publicly traded which means many "regular americans" own it. Maybe you should buy a few shares........if you don't have some already? ;D
The real indicator of any "gouging" is an increase in profit MARGIN, which is never talked about by our politicians. The profit margin has held steady at about 10%.
Overall you nailed it. I hate regular Americans. And I "do not want to give them the same rights."....whatever that means ???
C'mon, you guys, stop fooling around. Nobody will buy a script for Idiocracy II. The first one went right to DVD!
QuoteOil soars to settle above $133
Futures surge after a government report shows a surprise drop in crude and gasoline stockpiles.
NEW YORK (CNNMoney.com) -- Oil prices hit a fourth straight closing record Wednesday - shooting over $133 a barrel - after the government said crude and gasoline stockpiles decreased last week, surprising analysts who were expecting an increase.
U.S. light crude for July delivery settled at $133.17 a barrel, up $4.19, on the New York Mercantile Exchange. Prior to the 10:30 a.m. ET report, oil was down 29 cents to $128.69.
Over the last four days, oil has gained more than $9 per barrel.
http://money.cnn.com/2008/05/21/markets/oil_eia/index.htm?postversion=2008052115
Oil Execs went before congress today citing "supply and demand" as the reason for high gas prices.
http://thebrokenforum.wordpress.com/2008/05/21/oil-exec-says-supply-and-demand-to-blame-for-rising-fuel-costs/ (http://thebrokenforum.wordpress.com/2008/05/21/oil-exec-says-supply-and-demand-to-blame-for-rising-fuel-costs/)
the oil execs represent the supply side.
BRIC...
Brazil
Russia
India
China
there is your demand side.
Oh, don't worry. Oil will be down to $60.00 barrel by midsummer when the speculators all leave........
None of this is being driven by demand, nobody wants or uses oil, they all just speculate on it. Kind of like a parlor game, you know, like Monopoly.
everything will be just fine......
As you were.
Supply is constrained in the US at least because government refuses to allow the exploration for and drilling of oil in much of the US.
Quote from: RiversideGator on May 21, 2008, 11:28:08 PM
Supply is constrained in the US at least because government refuses to allow the exploration for and drilling of oil in much of the US.
'That can't explain the run up in prices. That was the case 6 months ago, 12 months, 5 years ago, 10 years ago. The supply has not been 'newly' constrained, the demand has risen dramatically.
That is like saying I have stomach pains because I don't wear bigger trousers after gaining weight. Did the pants cause the pains or the weight gain?
Too bad Raegan repealed the higher energy standards put in place by Jimmy Carter. We would be foreign-oil free by now. Not to mention no need for foreign oil, means no excuse for wars for oil.
Yeah, those higher energy standards from good ol' Jimmuh sure prevented long lines at the gas station and calmed people from panicking as gas prices rose. ::)
Let's look at the overall big picture. Supply is constrained due to the federal government's idiotic policy to not drill and not explore for more domestic production of oil and gas, demand is up, and the value of the dollar has fallen. All of those facts are creating a perfect storm of price increases.
As indicated earlier, profit margin is a true indicator of price gouging. However, I notice that nobody even remotely cares about other "necessities" being priced out of our asses. Case in point, what about cell phone service? Isn't that deemed a practical necessity for the modern world? While the highest profit margin for any oil company was Exxon Mobil at 43.3%, cellphone service carrier Alltel had 57.2%, for example.
OK, maybe cell phones can be considered a "luxury". What about regular phone service with the telecom industry? Bellsouth = 59%, Qwest = 59.2%, Sprint = 60.7%. How about tech companies like Microsoft, Google, and Intel? I believe that you would have great difficulty even posting here without their services. Gross profit margins? 81.4%, 69.3%, and 62.5% respectively.
Notice that the majority of the people who constantly complain about oil companies are the ones who have an environmentalist agenda. I think if you're going to convict companies for excessive prices for profit, you should at least have consistency in your argument.
Quote from: Charleston native on May 22, 2008, 12:29:16 PM
Yeah, those higher energy standards from good ol' Jimmuh sure prevented long lines at the gas station and calmed people from panicking as gas prices rose. ::)
Let's look at the overall big picture. Supply is constrained due to the federal government's idiotic policy to not drill and not explore for more domestic production of oil and gas, demand is up, and the value of the dollar has fallen. All of those facts are creating a perfect storm of price increases.
As indicated earlier, profit margin is a true indicator of price gouging. However, I notice that nobody even remotely cares about other "necessities" being priced out of our asses. Case in point, what about cell phone service? Isn't that deemed a practical necessity for the modern world? While the highest profit margin for any oil company was Exxon Mobil at 43.3%, cellphone service carrier Alltel had 57.2%, for example.
OK, maybe cell phones can be considered a "luxury". What about regular phone service with the telecom industry? Bellsouth = 59%, Qwest = 59.2%, Sprint = 60.7%. How about tech companies like Microsoft, Google, and Intel? I believe that you would have great difficulty even posting here without their services. Gross profit margins? 81.4%, 69.3%, and 62.5% respectively.
Notice that the majority of the people who constantly complain about oil companies are the ones who have an environmentalist agenda. I think if you're going to convict companies for excessive prices for profit, you should at least have consistency in your argument.
Carter's energy standard's where put in place AFTER the energy crisis. It was in response to the 'crisis' that OPEC artifically created. However Carter had the foresight to realize a genuine crisis would eventually occur. Low and behold, we are there. I guess you should at least know some history, in order to have some consistency in your argument.
If we had kept those standards, we would be independent of foreign oil, just as Brazil is today, and would have been for a couple of decades.
Supply is no more constrained domestically than it has been long BEFORE this current situation.
I guess you don't have a problem with drilling off the coast of Charleston or Jacksonville? What is good for ANWR is good for everywhere else right?
Yes, vic, I believe that drilling off our coasts would be acceptable, as long as the distances of platforms were out of coastline view. That can be accomplished.
Uh, BTW, there was a second oil crisis in 1979, headlong during the Carter administration. Bungling relations with Iran added to it. Dephasing of price controls prolonged the crisis, and Carter never set price controls on imported oil, causing the aforementioned long lines at the gas station. Nevermind that when Reagan repealed Carter's energy standards and eliminated price controls on domestic oil, prices for oil and gas decreased considerably.
Yeah, here we are, alright, as our nation is continuously inhibited from using its own resources by do-gooders like the peanut farmer, directing us to install solar power panels, wear sweaters, and turn down the thermostats. Bandaids instead of real solutions. I love it.
Quote from: vicupstate on May 22, 2008, 01:02:10 AM
Quote from: RiversideGator on May 21, 2008, 11:28:08 PM
Supply is constrained in the US at least because government refuses to allow the exploration for and drilling of oil in much of the US.
'That can't explain the run up in prices. That was the case 6 months ago, 12 months, 5 years ago, 10 years ago. The supply has not been 'newly' constrained, the demand has risen dramatically.
That is like saying I have stomach pains because I don't wear bigger trousers after gaining weight. Did the pants cause the pains or the weight gain?
Too bad Raegan repealed the higher energy standards put in place by Jimmy Carter. We would be foreign-oil free by now. Not to mention no need for foreign oil, means no excuse for wars for oil.
Supply has not increased while demand has. That is a classic cause of higher prices. Couple this with a weaker dollar and, since commodities are traded in dollars, oil goes through the roof. Also there is a third cause which is speculators drawn into this mess as a hedge against inflation.
BTW, your Reagan comment is laughable. Reagan's policies of deregulating the economy and the oil industry gave us the incredibly low oil prices we all enjoyed for over a decade until quite recently. Time to drill more, defend the dollar and drive out the speculators. It is as simple as that.
Many still expect the oil prices to reduce though (although others expect increases). Read this article for more:
(http://www.telegraph.co.uk/money/graphics/2008/05/22/ccoil122a.gif)
QuoteOil's perfect storm may blow over
By Ambrose Evans Pritchard
Last Updated: 3:28pm BST 22/05/2008
The perfect storm that has swept oil prices to $132 a barrel may subside over the coming months as rising crude supply from unexpected corners of the world finally comes on stream, just as the global economic downturn begins to bite.
The forces behind the meteoric price rise this spring are slowly receding. Nigeria has boosted output by 200,000 barrels a day (BPD) this month, making up most of the shortfall caused by rebel attacks on pipelines in April.
Why oil could soon come barrelling down
Keep the motors running: increased oil production from countries such as Brazil, Sudan and Azerbaijan is helping satisfy rising global demand for the fossil fuel
The Geneva consultancy PetroLogistics says Iraq has added 300,000 bpd to a total of 2.57m as security is beefed up in the northern Kirkuk region.
"There is a strong rebound in supply," said the group's president Conrad Gerber.
Saudi Arabia is adding 300,000 bpd to the market in response to a personal plea from President George Bush, and to placate angry Democrats on Capitol Hill - even though Riyadh insists that there are abundant supplies for sale.
Non-OPEC oil production growth
Like the rest of Opec, the Saudis blame "speculators" for running amok, pushing paper contracts into the stratosphere.
The ever-diminishing reserves of oil in the earth's crust will doubtless drive crude prices to much higher levels over time - provided no new technology such as nuclear fusion abruptly changes the picture - but that will not stop cyclical ups and downs along the way.
The world's finely balanced market for crude has been creeping into surplus for several weeks. Opec's monthly report says that demand this quarter will average 85.75m bpd. Supply was 86.8m bpd in April. The fresh output from Nigeria, Iraq and Saudi Arabia may push it significantly further into surplus.
The signs are already surfacing in global inventories. Opec says that stocks held by the OECD club of rich countries are above their five-year average, with "comfortable" cover for 53 days' use. US stocks have edged up for the last four months, though they fell last week.
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While it is widely reported that output from the non-Opec trio of Norway, Britain, and Mexico has relentlessly fallen, it is less well known that a clutch of other countries are gradually filling the breach.
The US Energy Information Agency says non-Opec supply will edge up by 600,000 bpd over coming months as Brazil, Azerbaijan and the Sudan raise production. By next year, the US itself will be producing enough extra oil to shave its import needs.
OPEC surplus crude oil production
None of this has been enough to curb the buying frenzy this spring. Goldman Sachs has warned that prices could reach $200 in a final spike, and even the bears at Lehman Brothers say there may be enough momentum to keep the boom going until Christmas.
It is unclear whether hedge funds and investors piling into futures contracts have now become the driving force in a speculative bubble. The Bank of England said yesterday that they were not a factor.
Lehman's latest report - Is it a Bubble? - says commodity index funds have exploded from $70bn (£36bn) to $235bn since early 2006. This includes $90bn of fresh money. Energy takes the lion's share. Every $100m flow of investment money into oil lifts crude prices by 1.6pc, it said.
"We see many of the ingredients for a classic asset bubble," said Edward Morse, Lehman's oil expert.
This week has seen a dramatic surge in oil contracts dated as far forward as 2016. Futures have moved higher than the spot price, a rare event known as "contango". This can cut both ways: either as a sign of an impending supply crunch years hence; or that the futures market has become unhinged from reality.
What we know is that the International Monetary Fund has cut its forecast for world growth for 2008 three times since last autumn to 3.7pc, and the United Nations is predicting just 1.8pc - technically, a global recession. The major oil forecasters have halved their estimates for crude demand growth to 1.2m bpd.
The bulls say that the US housing crash and spreading contagion in Britain, Spain and Japan do not matter much for oil in the changed world of rising Asia.
The US added just 7pc of crude demand growth from 2004 to 2007, compared with 34pc for China, 25pc for the Middle East and 17pc for emerging Asia.
Goldman Sachs argues that fuel prices in most of these countries are held down by state controls, insulating demand from the effect of any global downturn.
But this could change. Egypt - the most populous Arab country - has just raised petrol prices by 40pc. Rumours swept China yesterday that Beijing was preparing to lift fuel prices. While the Chinese government is unlikely to risk protests in the lead up to the Olympics, the jitters are a reminder that Asian states will have to take action sooner or later to wean their societies from subsidies.
Almost all emerging nations have to slam on the brakes in coming months to curb inflation before it starts spiralling out of control. Inflation has hit 30pc in Ukraine, 22pc in Vietnam, 8.5pc in China, and double digits across most of the Gulf.
The countries that account for the most of the growth in oil demand over the last two years are almost all nearing the limits of easy economic growth.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/22/ccoil122.xml
More on this topic:
QuoteOil Declines More Than $2 a Barrel on Signs Rally Unjustified
By Mark Shenk
May 22 (Bloomberg) -- Crude oil fell more than $2 a barrel on signs that a 16 percent run-up in prices this month isn't justified by stockpiles and demand.
Consumption averaged 20.3 million barrels a day in the past four weeks, down 1.3 percent from a year earlier, the Energy Department said yesterday. Prices climbed above $135 a barrel earlier today as OPEC ministers said they could do nothing to prevent higher prices because they are pumping at capacity.
``The fundamentals justify a price between $80 and $100,'' said Sarah Emerson, managing director of Energy Security Analysis Inc., a consulting firm in Wakefield, Massachusetts. ``The run-up in prices has more to do with institutional investors coming into the market. There's nothing to discourage them from doing so because the returns have been so high.''
Crude oil for July delivery fell $2.43, or 1.8 percent, to $130.74 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange after reaching a record $135.09. Oil is heading for the biggest one-day drop in three weeks. Prices have more than doubled over the past year.
`You have to be bullish until we see a much bigger pullback than is occurring today, and when that happens we will be looking for a correction, nothing more,'' said Eric Wittenauer, an energy analyst at Wachovia Securities in St. Louis.
Brent crude oil for July settlement declined $2.12, or 1.6 percent, to $130.58 a barrel on London's ICE Futures Europe exchange. The contract touched a record $135.14 today.
`Short-Covering'
``The recent surge is a function of short covering in the market,'' Wittenauer said. ``We are giving back some of this gain, but it's too early to call a top to the market.''
Traders who are ``short'' are betting on a decline by selling. They need to purchase contracts to close out their short positions.
Investors looking for higher returns moved to commodity markets over the past year because they outperformed stocks and bonds. The Standard & Poor's 500 Index declined 8.6 percent from a year ago to 1,392.91. The Dow Jones Industrial Average dropped 6.7 percent to 12,622.77 during the same period.
``We are not in charge anymore,'' Shokri Ghanem, Libya's top oil official, told Bloomberg Television today.
The Organization of Petroleum Exporting Countries has ``no magic solution'' to high prices, Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said today in a phone interview from Doha.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
Last Updated: May 22, 2008 14:46 EDT
http://www.bloomberg.com/apps/news?pid=20601087&sid=aalY3eyLKuto&refer=home
Quote
Too bad Raegan repealed the higher energy standards put in place by Jimmy Carter. We would be foreign-oil free by now. Not to mention no need for foreign oil, means no excuse for wars for oil.
Quote
Supply has not increased while demand has. That is a classic cause of higher prices. Couple this with a weaker dollar and, since commodities are traded in dollars, oil goes through the roof. Also there is a third cause which is speculators drawn into this mess as a hedge against inflation.
BTW, your Reagan comment is laughable. Reagan's policies of deregulating the economy and the oil industry gave us the incredibly low oil prices we all enjoyed for over a decade until quite recently. Time to drill more, defend the dollar and drive out the speculators. It is as simple as that.
Your comment on Reagan has
nothing to do with MY comment on Reagan. I don't support price controls, they are always a disaster, as Mr. Nixon proved.
I criticized Reagan for eliminating FUEL EFFICIENCY standards. Consuming so much energy from foreign sources makes us vulnerable in national defense. It also funds our enemies. As a national security issue, a reduced dependence on foreign oil is justified IMO.
As for government deregulation, Reagan also deregulated the S&L industry and a multi billion dollar taxpayer-funded bailout was required. Didn't work out so well did it?
'Drive out speculators' sounds like market controls to me, whatever happened to free markets?
Ok. I get your point. The problem is that fuel efficiency standards by themselves have nothing to do with the current rise in oil prices. America's oil use has not increased that much recently (in fact it has dropped in the last few months in response to the price rise). So, the alleged inefficiencies of America's automobiles are not the cause of the price rise.
More on the energy problems we face:
QuoteEnergy and the Executive
By PETE DU PONT
May 19, 2008
This election is notable in many ways. For the first time since 1952, neither the president nor the vice president will be his party's presidential nominee. For the first time since 1960, a sitting U.S. senator will be elected president. And for the first time ever, if the Democrats win, the next president will be female or black.
We are also at a fork in the policy road, for any of the three major candidates would lead us in very different directions on major public policy issues, from spending and taxation on the one hand, to international relations and the war on terror on the other.
Equally critical will be their direction on how we generate the energy America needs. Over the past 20 years, have our presidents and Congresses allowed us to drill for the additional offshore oil available to fuel our economy and reduce imports? No. Have they encouraged the building of nuclear power plants that would generate pollution-free energy? No. Are they now supporting the building of coal-fired power plants to generate the electricity our economy needs? No.
We have an abysmal national energy policy, and as our population grows and our economy expands, energy needs will increase. From 1980 to 2006 America's annual energy usage increased from 78 to 100 quadrillion British thermal units, and the figure is estimated to grow to 118 quadrillion BTUs by 2030. If our regressive energy production policies continue when the next administration takes office, our economy and the personal lives of Americans will be severely affected.
* * *
We have failed to increase our country's crude oil production. Domestic oil production has declined, to 1.9 billion in 2007 from 3.1 billion barrels in 1980, while imports increased to 3.7 billion barrels from 1.9 billion. We now importing about 60% of the oil we use.
One reason for the imports is that our public policy has forbidden offshore oil drilling for much of the estimated 85 billion barrels of recoverable oil and 420 trillion cubic feet of natural gas (an 18-year supply) that are on the Outer Continental Shelf, and another 10 billion barrels of oil in Alaska. Together they could replace America's imported oil for about 25 years, but the first President Bush issued a directive forbidding access to a significant portion of the Outer Continental Shelf. President Clinton extended the restriction through 2012 and vetoed legislation that would have allowed drilling in Alaska.
So America has large amounts of oil and gas, but our efforts to extract it have been significantly reduced by the federal moratorium on drilling. America remains the only nation in the world that has curtailed access to its own energy supplies/ Meanwhile China will soon begin drilling for oil off Cuba and in Venezuela.
Among the worst antienergy policies we have experienced was President Carter's 1980 "windfall profits tax" on oil companies, which reduced domestic oil production by between 3% and 6% and increased imports by 8% to 16%. Yet last week Majority Leader Harry Reid and 20 other Senate Democrats introduced a similar 25% tax.
We have failed to allow the construction of new nuclear power plants to add to the 104 that we have in operation. Nuclear power is clean and efficient, but no new nuclear plant construction has been granted permits in the past 30 years. By contrast, China plans to build 40 nuclear power reactors in the next 15 years -- two or three each year.
Nor are we fully using the huge coal resources America has. We have in the past, but an effort to prohibit them has become the environmentalists' goal. NASA climatologist James E. Hansen said last month that "building new coal-fired plants is ill conceived," and that it is time "for a moratorium on coal now with phase-out of existing plants over the next two decades." The phase-out is under way: Of the 151 coal-fired plant construction proposals in 2007, more than 60 have been abandoned as the result of environmentalist pressure. And last month Gov. Kathleen Sebelius of Kansas vetoed a bill that would have allowed the construction of two new electricity generators at an existing coal fired power plant -- because they would emit greenhouse gasses.
We have also pursued new energy policies that turn out to be mistaken. Ethanol is perhaps the best example, with congressional enactment of ethanol subsidies -- 51 cents a gallon for production of it, and a 54-cent-a-gallon import fee to keep competitive, less expensive and more environmentally friendly ethanol out of America. Congress in 2005 required 7.5 billion gallons of ethanol to be produced by 2012; and then in 2007 upped that to 36 billion gallons by 2022. President Bush enthusiastically supports subsidized ethanol, and Barack Obama believes there should be a 65-billion-gallon ethanol mandate. Only John McCain wants to end ethanol subsidies and import fees.
Ethanol was a bad idea from the start, for as The Wall Street Journal recently reported, producing one gallon of ethanol requires 1,700 gallons of water (primarily to grow corn). The journal Science recently found that "corn-based ethanol, instead of producing a 20% savings, nearly doubles greenhouse emissions over 30 years."
* * *
The good news is that an effort to reverse all these antienergy, antigrowth policies is beginning. Earlier this month Sen. Pete Domenici (R., N.M.) introduced the American Energy Production Act to expand offshore oil production, establish a leasing program to get to Alaska's untapped 10 billion barrels of oil, and support the construction of new oil refineries. The last is a particularly good idea, for it has been 30 years since we have built one in the United States.
The May 11 New York Times contained a surprisingly sensible lead editorial: "The time has come to rethink ethanol. . . . Specifically, it is time to end an outdated tax break for corn ethanol and to call a time out in the fivefold increase in ethanol mandated in the 2007 energy bill."
So perhaps America is beginning to rethink its flawed energy policies. And so it must, for our challenge is to remain competitive in a growing global economy, and that requires feeding the engines of growth with more energy. Our next president must advance drilling for offshore oil, building nuclear power and clean coal fired plants, and developing other energies such as solar and wind power. Otherwise America's people will miss future opportunities and slip backwards economically, and our country will become far worse off than it is today.
http://online.wsj.com/article/SB121105403544501297.html?mod=opinion_journal_political_diary
Quote from: vicupstate on May 22, 2008, 05:42:58 PM
Quote
Too bad Raegan repealed the higher energy standards put in place by Jimmy Carter. We would be foreign-oil free by now. Not to mention no need for foreign oil, means no excuse for wars for oil.
Quote
Supply has not increased while demand has. That is a classic cause of higher prices. Couple this with a weaker dollar and, since commodities are traded in dollars, oil goes through the roof. Also there is a third cause which is speculators drawn into this mess as a hedge against inflation.
BTW, your Reagan comment is laughable. Reagan's policies of deregulating the economy and the oil industry gave us the incredibly low oil prices we all enjoyed for over a decade until quite recently. Time to drill more, defend the dollar and drive out the speculators. It is as simple as that.
Your comment on Reagan has nothing to do with MY comment on Reagan. I don't support price controls, they are always a disaster, as Mr. Nixon proved. I criticized Reagan for eliminating FUEL EFFICIENCY standards. Consuming so much energy from foreign sources makes us vulnerable in national defense. It also funds our enemies. As a national security issue, a reduced dependence on foreign oil is justified IMO.
As for government deregulation, Reagan also deregulated the S&L industry and a multi billion dollar taxpayer-funded bailout was required. Didn't work out so well did it?
'Drive out speculators' sounds like market controls to me, whatever happened to free markets?
You can't be right because you disagree with the conclusions of "gatorworld".
Oil is down $2.00, everything is OK. Now go home.
Never mind that it's up $30.00, it went down $2.00.
There's nothing to see here, everybody go home.
Quote from: willydenn on May 05, 2008, 05:47:51 PM
Why shouln't oil companies keep thier own money? They earned it. They are publicly traded which means many "regular americans" own it. Maybe you should buy a few shares........if you don't have some already? ;D
How does one go about buy shares in gas?? What is the price for a share?
here are some of my favs to play this...
XOM, CVX, RRC, CHK, NOV
just open an acct & buy at any online discount broker/dealer.
cooley, check these out...
nat gas
http://finance.yahoo.com/q?s=rrc (i like it under $70)
http://finance.yahoo.com/q?s=chk (i like under $52)
oil
http://finance.yahoo.com/q?s=nov (under $75 is good)
http://finance.yahoo.com/q?s=PBR (under $70 is good) - combines the power of Brazil with oil
You purchase stock in the companies that sell gas.
Quote from: Coolyfett on May 23, 2008, 01:00:54 AM
Quote from: willydenn on May 05, 2008, 05:47:51 PM
Why shouln't oil companies keep thier own money? They earned it. They are publicly traded which means many "regular americans" own it. Maybe you should buy a few shares........if you don't have some already? ;D
How does one go about buy shares in gas?? What is the price for a share?
You purchase stock in the companies that sell gas. See Driven's list above.
More in ANWR here and the true effect drilling would have on the area:
ANWR = MA+NJ+RI+CT+DE; Footprint = 1/6 Dulles
(http://bp0.blogger.com/_otfwl2zc6Qc/SDZO4cu_ljI/AAAAAAAAEmE/p5Gk6dPR5ac/s400/anwr2.bmp)
ANWR's frozen desolation looks like:
(http://bp3.blogger.com/_otfwl2zc6Qc/SDZMXMu_liI/AAAAAAAAEl8/0OBkDXyw3-E/s400/anwar.jpg)
QuoteANWR's 10.4 billion barrels of oil have become hostage to the planet's saviors (e.g., John McCain, Hillary Clinton, Barack Obama), who block drilling in even a tiny patch of ANWR. You could fit Massachusetts, New Jersey, Rhode Island, Connecticut and Delaware into ANWR's frozen desolation (see bottom picture); the "footprint" of the drilling operation would be one sixth the size of Washington's Dulles airport (see top picture above, click to enlarge).
~George Will
http://mjperry.blogspot.com/
And the weakness of the dollar plays a key role in the oil price problem:
(http://s.wsj.net/public/resources/images/ED-AH587A_uncol_20080522220457.gif)
QuoteOil Is Up Because the Dollar Is Down
By DAVID T. KING
May 23, 2008
Back in December 2002, one dollar equaled one euro. But that exchange rate didn't last. The dollar was on its way down, a trend that had started more than a year earlier, and has lasted, with occasional oscillations, to this day.
On the day in 2002 that the value of a dollar was exactly the same as the value of a euro, the price of a barrel of oil was, therefore, the same in dollars and euros: about 25. Since that day, it's like the two currencies have traded on two different planets.
[Oil Is Up Because the Dollar Is Down]
Certainly energy prices have risen, regardless of what currency you use. In Europe, the price of oil has risen by 50 euros in the past five-and-a-half years. It now stands at about 75 euros per barrel, three times what it was then. But in the U.S., the price of oil has risen to over $120 per barrel, and is now almost five times what it was then.
The sole reason for this enormous difference is the incredible depreciation of the dollar against the euro. From one for one at the end of 2002, it now costs nearly $1.60 to buy a euro.
The chorus of complaints about the price of gasoline gets louder every day, and is even becoming a campaign controversy both across and within parties. The same old solutions we have heard for years are being proposed â€" conservation, increased domestic exploration, manipulations of the tax on gasoline. But no one is pointing to what is by far the biggest reason for today's $60 fill-ups. The collapse of the dollar exchange rate, alone, explains at least half of the increase in the pump price of gas over the past five years. If it wasn't for the falling value of the dollar, the price of gasoline wouldn't be an issue.
Maybe the reason nobody talks about it is because they don't think you can do anything about it, or that it's somehow too esoteric to talk about exchange rates. But, economically speaking, what is more fundamental to us than the value of our currency? Why have we allowed the value of a dollar to fall by half?
The conventional wisdom, followed by U.S. administrations for the past 30 years, is that "the market" knows what it's doing in setting these rates, based on "the fundamentals" of the economy. This is, by the way, more or less the same market â€" the same band of traders, both on and off Wall Street â€" who, based on some view of the fundamentals, valued Bear Stearns at $100 a share one year ago. As the prevailing view of its fundamentals rapidly shifted, Bear's stock value collapsed, but it hurt only Bear's stockholders. The collapse of the dollar hurts everyone â€" a lot.
The fact is that the dollar exchange rate is way out of line with the fundamental strength of our economy, and even with such well-known fundamentals as relative inflation rates.
But when it stays out of line for too long, it starts to feed back on the fundamentals themselves. The dollar has been so weak for so long that it's now causing inflation even at a time of recession. It's to blame for the excessive price of gasoline, and now is pushing dangerously into wholesale price inflation, based on the most recent data published by the Labor Department.
Will the market, accommodated by hands-off policy makers, now say that we need more depreciation to offset the inflation that depreciation itself has created?
We don't need gas tax holidays. Exchange rates can be managed. We need exchange rate policy.
Mr. King, a former chief of the New York Federal Reserve's Industrial Economies Division, is a managing consultant for Emerging Markets Group Ltd., in Arlington, Va.
http://online.wsj.com/article/SB121150088368615927.html?mod=opinion_main_commentaries
QuoteBlame Washington, Not Oil Companies
By INVESTOR'S BUSINESS DAILY | Posted Thursday, May 22, 2008 4:20 PM PT
Energy: Senate Democrats, dragging executives from five major U.S. oil companies before them for a second day, say they're alarmed by our "failed" oil markets. What they should be is ashamed.
IBD Series: Breaking The Back Of High Oil
After all, it's mostly the fault of the Congress that we're in this mess. True, the Big 5 announced profits of $36 billion in the first quarter, as oil breached $100 a barrel and just kept going. This prompted nothing but contempt from Illinois Sen. Richard Durbin this week: "Where is your corporate conscience?" he asked the oil executives, forced to sit and listen.
Others concluded that this must be a market problem. "We need to get prices under control," said Sen. Herb Kohl of Wisconsin. "We can only conclude that the oil markets have failed."
Well, markets have failed. But the failure is due to Congress' refusal to let oil companies drill on federal lands, thereby cutting sharply into our supply of crude as world demand grows and prices soar both here and abroad.
Congressional ignorance of basic laws of supply and demand is at once bizarre, breathtaking and frightening. For example, the American Thinker Web site this week took note of a speech delivered by New York Democratic Sen. Chuck Schumer on May 13. In it, he urged the U.S. to force Saudi Arabia to pump a million barrels a day more of oil â€" which Schumer claimed would slash the price of crude by $25 a barrel.
What Schumer didn't say was that 1 million barrels is exactly the amount of extra oil the U.S. would today be pumping if President Clinton hadn't vetoed drilling in the Arctic National Wildlife Refuge in 1995. Despite this, Schumer still opposes drilling in ANWR.
As for those massive oil profits, Democrats want to slap Big Oil with a "windfall profits tax." In fact, since 2002 the U.S. oil and natural gas industry has earned about 8.1 cents per dollar of sales â€" exactly the same as all U.S. manufacturing, excluding autos. Not much of a windfall.
To listen to Congress, you'd think oil companies don't pay taxes. Nothing could be further from the truth. In 2006 alone, according to the American Petroleum Institute, U.S. oil companies paid some $138 billion in taxes to the IRS â€" and that doesn't include special oil severance, sales and use taxes companies also had to pay.
The total effective tax rate on oil is about 40%. This compares with a top income tax rate of 35% for all corporations. If anything, Big Oil is overtaxed.
A recent study by Ernst & Young notes that the same Big 5 oil companies that Congress harshly criticized this week earned $662 billion from 1992 to 2006. A lot of money, to be sure. But keep in mind that they invested $765 billion over the same stretch to bring us more oil from ever smaller pieces of the Earth's surface.
We are in the midst of a major global oil-supply crunch â€" one that can only be broken by Congress and other governmental bodies around the world taking concrete action.
A report released Thursday by the Department of the Interior notes that most of the oil and 40% of the natural gas under public lands in the U.S. is off-limits to drilling. That's about 19 billion barrels of oil and trillions of cubic feet of natural gas.
A separate report, this one from the International Energy Agency, warned of a looming global supply crunch resulting from the failure of governments â€" not private oil companies â€" to invest more or open up their lands for exploration and development.
One of the oil business's dirty secrets is that only 6% of all reserves are controlled by investor-owned oil companies such as those demonized by Congress. The rest are controlled by governments, one way or another. And 11 of the 15 largest oil companies are government-owned. Government is the problem, not "Big Oil."
That's why this ridiculous blaming of oil companies must stop, and why the companies must be allowed to get back into the business of pumping oil. Once this happens, we'll find that the markets that ignorant and demagogic politicians called "failed" will once again turn out plentiful energy at prices people can afford.
http://ibdeditorials.com/IBDArticles.aspx?id=296349069670261
QuoteA report released Thursday by the Department of the Interior notes that most of the oil and 40% of the natural gas under public lands in the U.S. is off-limits to drilling. That's about 19 billion barrels of oil and trillions of cubic feet of natural gas.
So there are 19 billion barrels of oil off limits in the United States because of environmental concerns.
Considering that the U.S. consumes 20,687,000 barrels per day, those 19 billion barrels will last 918 days, or 2.5 years. This does not sound like such a great solution.
If you think alternative fuel choices that are equivalent or better in power than current oil are just going to magically appear by uniting Congress efforts and then be the magic pill for our energy needs, I have a 1,500 foot bridge in Arizona I can sell you. Congress has been completely inept in creating an energy policy for the country that will effectively and efficiently use all our resources. More interference and meddling by the government is only going to prolong our misery.
To honestly believe that hindering oil companies is the best policy to make alternative choices the primary choices in energy wreaks of lunacy.
And as far as "destroying wildlife", Stephen, that argument is false, delusionary, and tired. Seeing nature thrive around the Pipeline and other drilling areas totally negates that argument. Besides, I think that photo of the ANWR area speaks for itself. I hardly think they'll damage anything that basically contains nothing.
Quote from: Charleston native on May 25, 2008, 02:25:41 PM
And as far as "destroying wildlife", Stephen, that argument is false, delusionary, and tired. Seeing nature thrive around the Pipeline and other drilling areas totally negates that argument. Besides, I think that photo of the ANWR area speaks for itself. I hardly think they'll damage anything that basically contains nothing.
(http://www.greenpeace.org.uk/files/images/oceans/pollution/prestige_oil_spill_victim.jpg)
(http://www.pacificspirit.org/news/uploaded_images/NYtimes-734136.jpg)
(http://www.lebanonlinks.com/photos/photo_oil_spill_eddeh_sands_3.jpg)
How would an oil spill off the coast of Florida affect tourism?
(http://home.cogeco.ca/~youngfox69/LEBANESEoil.jpg)
Quote from: Lunican on May 24, 2008, 02:20:43 PM
QuoteA report released Thursday by the Department of the Interior notes that most of the oil and 40% of the natural gas under public lands in the U.S. is off-limits to drilling. That's about 19 billion barrels of oil and trillions of cubic feet of natural gas.
So there are 19 billion barrels of oil off limits in the United States because of environmental concerns.
Considering that the U.S. consumes 20,687,000 barrels per day, those 19 billion barrels will last 918 days, or 2.5 years. This does not sound like such a great solution.
I believe those are the known reserves. Since the areas are currently off limits to additional exploration, there is doubtless many more billions of barrels. Also, by increasing the supplies you would lower prices. This was sort of the point.
Quote from: stephendare on May 24, 2008, 02:24:06 PM
Quote from: Lunican on May 24, 2008, 02:20:43 PM
QuoteA report released Thursday by the Department of the Interior notes that most of the oil and 40% of the natural gas under public lands in the U.S. is off-limits to drilling. That's about 19 billion barrels of oil and trillions of cubic feet of natural gas.
So there are 19 billion barrels of oil off limits in the United States because of environmental concerns.
Considering that the U.S. consumes 20,687,000 barrels per day, those 19 billion barrels will last 918 days, or 2.5 years. This does not sound like such a great solution.
Lunican, it totally isnt. That is unless you mean a solution to the sucky electoral odds faced by the heavily oil identified republican party.
Its just another delay.
It would be different if these titans of the sacred public trust of capitalism were doing something intelligent like massively infusing their R and D departments for alternative energy options the way that T. Boone Pickens is and the Rockefellers are demanding, but they arent.
They literally have no plans beyond the present.
Stephen: My plan is to go nuclear in a big (and safe) way until something better comes along. You then continue to develop electric cars. Eventually, the batteries will be such that they can be cheaply mass produced and will be able to exclusively power cars. In the meantime however, we use the oil we have at our disposal.
So much for the myth that the oil companies arent paying their fair share of taxes:
(http://bp3.blogger.com/_otfwl2zc6Qc/SDjh_su_lnI/AAAAAAAAEmk/IMbTsnTbXzQ/s400/oiltax.bmp)
QuoteInvestor's Business Daily -- In 2006 alone, according to the American Petroleum Institute, U.S. oil companies paid some $138 billion in taxes to the IRS â€" and that doesn't include special oil severance, sales and use taxes companies also had to pay.
Internal Revenue Service (Table 6, p. 41) -- In 2005 (the most recent year for which data are available), the bottom 75% of all individual taxpayers (about 100 million taxpayers out of 132 million total) paid about $130.9 billion in income taxes. Adjusting by the recent average of about $5 billion in annual increases in tax revenue from individuals, it is estimated that the bottom 75% of individual taxpayers (more than 100 million individuals) paid about $136 billion in 2006.
Bottom Line: In 2006, U.S. oil companies paid more in corporate income taxes to the IRS ($138 billion) than the individual taxes paid by the more than 100 million individual taxpayers in the bottom 75% of all individual taxpayers (estimated to be $136 billion, see chart above).
http://mjperry.blogspot.com/
Quote from: stephendare on May 26, 2008, 01:46:58 AM
Now the trick is to get your ubermenschens to give you their money so as to initiate Project Nuclear Ragnarok.
Thats the rub.
In the meantime, to continue the metaphor, we seem hellbent on an American Gotterdammerung.
Many power companies want to go nuclear but the enviro-crazies will not stand for it. And, the last time I visited France, they seemed quite content with their safe nuclear power.
Quote from: stephendare on May 26, 2008, 01:51:18 AM
well, the oil companies already have 33 million acres of access to sensitive lands that they presently arent drilling.
As Bill Nelson pointed out in todays Times Union editorial, any oil that is presently in the ground, undrilled is at least 10 years away from a refinery. So its not really any better of an argument than initiating petroleum alternatives that are non polluting.
Before anyone starts crying for the oil companies and their totally bogus limitations on oil drilling sites, its important to remember that all of the bellyaching on this score is totally based on the model that we are still using oil at the present rate in 10 years.
Its a blind alley. Let the bastards exploit the 33 million acres they already have permission to drill.
1) Oil companies need to have access to the land under which oil is located. Allowing them to drill where no oil is located is not exactly helpful.
2) Had the bill to allow drilling in ANWAR not been vetoed by Clinton 10 years ago, it would be pumping oil right now. The solution here is not to prevent drilling but to accelerate it. 10 years will pass quickly but national poverty can last significantly longer.
Quote from: rolfinney on May 25, 2008, 10:55:52 PM
You post these as if they are everyday occurences. I'm curious. What are the dates these photos were taken? Also, how many drilling sites do you think there are across the world that have NEVER had even a single spill incident? I would say greater than 95% of the sites. Probably closer to 99% would be my guess.
I would agree with you that probably more than 95% of oil is moved without any kind of release. I think if oil spills were any more frequent there wouldn't even be a debate about whether to open up protected land.
Check this website for a list of oil spills.
http://www.marinergroup.com/oil-spill-history.htm
I would have posted it here but it is far too long.
According to Soros now, there is a bubble in oil prices. And, according to midway, this must mean that there is a bubble in oil prices. ;)
Anyway, here is the excerpt:
QuoteGeorge Soros: rocketing oil price is a bubble
By Edmund Conway, Economics Editor
Last Updated: 12:53am BST 27/05/2008
Speculators are largely responsible for driving crude prices to their peaks in recent weeks and the record oil price now looks like a bubble, George Soros has warned.
The billionaire investor's comments came only days after the oil price soared to a record high of $135 a barrel amid speculation that crude could soon be catapulted towards the $200 mark.
In an interview with The Daily Telegraph, Mr Soros said that although the weak dollar, ebbing Middle Eastern supply and record Chinese demand could explain some of the increase in energy prices, the crude oil market had been significantly affected by speculation.
"Speculation... is increasingly affecting the price," he said. "The price has this parabolic shape which is characteristic of bubbles," he said.
The comments are significant, not only because Mr Soros is the world's most prominent hedge fund investor but also because many experts have claimed speculation is only a minor factor affecting crude prices.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/26/cnsoros126.xml
Quote from: Lunican on May 26, 2008, 09:49:36 PM
Quote from: rolfinney on May 25, 2008, 10:55:52 PM
You post these as if they are everyday occurences. I'm curious. What are the dates these photos were taken? Also, how many drilling sites do you think there are across the world that have NEVER had even a single spill incident? I would say greater than 95% of the sites. Probably closer to 99% would be my guess.
I would agree with you that probably more than 95% of oil is moved without any kind of release. I think if oil spills were any more frequent there wouldn't even be a debate about whether to open up protected land.
Check this website for a list of oil spills.
http://www.marinergroup.com/oil-spill-history.htm
I would have posted it here but it is far too long.
Wow, from what you were referring to, I thought oil spills occurred every month. Of course, you seem to be forgetting the fact that millions of tons of natural oil actually seeps into the ocean from the ocean floor everyday. And yet, the ocean is still able to provide life for billions of aquatic forms of life.
How are the spill sites doing today? The Alaska site from the Valdez incident is actually thriving again as are other sites. Nature is resilient.
Does that mean we can carelessly drill and transport oil? Of course not, but you can't make your argument the end statement to inhibit drilling. Accidents do happen, and many companies are mostly proactive in ensuring that incidents like the ones mentioned are not frequent.
Quote from: Charleston native on May 27, 2008, 08:47:00 AM
Wow, from what you were referring to, I thought oil spills occurred every month. Of course, you seem to be forgetting the fact that millions of tons of natural oil actually seeps into the ocean from the ocean floor everyday. And yet, the ocean is still able to provide life for billions of aquatic forms of life.
Considering that there were more than 12 oil spills per year for the last 8 years, they do happen every month. At least.
Quote from: Lunican on May 27, 2008, 09:38:42 AM
Considering that there were more than 12 oil spills per year for the last 8 years, they do happen every month. At least.
Right. And millions of tons of oil get pumped into the ocean every day, a far larger frequency than the accidents mentioned. As rolfinney said, your argument is weak.
QuoteNeedless to say, it is not hurting our anemic tourism industry either
How could it? It's simple, it is impossible to destroy our micro-tourism on the Riverwalk along a highly polluted river with a "highly polluted river". If this keeps up, walking on water will be no miricle in Jacksonville!Ocklawaha
Quote from: rolfinney on May 27, 2008, 10:24:07 AM
Lunican,
I am curious if the sources you are quoting are including "spills" like the one in downtown Jacksonville recently. This was hardly major at all and the environmental engineers said it will take two days to clean up and they see no effect on the aquatic wildlife in the area. Needless to say, it is not hurting our anemic tourism industry either. :)
Check the list, they appear to involve hundreds of thousands of gallons per incident.
Quote from: Charleston native on May 27, 2008, 10:29:54 AM
Quote from: Lunican on May 27, 2008, 09:38:42 AM
Considering that there were more than 12 oil spills per year for the last 8 years, they do happen every month. At least.
Right. And millions of tons of oil get pumped into the ocean every day, a far larger frequency than the accidents mentioned. As rolfinney said, your argument is weak.
.
Not as weak as dismissing one of the largest ecological disasters in history by claiming that nature loves pipelines.
Quote from: Charleston native on May 25, 2008, 02:25:41 PM
And as far as "destroying wildlife", Stephen, that argument is false, delusionary, and tired. Seeing nature thrive around the Pipeline and other drilling areas totally negates that argument. Besides, I think that photo of the ANWR area speaks for itself. I hardly think they'll damage anything that basically contains nothing.
The arguments against drilling in preserved areas can't be overlooked because you suddenly can't afford gas.
Quote from: Lunican on May 27, 2008, 11:35:00 AM
Not as weak as dismissing one of the largest ecological disasters in history by claiming that nature loves pipelines.
This is a complete fabrication, twisting of words, and/or manipulation of what I said. I never dismissed the oil spill; my point was that the oil spill in itself is insignificant in comparison to what naturally occurs everyday. I also never said nature loves pipelines; my point here is that if man sets up drilling and transport correctly, he can minimize the impact on nature and even help it thrive.
Quote
The arguments against drilling in preserved areas can't be overlooked because you suddenly can't afford gas.
So what are we supposed to do: allow the majority of free men to go into poverty based on a premise that accidents can occur? Besides, I'm not overlooking the arguments; I think the majority of common sense people understand that if we are to allow drilling, we do it in a way that minimizes environmental impact, especially since we have the technology to do so. To just leave the area as is when we know it has resources that can help us
is an exceptionally weak argument. Actually, it's pretty foolish.
Quote from: Lunican on May 27, 2008, 09:38:42 AM
Quote from: Charleston native on May 27, 2008, 08:47:00 AM
Wow, from what you were referring to, I thought oil spills occurred every month. Of course, you seem to be forgetting the fact that millions of tons of natural oil actually seeps into the ocean from the ocean floor everyday. And yet, the ocean is still able to provide life for billions of aquatic forms of life.
Considering that there were more than 12 oil spills per year for the last 8 years, they do happen every month. At least.
12 yearly spills worldwide or in the US?
That would be worldwide, River.
Of course, who cares that the US has the least frequent amount of accidents and is the most capable of cleaning them up. ::)
CN: The real truth is many enviro-socialists hate capitalism and modernity and wish to return us to the imagined paradise of the pre-industrial era. You can never make oil drilling safe enough for them because they do not want us to use oil period. So, it isnt about the oil spills at all.
If that is 12 spills worldwide per year, I am going to let go a big yawn right now. :D
Quote from: RiversideGator on May 27, 2008, 12:07:10 PM
CN: The real truth is many enviro-socialists hate capitalism and modernity and wish to return us to the imagined paradise of the pre-industrial era. You can never make oil drilling safe enough for them because they do not want us to use oil period. So, it isnt about the oil spills at all.
Oh, absolutely River. But even if their true agenda was legitimate concern for oil spills, there is plenty of evidence that demonstrates the resiliency of nature and man's ability to minimize their impact on nature.
I guess that's the problem; we're addressing solutions and refutations on a disingenuous argument. I wish they would actually just come out and say that what they wish for is pre-industrialism.
Quote from: RiversideGator on May 27, 2008, 12:08:11 PM
If that is 12 spills worldwide per year, I am going to let go a big yawn right now. :D
I guess they need to start making daily articles with titles like this: "Atlantic Ocean Fissure Releases Another Million Tons of Natural Oil Today"! ;)
Charleston Native and RiversideGator, you guys seems terrified of some kind of impeding pre-industrial age. It sounds kind of like a kooky conspiracy theory though. Where do you guys hang out? I haven't had anyone warn me about this (besides you two).
Quote from: Charleston native on May 27, 2008, 12:03:00 PM
Quote from: Lunican on May 27, 2008, 11:35:00 AM
Not as weak as dismissing one of the largest ecological disasters in history by claiming that nature loves pipelines.
This is a complete fabrication, twisting of words, and/or manipulation of what I said. I never dismissed the oil spill; my point was that the oil spill in itself is insignificant in comparison to what naturally occurs everyday. I also never said nature loves pipelines; my point here is that if man sets up drilling and transport correctly, he can minimize the impact on nature and even help it thrive.
So what are we supposed to do: allow the majority of free men to go into poverty based on a premise that accidents can occur? Besides, I'm not overlooking the arguments; I think the majority of common sense people understand that if we are to allow drilling, we do it in a way that minimizes environmental impact, especially since we have the technology to do so. To just leave the area as is when we know it has resources that can help us is an exceptionally weak argument. Actually, it's pretty foolish.
I'm not advocating for or against drilling. I'm pointing out that your dismissal of the risks associated with drilling is foolish. These protected areas were designated as such for reasons you fail to accept as legitimate.
These aren't decisions that can be made with 'common sense' alone. Suggesting common sense will bring us quickly to the answer on this suggests that the answer is obvious, when it is not.
I don't think that you have to worry about "common sense".
And as long as there are no oil spills near RiversideGator World or in Charleston Native Land, all is OK. That oil spill in Alaska didn't bother them a single bit. So some birds got a little dirty.
Only downside was that it slightly adversely affected Exxon earnings because the bleeding heart liberals made them clean it up when mother nature could have done the job just as well.....maybe better.
Lunican, why do you hate Amerika?
And when the impending pre industrial age arrives, I can convert RG's Lincoln Navigator into a water powered grist mill.
This is a small section from a position paper put out by CRA International titled,
Economic Impacts of Proposed House/Senate Energy Legislation on the U.S. Economy:
QuoteIMPACTS ON SPECIFIC METRICS OF ECONOMIC PERFORMANCE Specific impacts of the legislation on economic performance include the following: • Additional taxes on the oil and natural gas industry combined with additional restrictions on drilling could result in an estimated average decline in domestic oil production of roughly 4% over the 2010â€"2020 period, and an estimated average decline in domestic natural gas production of 2% relative to baseline levels. • The proposed legislation is projected to result in significantly higher costs across a wide array of goods and services, especially for transportation fuels. As a result, the demand for petroleum products is estimated to decline by roughly 18 percent in 2020 and by one-third in 2030 relative to baseline levels. Overall, U.S. transportation fuel consumption is projected to decline due to significantly higher costs faced by end-users. • By 2030, the proposed legislation is projected to cause a net loss of roughly 4.9 million total jobs from baseline levels. While all regions of the country would be adversely impacted, the Southeast, areas around the Great Lakes, and Texas-Oklahoma regions would be disproportionately affected. • By that year, the proposed legislation is estimated to diminish the average American household’s annual purchasing power by approximately $1,700. • Aggregate investment is projected to fall by 3.4% from baseline levels by 2030. As with the employment losses, the impact would be uneven both across industries and among regions. The pattern resembles that of estimated employment losses.
Page iv
Economic Impacts of Proposed House/Senate Energy Legislation on U.S. Economy
November 2007 CRA International
• By 2020, GDP, a commonly used measure of total economic activity, is estimated to be roughly 1.7% below the baseline and by 2030 is estimated to drop to approximately 4.0% below baseline levels. Petroleum refining, commercial transportation services, motor vehicles, electric generation and energy intensive manufacturing would be among the disproportionately affected sectors. The proposed legislation would restrict the supply of energy available to the U.S. economy and would likely increase energy costs. Higher energy costs would likely reduce total consumption, employment, investment, and economic output. The link between energy supply and the economic performance is key to understanding the pattern of the study results and central to an assessment of the implications of the proposed legislation. .
Page v
The question I see is how long the American people will put up with the hand wringing effeminates that now control our Congress and are willing to wait decades , if ever, to see their alternative fuels dreams come to fruition as they whine their disengenuous concerns about not seeing any oil for ten years if we start drilling right away. Maybe the oil companies will eventually have to hire Blackwater or others to provide security and just go start working where the reserves are at. Maybe the then Commander in Chief and representative from both houses of Wussgress can just come out and "taaaallllllkkkk" it out.
The above report is very good and can be read at www.crai.com
Are you referring to S.2191 in this report?
Oil prices are down nearly 10% in just the past 2 weeks:
QuoteOil, Gasoline Fall After U.S. Fuel Supplies Rise, Demand Drops
By Mark Shenk
June 4 (Bloomberg) -- Crude oil fell more than $2 a barrel and gasoline dropped the most in two months on a larger-than- expected U.S. fuel-supply gain and signs demand will weaken because of increasing prices.
Gasoline stockpiles rose 2.94 million barrels last week, the biggest gain since February, the Energy Department reported today. Supplies of distillate fuel, including heating oil and diesel, climbed 2.28 million barrels, the most since July. Fuel demand was down from a year ago, the department's report showed.
``It's pretty clear that demand will be very poor this summer,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``Refiners are making the fuel but nobody wants to buy it.''
Crude oil for July delivery fell $2.01, or 1.6 percent, to settle at $122.30 a barrel at 2:43 p.m. on the New York Mercantile Exchange, the lowest close since May 6. Futures, which reached a record $135.09 a barrel on May 22, are up 85 percent from a year ago.
Gasoline for July delivery declined 15.74 cents, or 4.7 percent, to settle at $3.1951 a gallon in New York, the biggest drop since March 17. Futures touched a record $3.52 on May 29.
Last week's 1.4 percent gasoline inventory gain to 209.1 million barrels left supplies 3.8 percent higher than during the same week last year. Stockpiles were expected to increase 825,000 barrels, according to the median of 14 estimates in a Bloomberg News survey.
Distillate inventories climbed 5.7 percent to 111.7 million barrels in the past four weeks. Supplies were expected to grow 1.68 million barrels, according to the analyst survey.
Refinery Operation
Refineries operated at 89.7 percent of their capacity last week, up 1.8 percentage points from the week before and the highest since the week ended Jan. 4, the department said. The profit margin, or crack spread, for making three barrels of crude oil into one of heating oil and two of gasoline jumped 46 percent in May.
``U.S. refiners should continue increasing operating rates in the weeks ahead because margins have improved a great deal,'' said Brad Samples, commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``Product markets are going to loosen up a little bit.''
Crude-oil inventories fell 4.8 million barrels to 306.8 million barrels last week. Analysts were split over whether crude-oil supplies rose or fell in the Bloomberg News survey.
``It's the products that are in the driver's seat,'' Samples said. ``In large part it was the products that led crude oil higher and now the reverse is occurring.''
Consumption Decline
Fuel consumption averaged 20.4 million barrels a day in the four weeks ended May 30, down 1.1 percent from a year earlier, the Energy Department said.
``You are starting to see consumers respond to these high prices,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``We are getting growing evidence that demand is taking a hit. I think we will test $120 before the week is over.''
U.S. gasoline use fell 4.7 percent last week from a year earlier as motorists cut consumption, MasterCard Inc. said yesterday.
http://www.bloomberg.com/apps/news?pid=20602013&sid=afM3KOfPAXkE&refer=commodity_futures
decent correction. i am waiting a little longer to buy something like the brazilian oil company.
Looks like we will get a new oil refinery in South Dakota. This should help gas prices in the US when it comes online. It will process oil from the massive Bakken Formation in North Dakota - an area soon to be the American Saudi Arabia of oil:
QuoteSouth Dakota Voters Approve What Could Be First New U.S. Oil Refinery in Decades
Wednesday, June 04, 2008
ELK POINT, S.D. â€" Voters in Union County on Tuesday approved rezoning for what would be the first new U.S. oil refinery in more than 30 years.
With all 13 precincts reporting, 3,932 voters, or 58 percent, endorsed their county commission's rezoning of almost 3,300 acres north of Elk Point for the $10 billion refinery while 2,855, or 42 percent, opposed it.
The ballot measure garnered solid support in the southern part of the county, with the Dakota Dunes precinct voting in favor 1,017-237 and the one containing North Sioux City approving the ordinance 492-184.
Most rural precincts strongly rejected the rezoning, but they didn't have the population numbers to overcome support in the county's largest towns.
Also backing the refinery were voters in the city of Alcester and in the city of Elk Point, which hosted several hours-long, controversial public hearings on the project.
Preston Phillips, a project executive for Texas-based Hyperion Resources, said he was ecstatic with the outcome.
"We'll continue to work with everyone in the county," he said. "We want to be a good corporate citizen. We want to be a good corporate neighbor."
Despite the approval of the rezoning, Phillips said Elk Point still is not the only site being considered and that the site selection process will continue.
"Any big project like this has to have options," he said.
Hyperion Resources had said it would leave Union County without a fight if voters rejected the rezoning.
Jason Quam of the group Citizens Opposed to Oil Pollution said late Tuesday his group will sit back and evaluate its next steps.
"It's going to be a long road before anything's done on it," he said of the refinery.
The vote was just one stop in a long process and must go through numerous environmental permitting steps, he added.
Quam also said he doubts the company has the financing to get the refinery built.
Mike Curran, who voted against the zoning change, said the company offered few specifics and instead embarked on a public relations pitch to sell the refinery. He said that when a representative called asking for his support, they couldn't give direct answers to any questions.
"As far as I see they never told as anything about it," said Curran, who lives just east of Elk Point.
Kim Hall said she was thinking about jobs when she cast her "yes" vote in downtown Jefferson Tuesday afternoon.
She said a project of that size would bring not just refinery and construction jobs but also would spawn new positions for teachers, police and other professionals. Teens graduating high school in Union County need good-paying jobs if they're going to settle in the area, she said.
"Everybody leaves, and it would be nice to have something for them to put to use their degrees and stay in the area," Hall said.
Elk Point Mayor Isabel Trobaugh said it was odd to have such a spotlight cast on her small town, but she said she was impressed with the high voter turnout.
"We're just a quiet little town," she said. "This is really exciting."
Trobaugh said the refinery would bring needed jobs to the county and that she didn't think it would harm the environment.
She said she talked to the mayors of Ponca City, Okla., and El Dorado, Kan. -- both towns with oil refineries -- and both assured her their communities had clean air and water.
The refinery is proposed for land just east of Interstate 29 between state highways 48 and 50.
Company executives said it would help the United States reduce its dependence on overseas oil. The refinery would process 400,000 barrels of thick Canadian crude a day,
The company petitioned to put the issue on the ballot after the Union County Commission approved the rezoning in March.
Supporters cited economic development benefits from the refinery. Hyperion officials said the project would mean 1,800 permanent jobs and another 4,500 construction jobs over a four-year period.
Hyperion called it a "green refinery" and said it would produce ultra-low sulfur gasoline and diesel and be among the cleanest and most environmentally friendly in the world.
Opponents raised environmental and quality-of-life concerns, but one project executive said the refinery will have the lowest emission levels of any U.S. refinery and will improve the quality of life for the area.
According to an air quality permit application filed with the state, the center each year would emit nearly 2,000 tons of carbon monoxide, 773 tons of nitrogen oxides, more than 1,000 tons of particulate matter, 863 tons of sulfur dioxide and 473 tons of volatile organic compounds. It would also generate 17.2 million metric tons of carbon dioxide each year.
The South Dakota governor's office has supported the proposal.
Opponents have noted the high-level support and the backing from economic development groups but said the local people would be the ones deciding the rezoning.
Critics of the proposal hit hard on the quality of life issue, saying an oil refinery would produce millions of pounds of toxins during its lifetime. They also said it seemed as if the state and local governments allied themselves with Hyperion and had not asked critical questions.
Plans called for construction to begin in 2010 and last about four years.
http://www.foxnews.com/story/0,2933,363121,00.html
btw...WSJ had 2 articles yesterday about gasoline demand is now down 4% (for last weekcompared to 1 year ago). said it would take oil getting back down to $100 for gas to get back down to $3.50 though...the good part of all this though is that we should not be seeing another huge, fast runup in prices of gas like we did recentl - at least for a little bit.
Well I can't wait for it to go back down...I miss Costco. I would go every other week, now once a month and recently had to join Sam's club because it is closer and I HATE Sam's club :-(
I guess I shouldn't complain too much since my daily commute is from my bed, to the coffee pot, to the computer.
Looks like that new oil refinery RG is anxiously awaiting has already started working its magic.
QuoteGas backs off record: The national average price for a gallon of regular unleaded gas fell to $3.986 from the previous day's record of $3.989, AAA reported. Gas prices had set new records for 28 of the previous 29 days.
http://money.cnn.com/2008/06/06/markets/markets_newyork/index.htm
If the legislature in this country had any balls, they'd allow more drilling and refineries. I promise you'd be seeing more "magic" with falling gas prices afterwards.
QuoteIf the legislature in this country had any balls, they'd allow more drilling and refineries.
CN, I'm afraid this present Congress and Senate is so full of hand-wringing bitches who are premising the decisions of this country's energy policy on politically acceptable, unproven scientific theories, party and special interest pressures, and emotions, that the next two years, at the least, will be one ride in hell.
I was waiting for RG's daily oil price update but it hasn't happened yet so I will post...
QuoteOil surges $11 to record $138
Crude skyrockets in largest single-day jump ever as dollar slides and a Wall Street report predicts oil will hit $150-a-barrel within a month.
NEW YORK (CNNMoney.com) -- Oil prices shot up nearly $11 a barrel and settled Friday at a record $138.54 on geopolitical jitters, a dollar decline and a forecast that oil would hit $150 by July 4.
Friday's spike in the July contract for light crude on the New York Mercantile Exchange marks the largest single-day increase in oil prices on record. The contract hit an intraday record of $139.12, breaking the previous trading record of $135.09.
http://money.cnn.com/2008/06/06/news/economy/gas_prices/index.htm?postversion=2008060621
Quote from: jaxnative on June 07, 2008, 11:49:52 AM
QuoteIf the legislature in this country had any balls, they'd allow more drilling and refineries.
CN, I'm afraid this present Congress and Senate is so full of hand-wringing bitches who are premising the decisions of this country's energy policy on politically acceptable, unproven scientific theories, party and special interest pressures, and emotions, that the next two years, at the least, will be one ride in hell.
Amen, man. I couldn't have said it better.
QuoteOil prices shot up nearly $11 a barrel and settled Friday at a record $138.54 on geopolitical jitters, a dollar decline and a forecast that oil would hit $150 by July 4.
Amazing how the current supply situation, the lack of American political and econonmic willpower, and a weak and misguided Congress and Senate, can provide the opportunity for such blatant and egregious manipulation of the market. Looks like the speculators covered all their losses of the previous days in one fell swoop down at the enery casino.
Now that $4.00 a gallon gasoline is a reality and we are almost into the third quarter of 2008, it's time for my semi annual review of prognostication from the $4.00 a gallon oil thread:
Quote from: RiversideGator on March 07, 2008, 12:19:31 PM
This is being partially driven by market speculation in commodities much like the net stock bubble and the real estate bubble. All of these clowns buying gold, for example, as if it were a real investment, like stock in an actual company, drive up the price. If you look at other commodities which are less commonly traded, there prices are not up nearly as much in percentage terms. The dollar being weak right now is a problem but I believe that the feds should and might intervene to put an end to the currency speculation. The same sort of speculative fever has driven the dollar down. The fundamentals for the US economy long term are very strong so the dollar cannot stay down for long. And, there is no shortage of the commodities in question so the run up in prices is simply not sustainable. So, the dollar will be back and the commodity prices will also come crashing down to earth before too long too.
Expect oil to decline to $60.00 a barrel any time now. Anyone for oil puts?
Sorry it took me so long to respond boys but I was out of town. I would say that I was largely correct though. Most other commodities, excepting oil, have come back down to earth somewhat since I made that statement. Oil has also been unhinged from fundamentals too. Demand is decreasing now in America, the Asian countries which formerly subsidized oil consumption are raising prices or dropping the subsidy altogether and the high prices are encouraging additional exploration and pumping. Remember the massive Bakken Formation is being drilled now and there have been other large finds recently. It takes some time for these to start pumping but they will and you will see it as the prices come down. In short, demand is reducing and supplies will soon be rising. So, I look for oil to decline in the longer term to probably under $100 per barrel.
BTW, here is a good article which makes the same point:
Quote
GET READY FOR THE OIL-PRICE DROP
By ALAN REYNOLDS
June 6, 2008 -- THE price of crude oil has jumped as high as $135 lately, up from $87 in early February. The news encouraged some Wall Street analysts to suggest oil might approach $200 before long. In fact, that's quite impossible: The world economy can't handle current energy prices, much less a big increase.
Which in turn means that oil prices will fall.
Market analysts often claim oil prices are almost entirely determined by supply. Demand is said to be insensitive ("inelastic") to price. The standard example is that many Americans have to drive to work and most gas-guzzling SUVs will still be on the road even if the affluent few can trade theirs for a Prius. Whatever the price, we'll pay it.
This idea rests on two fallacies. The first is to exaggerate the United States' importance when it comes to ups and downs in worldwide oil demand. In fact, America is using no more oil than we did in 2004.
The second fallacy is to greatly exaggerate the importance of passenger cars in the United States. It's true that Americans are driving less and buying four-cylinder cars - but that's not where we should be looking for serious "demand destruction."
Two-thirds of petroleum in the United States is used for transportation - but half of the transportation sector's fuel flows into commercial trucks, trains, buses, airplanes and ships. As a result, only 44 percent of each barrel of oil is used to produce gasoline in this country, and some of that gasoline fuels business - delivery vans, landscapers' trucks, fishing boats, industrial and farm machinery, etc.
Most crude oil is used to produce diesel fuel for trucks, ships and trains, heavy fuel oil for industry, aviation fuel, asphalt, home heating oil, propane, wax, and innumerable petrochemical products ranging from detergents and drugs to synthetic fabrics and plastic.
In short, a huge share of crude oil is used to produce and distribute industrial products. That explains why the price of oil is extremely cyclical - that is, it tends to rise during economic booms and fall during contractions. It dropped 44 percent in the last recession (from November 2000 to November 2001), 48 percent from October 1990 to January 1992 - and 71 percent from July 1980 to July 1986.
Oil prices have a huge impact on producers' cost of production - profits and losses - not just on consumers' cost of living.
Firms that can't raise prices will find profit margins squeezed - and will have to cut back on production and jobs. Even if some producers of energy-intensive products can raise prices enough to cover higher energy costs, they'll nonetheless sell fewer of their products because of those higher prices. So they too will have to cut back on production and jobs.
Nine out of 10 previous postwar recessions began shortly after a big spike in the price of oil. Yet those recessions always slashed oil prices dramatically. People who have been predicting both a nasty US recession and $200 oil prices are contradicting themselves.
Recent news reports have expressed surprise that the US economy appears much stronger than the famously gloomy predictions at the start of the year. Indeed, the surprising endurance of US manufacturing and exports is one reason oil prices rose as long as they did.
But note that a US recession isn't required to bring down the price of oil. All that's needed is industrial stagnation or decline in many other countries.
In the United States and Britain, industrial production is nearly flat - only 0.2 percent higher than it was a year ago. In many other countries, however, industrial production has dropped over the past 12 months. It's down by 0.7 percent in Japan, 1.1 percent in Austria, 2.5 percent in Italy and Denmark, 2.9 percent in Canada, 5.4 percent in Greece, 5.7 percent in Singapore and 13.3 percent in Spain.
In April, industrial production also fell in India and China. Shrinking industry around the world shrinks demand for energy in general - and for oil in particular.
When the price of anything gets unbearably high, it discourages demand. The resulting drop in sales, in turn, causes inventories to pile up and the price to come down. That has proven true of overpriced houses - and it will likewise prove true of overpriced oil.
Alan Reynolds is a senior fellow with the Cato Institute and the author of "Income and Wealth."
http://www.nypost.com/seven/06062008/postopinion/opedcolumnists/get_ready_for_the_oil_price_drop_114188.htm
BTW, it is a bit amusing to be lectured on this by people such as midway who subscribe to the kook fringe Peak Oil theory. PO followers actually wish that we would run out of oil so we could be plunged into a new dark age in which they fantasize that their in depth knowledge of back yard gardening will help them to survive while the rest of us starve. ::) :D
I suggest y'all read the reports from actual experts. The US has over a trillion barrels in oil reserves. We have only to begin drilling them for oil to come back to reality. And, a stong dollar policy wouldnt hurt either. ;)
This map illustrates the sheer lunacy of the Democrat energy "policy":
(http://bp1.blogger.com/_otfwl2zc6Qc/SE0wQyJnr6I/AAAAAAAAEyM/qB1woRiwGvk/s400/oilmap.jpg)
More on this:
QuoteHuge basins of untapped oil can be found on federal lands throughout the United States, according to a new report from the federal government. But much of it cannot -- and may never be -- recovered, because it lies under national parks and national monuments, or it is subject to environmental laws and restrictions that make drilling prohibitive.
The report, which was produced at the request of Congress by the U.S. Department of Interior's Bureau of Land Management (BLM), said there are 279 million acres under federal management where oil and gas could potentially could be extracted.
More than half of it is totally off-limits to drillers.
"The total onshore resource is 31 billion barrels," said BLM's lead scientist Richard Watson, who authored the report. "Of that, 19 billion barrels are currently inaccessible or 62 percent. A little over 2 billion barrels, or 8 percent, is accessible under what we call standard lease terms."
If you add in the 85.9 billion barrels of oil that lie offshore, as determined by the Interior Department's Minerals Management Service, there are 117 billion barrels of oil on lands owned or managed by the U.S. government.
But all expansion of offshore oil recovery is currently off-limits.
Adding in what's available on privately held land, the figure rises to 139 billion barrels of oil, according to the government - more than the known oil reserves of Iran, Iraq, Russia, Nigeria or Venezuela, respectively.
The biggest untapped land-based oil deposit in the United States lies within ANWR, the Artic National Wildlife Refuge, which is currently off-limits.
"We estimate there is something on the order of 7.7 billion barrels in that one area alone," Watson told Cybercast News Service.
But setting aside Alaska, there is untapped oil on federal lands all across the United States, the government reported, with oil pockets found in Oregon, Washington state, Montana, Wyoming, Florida -- even in the Appalachian Mountains.
"In the lower 48 states, there are about 12 billion barrels onshore," Watson noted.
In California, for instance, where oil producers have been drilling for over 100 years, there are still large amounts available -- much of it situated near scenic Santa Barbara.
"In the Ventura basin, there are 281 million barrels under federal ownership," Watson said. "Forty-eight percent of that is inaccessible. The rest of it is accessible with varying restrictions on access."
Exploration restricted
What makes much of the California oil off-limits is the fact that the bulk of it lies under a national forest.
"You've got a wilderness area, a condor sanctuary, there are a couple of islands offshore that are part of a national park," Watson said.
Watson said Congress not only wanted to know how much oil there is on federal lands, it wanted to know what laws and regulations restrict exploration. Much of the oil is off-limits because of the National Environmental Policy Act (NEPA), the Clean Water Act, the Endangered Species Act and the National Historic Preservation Act.
Oil producers, meanwhile, say that even when these laws don't forbid drilling, they are sometimes onerous, making it very difficult -- or unprofitable -- to get to the oil.
"NEPA, for instance, was originally supposed to be focused only on major federal actions," said Dan Naatz, vice president of federal resources for the Independent Petroleum Association of America.
"But now, through court cases and regulatory rulings, it is to the point where basically anytime an oil or gas well is proposed on federal land, producers either have to do an environmental impact statement, or a environmental assessment to comply with NEPA," Naatz added.
If producers don't engage in the costly and complicated studies, they will end up in court, being sued by environmental groups, he said.
The report also noted that a large amount of oil -- a little over 9 billion barrels, or 30 percent of the total -- is available for tapping, with restrictions.
"These restrictions are usually in place to mitigate possible environmental damage or to prevent destruction of wildlife migration or nesting," Watson said.
One restriction is the "no-surface occupancy stipulation,"which means drillers are not actually allowed onto the protected land.
Naatz said producers could recover more of the oil, if they were allowed to use directional drilling more often, which is frequently limited by regulations.
With directional drilling, producers obtain the rights to drill on land adjacent to the forbidden turf, drill down a short way, then drill horizontally - if they are allowed to.
"Directional drilling has revolutionized the industry," he said. "You don't ever want to tap into other areas that are not your property, but directional drilling has allowed the industry to reduce its footprint. From one well-pad, you can get a number of wells drilled."
Another obstacle the report noted is the process of obtaining drilling permits, Naatz said.
"The permitting process is very slow, very cumbersome," he said. "What happens is that the window of opportunity to operate on some lands is very limited. Usually you are talking about areas where they have winter-use restrictions, where there can be no activity, to allow for migratory birds or animals."
In many cases, Naatz said, the window for drilling narrows to as little as one month a year.
"In the oil and gas business, that makes it virtually impossible to access those areas," he added.
Environmental groups like the Sierra Club, meanwhile, are largely dismissive of the BLM report.
"It appears to be more of same kind of thing we've had all along from the Bush administration, which wants to exploit the land, rather than protect it," noted Kristina Johnson, a Sierra Club spokeswoman.
In 2000 and again in 2005, Congress passed laws requiring the Department of Interior to inventory the oil resources that could be found both onshore and offshore in U.S. territory - and any restrictions which bar their recovery.
http://www.cnsnews.com/ViewNation.asp?Page=/Nation/archive/200806/NAT20080606c.html
I am just wondering why you are so willing to drill for more oil. I read the articles you posted but don't you think it would just be a short-term solution? What about future generations? Although maybe you only care about the world while you are personally living on it.. :-\ Why don't you take all your time and energy trying to research some new alternatives to using a NON-RENEWABLE resource (Non-renewable meaning "a resource which cannot be replaced once it is used up") instead of posting about how awesome it would be to destroy our coastline. You should take a minute to care about the world you live in! This Earth is not OURS for the taking - we share it with millions of other species.
(http://circadianshift.net/images/bunnies_driving_400x300.jpg)
You are speaking of a fantasy world. Right now we have no real alternative. We must drill for oil or we will have economic collapse. Finding alternative methods of transportation and of energy generation are long term solutions. We should be doing both. And, please dont try to say that I am for "destroy[ing] our coastline". This is an absolute phantom issue. Offshore drilling is very safe and reliable and can be done out of sight of shore. If you dont think it is safe, try and find an article about the leaks associated with the many oil rigs hit by Katrina. Bet you wont find one because there were no significant leaks to speak of.
Here is a story to support my statement:
QuoteHurricane Katrina, Rita Oil Spills Mostly Minor, Didn't Reach Shore
WASHINGTON â€" Hurricanes Katrina and Rita caused 124 spills of petroleum products into the waters of the Gulf of Mexico, almost all of them minor and none resulting in pollution reaching shore, the government reports.
The Interior Department, it its revised assessment, said the 124 spills from drilling rigs and pipelines totaled 17,652 barrels, with six of the spills releasing between 1,000 and 2,000 barrels of product.
The releases included both oil and condensate, a liquefied form of natural gas. There are 42 gallons to a barrel.
The report by Interior's Minerals Management Service called the spills "minimal" and said that releases were kept in check because safety valves installed below the ocean floor shut down drilling wells before the storms hit.
"Oil losses were mostly limited to the oil stored on the damaged structures or contained in the individual damaged pipeline segments," said the report.
"There was no account of spills ... that reached the shoreline, oiled birds or mammals, or involved any discoveries of large volumes of oil to be collected or cleaned up," the report said.
http://www.enn.com/top_stories/article/4886
That was actually detrimental to your case, counselor.
Hey, RG, what's the problem? The worse the economy gets, the more apartment houses you can buy. The opportunities for you to amass even greater wealth on account of the desperation of the masses will be endless.
Quote from: Lunican on June 09, 2008, 07:35:44 PM
That was actually detrimental to your case, counselor.
Perhaps you should read the clip again. There were no significant spills and no significant harm to nature caused by one of the greatest US natural disasters of the last 50 years.
Quote from: Midway on June 09, 2008, 09:17:47 PM
Hey, RG, what's the problem? The worse the economy gets, the more apartment houses you can buy. The opportunities for you to amass even greater wealth on account of the desperation of the masses will be endless.
I want everyone to share in a higher standard of living. This is why I am a capitalist.
"A rising tide lifts all boats" -- John F. Kennedy.
BTW, I wonder if Obama will use this quote as he pretends that he is the second coming of JFK? ;)
"none resulting in pollution reaching shore" .... meaning there is still pollution. so just because you can't see it, it's not real? out of sight out of mind. great logic.
Can you please post evidence of ecological harm either on the land or in the sea resulting from Katrina hitting the oil rigs then?
So there were no significant spills to speak of (besides 17,652 barrels) during Katrina (about a one week time period) when the oil rigs were shut down.
Are we allowed to consider oil spills outside of your highly specific time frame?
Everything you say is so highly qualified that it means almost nothing.
QuoteCrude oil and natural gas seeps naturally out of fissures in the ocean seabed and eroding sedimentary rock. These seeps are natural springs where liquid and gaseous hydrocarbons leak out of the ground (like springs that ooze oil and gas instead of water). Whereas freshwater springs are fed by underground pools of water, oil and gas seeps are fed by natural underground accumulations of oil and natural gas (see USGS illustration). Natural oil seeps are used in identifying potential petroleum reserves.
As pointed out by the National Research Council (NRC) of the U.S. National Academy of Sciences, "natural oil seeps contribute the highest amount of oil to the marine environment, accounting for 46 per cent of the annual load to the world's oceans. -- Although they are entirely natural, these seeps significantly alter the nature of nearby marine environments. For this reason, they serve as natural laboratories where researchers can learn how marine organisms adapt over generations of chemical exposure. Seeps illustrate how dramatically animal and plant population levels can change with exposure to ocean petroleum".
NOAA describe a natural seepage area in California: "One of the best-known areas where this happens is Coal Oil Point along the California Coast near Santa Barbara. An estimated 2,000 to 3,000 gallons of crude oil is released naturally from the ocean bottom every day just a few miles offshore from this beach".
Are these natural fissures suddenly appearing in places where there is no current risk of an oil slick?
Why are you talking about Katrina? Are you a real person?
(http://pangea.stanford.edu/~jshragge/OilWar/Jolene_files/image004.jpg)
Oil cleanup in the city of Meraux, La
Quote from: Lunican on June 10, 2008, 01:15:06 AM
So there were no significant spills to speak of (besides 17,652 barrels) during Katrina (about a one week time period) when the oil rigs were shut down.
Are we allowed to consider oil spills outside of your highly specific time frame?
Everything you say is so highly qualified that it means almost nothing.
This really isnt complicated except that you are trying to make it complicated as part of a liberal shell game. There were some spills. But, it wasnt that much and there was no permanent damage to the ecology. I dont know how to make it any clearer than that.
Quote from: Lauren on June 10, 2008, 12:01:51 PM
Why are you talking about Katrina? Are you a real person?
(http://pangea.stanford.edu/~jshragge/OilWar/Jolene_files/image004.jpg)
Oil cleanup in the city of Meraux, La
That picture doesnt exactly prove your point. And, I am quite real, thank you. :D
That picture could be from anywhere within the city. It has nothing to do with oil spills in the ocean. I can understand RG's frustration when items like this are used to prove an agenda point. Off shore oil spills are a smaller risk to the ecology than the natural ocean releases, that is a fact. There are currently offshore platforms all over CA; the map posted indicates the potentiality of new drilling. Santa Barbara has several platforms off shore easily seen from the coast line.
It always amazes me to hear people get so upset over oil platforms, or oil drilling on shore when the refineries, storage, and shipping are the main causes of long-term ecological damages. Avila Beach/Bay of San Luis Obispo in California is a perfect example of slow but steady leakage which destroyed the beaches and immediate bay area. Thankfully Shell ponied up the money and cleaned the entire area, including replacement of sand/shore line. Ya'll who are so worked up over offshore drilling should look into the above, THIS is the biggest risk to our coastlines and wildlife, off shore platforms do less harm then mother nature herself.
Oil platforms good....mother nature bad.
(http://i67.photobucket.com/albums/h300/twiggy318/carbunnies.jpg)
Woohoo!!
Quote from: Midway on June 10, 2008, 08:05:16 PM
Oil platforms good....mother nature bad.
Oil platforms necessary. Mother nature largely unaffected.
QuoteFinding alternative methods of transportation and of energy generation are long term solutions. We should be doing both.
Okay, so how about we do this. We allow drilling off the coast of Florida, but beyond the sight of shore. At the same time, we require progressively higher energy efficiency standards in Autos and homes, that will require a super-majority vote of Congress to repeal. We require a minimum percentage of oil profits be channelled into funding alternative fuel development. Also, the feds will provide tax credits for alternative fuel research and development. The feds will also reverse the current ratio of funding between highways and mass transit alternatives.
The fear I have is that we will allow drilling in these restricted areas, while doing nothing to gain greater efficiencys or to develop alternatives. In other words, instead of going on a diet, we just take out the waist of our pants, and start driving Hummers again.
Whichever candidate can convince me they would support and enact something similiar to what I describe above, will be the one I vote for. Given that would be a 180 degree change from the current administration, I tend to think it is more likely to be Obama than McCain, but my mind is open to what each has to say.
Congress has just mandated higher fuel efficiency for vehicles and Bush signed the bill.
We need more nuclear as soon as possible in addition to additional drilling and encouraging the development of alternate sources of energy and transportation.
QuoteWe require a minimum percentage of oil profits be channelled into funding alternative fuel development.
So we now start making more laws to confiscate business profits? Why don't we channel the automobile industry profits? Why not take a percentage of everyone's paycheck and pass it along to the alternative fuelers? Why not take some of McDonalds and Burger King's profits and pass them along to the diet companies? I wonder who the hell is going to pay for those confiscated profits? If the alternative fuels industry is so promising I'm sure the venture capitalists and investors will be lining up to get in on the action.
It's damn disheartening to see the American spirit dying as the hand-wringing effiminates take control of our government and the mommy government crowd continues to grow.
Quote from: jaxnative on June 11, 2008, 05:43:44 PM
QuoteWe require a minimum percentage of oil profits be channelled into funding alternative fuel development.
So we now start making more laws to confiscate business profits? Why don't we channel the automobile industry profits? Why not take a percentage of everyone's paycheck and pass it along to the alternative fuelers? Why not take some of McDonalds and Burger King's profits and pass them along to the diet companies? I wonder who the hell is going to pay for those confiscated profits? If the alternative fuels industry is so promising I'm sure the venture capitalists and investors will be lining up to get in on the action.
It's damn disheartening to see the American spirit dying as the hand-wringing effiminates take control of our government and the mommy government crowd continues to grow.
The auto companies are broke, in case you haven't noticed. The oil companies are profiting off the situation, and they will have a replacement for the revenue FROM oil IF they develop the alternatives TO oil. In other words, THEY will still have a business model and WE will have freedom from foreign oil.
The Middle East has our security and our economy in a headlock as long as we are dependent on their oil. I am willing to pay for the war on terror, but I'll be damn if I am going to continue to pay for BOTH sides.
If Hitler had control over us to this degree, do you think FDR would have done nothing about it?? Would he have said "go shopping"? No, he would have asked this country to unite, and sacrifice, and defeat our enemy. In other words, the very things he DID do. The very things that made defeat of the Axis powers our finest hour as a nation. THAT was the American SPIRIT at it's noblest. Of course, FDR wasn't an oil man was he? Nor was his VP.
We don't expect tank production to get venture capital funding. This isn't just about the free market supplying Hummers to the compensating masses. It is about national security, with a cleaner environment as a side benefit.
I'll tell YOU what is effiminate--not being willing to change our habits, and lifestyle for the COMMON good and defense of our country. No one will ever call this generation the 'greatest' anything, except spoiled brats.
Methinks comparing the challenge of WWII to the present energy crisis is a BIT of a stretch. I will tell YOU what, WWII was definately a challenge for the government and the people. The main difference here is that the government just needs to get the hell out of the way and let some good ole American know how and motivation supply the proven and reliable raw materials this nation desperately needs for it's economy and security. YOU change your lifestyle all you want. In the American spirit, I'll continue to make my own decisions.
Excellent piece in the WSJ today on the absurdity of prohibiting drilling in the US:
QuoteDrill! Drill! Drill!
June 12, 2008; Page A15
Charles de Gaulle once wrote off the nation of Brazil in six words: "Brazil is not a serious country." How much time is left before someone says the same of the United States?
One thing Brazil and the U.S. have in common is the price of oil: It is priced in dollars, and everyone in the world now knows what the price is. Another commonality is that each country has vast oil reserves in waters off their coastlines.
Here we may draw a line in the waves between the serious and the unserious.
Brazil discovered only yesterday (November) that billions of barrels of oil sit in difficult water beneath a swath of the Santos Basin, 180 miles offshore from Rio de Janeiro and Sao Paulo. The U.S. has known for decades that at least 8.5 billion proven barrels of oil sit off its Pacific, Atlantic and Gulf coasts, with the Interior Department estimating 86 billion barrels of undiscovered oil resources.
When Brazil made this find last November, did its legislature announce that, for fear of oil spills hitting Rio's beaches or altering the climate, it would forgo exploiting these fields?
Of course it didn't. Guilherme Estrella, director of exploration and production for the Brazilian oil company Petrobras, said, "It's an extraordinary position for Brazil to be in." Indeed it is.
At this point in time, is there another country on the face of the earth that would possess the oil and gas reserves held by the United States and refuse to exploit them? Only technical incompetence, as in Mexico, would hold anyone back.
But not us. We won't drill.
California won't drill for the estimated 1.3 billion barrels of recoverable oil off its coast because of bad memories of the Santa Barbara oil spill â€" in 1969.
We won't drill for the estimated 5.6 billion to 16 billion barrels of oil in the moonscape known as the Arctic National Wildlife Refuge (ANWR) because of â€" the caribou.
In 1990, George H.W. Bush, calling himself "the environmental president," signed an order putting virtually all the U.S. outer continental shelf's oil and gas reserves in the deep freeze. Bill Clinton extended that lockup until 2013. A Clinton veto also threw away the key to ANWR's oil 13 years ago.
Our waters may hold 60 trillion untapped cubic feet of natural gas. As in Brazil, these are surely conservative estimates.
While Brazilians proudly embrace Petrobras, yelling "We're Going to Be No. 1," the U.S.'s Democratic nominee for president, Barack Obama, promises to impose an "excess profits tax" on American oil producers.
We live in a world in which Russia's Vladimir Putin and Venezuela's Hugo Chávez use their vast oil and gas reserves as instruments of state power. Here, Nancy Pelosi and Harry Reid use their control of Congress to spend a week debating a "climate-change" bill. This they did fresh off their subsidized (and bipartisan) ethanol fiasco.
One may assume that Mr. Putin and the Chinese have noticed the policy obsessions of our political class. While other nations use their oil reserves to attain world status, we give ours up. Why shouldn't they conclude that, long term, these people can be taken? Nikita Khrushchev said, "We will bury you." Forget that. We'll do it ourselves.
Putin intimidates Ukraine, Georgia, the Baltic states and Poland with oil and gas cutoffs, while Chávez uses petrodollars to bankroll Colombian terrorists. Cuba plans to exploit its Caribbean oil fields within a long tee shot of the Florida Keys with help from India, Spain, Venezuela, Canada, Norway, Malaysia, even Vietnam. But America won't drill. Democratic Sen. Bill Nelson of Florida said just last month he's afraid of an oil spill. Katrina wrecked the oil rigs in the Gulf with no significant damage from leaking oil.
Some portion of the current $4-per-gallon gasoline may be attributable to the Federal Reserve's inflationary monetary policy or even speculators. But we can wave goodbye to the $1.25/gallon gasoline that in 1990 allowed a President Bush to airily lock away the nation's oil and gas jewels. This isn't your father's world of energy. New world powers are coming online fast, and they need energy. We need to get back in the game.
The goal shouldn't be "energy independence," a ridiculous notion in an economically integrated world. It's about admitting the need to strike a balance between the energy and security realities of the here-and-now and the potentialities of the future. Some of our best and brightest want to pursue alternative energy technologies, and they should be encouraged to do so, inside market disciplines. But let's at least stop pretending the rest of the world is going to play along with our environmentalist moralisms.
The Democrats' climate-change bill collapsed last week under the weight of brutal cost realities. It was a wake-up call. This is the year Americans joined the real world of energy costs. Now someone needs to explain to them why we â€" and we alone â€" are sitting on an ocean of energy but won't drill for it.
You'd think the "national security" nominee, John McCain, would get this. He's clueless â€" a don't-drill zombie. We may mark this down as the year the U.S. tired of being a serious country.
http://online.wsj.com/article/SB121322872046666269.html
Oh, and this is for Lauren:
(http://s.wsj.net/public/resources/images/OB-BP670_oj_wl0_20080611200225.jpg)
(http://bp3.blogger.com/_otfwl2zc6Qc/SFET7hH6RHI/AAAAAAAAE0c/YroP0fsI5gU/s400/oilcartoon.jpg)
(http://bp0.blogger.com/_otfwl2zc6Qc/SFEUUv2L9cI/AAAAAAAAE0k/_1hoIQ3Lk7o/s400/anwrcartoon.jpg)
Quote from: vicupstate on June 11, 2008, 04:40:58 PM
QuoteFinding alternative methods of transportation and of energy generation are long term solutions. We should be doing both.
Okay, so how about we do this. We allow drilling off the coast of Florida, but beyond the sight of shore.
China already is drilling 50 miles off shore
Quote from: jaxnative on June 11, 2008, 10:57:50 PM
Methinks comparing the challenge of WWII to the present energy crisis is a BIT of a stretch. I will tell YOU what, WWII was definately a challenge for the government and the people. The main difference here is that the government just needs to get the hell out of the way and let some good ole American know how and motivation supply the proven and reliable raw materials this nation desperately needs for it's economy and security. YOU change your lifestyle all you want. In the American spirit, I'll continue to make my own decisions.
If that is the case, then STOP calling it a
WAR on Terror !!! Are we at war or is that just a political slogan?
This isn't just about paying more for gas. It is about our dependence on our enemies, for both national security and economic stability. It's having to deal with the Middle East (not to mention Venezuela) for our very economic survivial. That region has been a thorn in our side, for my entire 44 years of life. Isn't it time to ditch that tar baby once and for all?
If it were only a matter of scarcity, the law of supply and demand WOULD be sufficient. But that is not all that is at stake.
The Free Enterprize system is a wonderful thing, but it is not respondnent to national security or enviromental protection. Believe it or not, some things don't just come down to dollars and cents or our personal 'wants'. The free enterprize system didn't win WW2 or any war, or put a man on the moon, or turn a nation of renters into a nation of homeowners, and it did not educate the masses.
Your 'I can do whatever I want, and to hell with the consequences for my world or my nation' is an entitlement mentality that illustrates what a weak willed nation we have become. I guess the phrase 'Ask not what your country can do for you, ask what you can do for your country', is like speaking a foreign language to some people.
Just like the coming crisis in SSN/Medicare, the SOONER we start to really deal with this problem, the less pain it will involve. We didn't solve it in the '70's, we didn't solve it in the '80's, we didn't solve it in the '90's. By waiting and doing nothing, the consequences have become greater than ever. Maybe we need to FINALLY demand that our political system face this problem head-on and solve it.
No one is saying we have to ration food and supplies or buy war bonds, like the greatest generation did. Just that we agree to certain changes in lifestyle, so we can be a freer and more secure nation. If that means drilling in new areas, while
ALSO requiring more efficiency and doing more to find alternatives, then it's worth it.
Believe it or not, some people actually believe that scarifice and unity for the common good actually builds CHARACTER. Character in the nation and the individuals that live in it. THAT is why Obama has such resonance.
Quote from: RiversideGator on June 12, 2008, 10:35:17 AM
Oh, and this is for Lauren:
(http://s.wsj.net/public/resources/images/OB-BP670_oj_wl0_20080611200225.jpg)
Oh, and this is for RiversideGator
(http://i67.photobucket.com/albums/h300/twiggy318/dolphins.jpg)
Good response. :D
Looks like public opinion is not with the Democrats on this one:
(http://s.wsj.net/public/resources/images/ED-AH712A_1dril_20080611203616.gif)
Quote$4 Gasbags
June 12, 2008
Anyone wondering why U.S. energy policy is so dysfunctional need only review Congress's recent antics. Members have debated ideas ranging from suing OPEC to the Senate's carbon tax-and-regulation monstrosity, to a windfall profits tax on oil companies, to new punishments for "price gouging" â€" everything except expanding domestic energy supplies.
Amid $135 oil, it ought to be an easy, bipartisan victory to lift the political restrictions on energy exploration and production. Record-high fuel costs are hitting consumers and business like a huge tax increase. Yet the U.S. remains one of the only countries in the world that chooses as a matter of policy to lock up its natural resources. The Chinese think we're insane and self-destructive, while the Saudis laugh all the way to the bank.
There are two separate moratoria on offshore drilling: One is a ban that Congress has attached to every budget since 1982, and the other is a 1990 executive order that President Bush has waived in only a few cases. Republicans made failing attempts to overcome both when they ran Congress, but current Democratic leaders and their green masters remain adamantly opposed. The new political opportunity amid record prices is to convince enough rank-and-file Democrats that they'll suffer at the polls if they don't break with this antiexploration ideology.
While energy "independence" is an impossible dream, there's no doubt the U.S. has vast undeveloped fossil-fuel deposits. A tiny corner of the Arctic National Wildlife Refuge contains an estimated 10.4 billion barrels of oil and would be the largest producing oil field in the Northern Hemisphere. Yet the Senate blocked that development as recently as last month. The Outer Continental Shelf is estimated to contain some 86 billion barrels of oil, plus 420 trillion cubic feet of natural gas. Yet of the shelf's 1.76 billion acres, 85% is off-limits and 97% is undeveloped.
Engineers recently perfected refining solid shale rock into diesel or gas, which may amount to the largest oil supply in the world â€" perhaps as much as 1.8 trillion barrels in the American West. That's enough to meet current U.S. oil demand for more than two centuries. Yet as late as 2007, Democrats attached a rider to the energy bill that prohibits leasing the federal interior lands that contain at least 80% of America's oil shale. The key vote was cast by liberal Senator Ken Salazar from Colorado, of all places.
These supply guesses are probably conservative, because the only way to know for sure is to drill exploratory wells. Yet most of Alaska and offshore are cut off even from modern seismic testing. Many areas haven't been examined since the 1960s, when exploration technology was far more primitive. This has led to the believe-it-or-not situation in which the Chinese are prepping to drill in Cuban waters less than 60 miles off the Florida coast. American companies are banned from drilling in American waters nearby.
Yes, we know, increased drilling is no energy cure-all; new projects take about a decade to come on line. Then again, more than a few experts say that new production could affect price as the market perceives a new U.S. seriousness to increase supplies. Part of today's futures speculation is based on the assumption that supplies will remain tight for years to come, even as Chinese and Indian demand surges.
Nor would merely repealing the exploration bans be enough. Between 2000 and 2007, the drilling of exploratory oil wells climbed 138%, but over the same period domestic crude oil production decreased 12.4% and fell to the lowest levels since 1947. Refineries for gasoline are stretched to the limit, but multiple regulatory barriers impede new construction or even expansions at existing facilities. Then there is the inevitable lawsuit downpour from the environmental lobby.
Democrats are going to have to grow up. The oil-rich areas they want to leave untouched are accessible with minimal environmental disturbance, thanks to modern technology. Hurricanes Katrina and Rita flattened terminals across the Gulf of Mexico but didn't cause a single oil spill. As for anticarbon theology, oil will be indispensable over the next half-century and probably longer, like it or not. Airplanes will never fly on woodchips, and you won't be able to charge your car with a windmill for some time, if ever.
Public anger over fuel prices could hardly come at a worse time for the GOP, since voters tend to blame a flagging economy on the party that occupies the White House. But the opportunity is to offer a reform alternative to Barack Obama and the high-price energy status quo he embraces. It looks like the public is increasingly ready for . . . change. In a May Gallup poll, 57% favored "allowing drilling in U.S. coastal and wilderness areas now off limits." Just 20% blamed the increase in gas prices on Big Oil, like Mr. Obama does.
Recent weeks have seen some GOP stirrings on Capitol Hill, but John McCain has so far refused to jettison his green posturings, such as his belief in carbon caps and his animus against offshore development. A good reason for a rethink would be $4 gas. At present, it is charitable to call Mr. McCain's energy ideas incoherent, and it may cost him the election.
See all of today's editorials and op-eds, plus video commentary, on Opinion Journal.
http://online.wsj.com/article/SB121322599645166029.html
It's too bad the Republicans are so inept that they are unable to overcome these effeminate drilling bans.
Agreed. Hopefully common sense will prevail and drilling will be allowed in the near future.
When are the people going to say "ENOUGH":
QuoteJunk Science: Greens Thwart Gasoline Production
Thursday, June 12, 2008
By Steven Milloy
Four-plus-dollar gasoline is forcing Americans to realize that we need increased domestic oil production to meet our ever-growing demand for affordable fuel. But even if the greens lose the political battle over drilling offshore and in places like the Arctic National Wildlife Refuge, they nevertheless are way ahead of the game as they implement a back-up plan to make sure that not a drop of that oil ever eases our gasoline crunch.
The Sierra Club and the Natural Resources Defense Council, or NRDC, successfully pressured the U.S. Environmental Protection Agency to block ConocoPhillips’ expansion of its Roxana, Ill., gasoline refinery, which processes heavy crude oil from Canada, the Wall Street Journal reported on Monday.
The project would have expanded the volume of Canadian crude processed from 60,000 barrels per day to more than 500,000 barrels a day by 2015. After the Illinois EPA had approved the expansion, the green groups petitioned the federal EPA to block it, alleging ConocoPhillips wasn’t using the best available technology for reducing emissions of sulfur dioxide and nitrogen oxides.
Apparently, the plant’s planned 95 percent reduction in sulfur dioxide emissions and 25 percent reduction in nitrogen oxides wasn’t green enough. NRDC’s opposition is quite ironic since ConocoPhillips and the activist group actually are teammates in the global warming game. Both belong to the U.S. Climate Action Partnership, a coalition of eco-activist groups and large companies that is lobbying for global warming regulation.
So even though ConocoPhillips is aiding and abetting the NRDC to achieve the green dream of absolute government control over the U.S. energy supply, the enviros still are in take-no-prisoners mode, refusing to allow the expansion of a single refinery.
Imagine what the rest of us can expect from the greens.
Meanwhile, in California, green groups are working through the state attorney general’s office to block the upgrade of the Chevron refinery in the city of Richmond. The $800 million upgrade essentially would expand the useable oil supply by permitting the refinery to process lower-quality, less-expensive crude oil.
California Attorney General, ex-Gov. and climate crusader Jerry Brown claims the upgrade will produce an additional 900,000 tons of greenhouse gas emissions per year. But Chevron says the upgrade actually will reduce the emissions by 220,000 tons.
Whose figure is closer to the truth?
It’s hard to know for sure at this point, but it’s worth noting that material false statements made by Chevron are prosecutable under the federal securities laws and California state law, while Brown and the activists pretty much can say whatever they want without legal accountability.
Whatever the facts are, Brown and the city of Richmond insist that Chevron eliminate 900,000 tons of greenhouse gas emissions so that the upgrade will be "carbon neutral." While the greens remain vehemently opposed to the project, it seems their plans for blocking the refinery might go awry as Brown and the local government eventually may side with Chevron rather than the greens, but only because the company has deep pockets and is open to being shaken down.
Brown and the city have proposed that Chevron ensure that half the total emissions-reduction projects be undertaken on-site at the refinery and the other half be done either in the city of Richmond itself or elsewhere in California.
Translating the latter part of this "offer that can’t be refused:" Chevron essentially must purchase 450,000 tons of "carbon credits" annually from the city of Richmond or the state. As the street value of carbon credits is about $10 per ton, Chevron is being "green-mailed" to the tune of perhaps $4.5 million per year to upgrade its refinery â€" amounting to perhaps a 1 percent annual "tax" on the gains in gross revenue produced by the upgrade. And the local government officials are not the least embarrassed about this extortion.
"When you’re dealing with a refinery where the project will cost close to a billion dollars and someone like Chevron with tremendous resources, that’s not a constraint, so they should do everything possible," an unidentified state official told Carbon Control News in a June 9 article.
The farcical nature of the entire transaction is underscored by that state official’s apparent lack of understanding about how greenhouse gas-induced global warming is supposed to work.
The official told Carbon Control News that the greenhouse gas emission reductions "are vital to protect low-income minority communities in the Richmond area, which already suffer disproportionate pollution impacts."
Climate alarmism, of course, is based on the notion of global emissions causing global warming, not local emissions causing local warming; moreover, the allegation that low-income minority populations are disproportionately harmed by industrial emissions â€" the basis of the so-called "environmental justice" concept of the 1990s â€" hasn’t stuck since no scientific evidence supports it.
Though green and local government shenanigans can be a source of endless amusement, let’s get back to the main point. As the 2005 hurricane season dramatized, oil production, itself, is only one factor in determining gasoline supply and prices.
Damage to Gulf Coast refineries by hurricanes Katrina and Rita reduced gasoline supplies and increased prices worldwide â€" a real problem given that U.S. refineries operate at or near capacity thanks to other green constraints.
We may produce all the oil we need, but if we can’t refine it, then it won’t do much for reducing gasoline supply problems. So while working to expand domestic drilling, we’ll simultaneously need to expand domestic refining capacity.
It will be quite the Pyrrhic victory to finally produce oil from ANWR and then not be able to do anything with it.
More evidence that a speculative bubble is at least partially driving the increased oil prices:
QuoteOil Rally of 697% Surpassed Dot-Com Craze in Speculators' Mania
By Michael Patterson and Elizabeth Stanton
June 13 (Bloomberg) -- The rally that drove oil to a record $139.12 a barrel last week surpassed the gains in Internet stocks that preceded the dot-com crash in 2000.
Crude rose 697 percent since trading at $17.45 a barrel on the New York Mercantile Exchange in November 2001, and reached 28 record highs this year. The last time a similar pattern was seen in equities was eight years ago, when Internet-related stocks sent the Nasdaq Composite Index up 640 percent to its highest level ever, according to data compiled by Bloomberg and Bespoke Investment Group LLC.
The Nasdaq tumbled 78 percent from its March 2000 peak, erasing about $6 trillion of market value, as investors concluded that prices weren't supported by profits at companies such as Broadcom Corp. and Amazon.com Inc. Billionaire investor George Soros and Stephen Schork, president of Schork Group Inc., say oil is ready to tumble because prices aren't justified by supply and demand.
``There's nothing different between this mania, the dot-com mania, the real estate mania, the Dow Jones mania of the 1920s, the South Sea bubble and the Dutch tulip-bulb mania,'' said Schork, whose Villanova, Pennsylvania-based firm advises the Organization of Petroleum Exporting Countries, Wall Street firms and oil companies on the outlook for energy prices. ``History repeats itself over and over and over again.''
Oil climbed on growing demand from China and India, whose economies expanded the past seven years at an average annual pace of 10.2 percent and 7.3 percent, respectively. Supply disruptions in Nigeria and Iraq and declining production in Russia also boosted prices. Investors added about $250 billion to commodity index trading strategies since 2003, according to Mike Masters, president and founder of Masters Capital Management, a St. Croix- based hedge fund.
Money Flow
Money is flowing into oil as the global economy slows. The worst U.S. housing slump since the 1930s and more than $390 billion of writedowns and credit losses at banks will slow global growth to 2.7 percent this year from 3.7 percent in 2007, according to the World Bank.
The U.S. economy's expansion may slow to 1.3 percent this year from 2.2 percent in 2007, dragging down oil demand by 240,000 barrels a day, according to economists surveyed by Bloomberg and Energy Department data. In China, the second- biggest fuel consumer after the U.S., economic growth may fall to 10.1 percent from 11.9 percent, the Bloomberg survey shows.
Supply, Demand
``I don't know if you can classify it as a bubble or not,'' said Masters. ``But there is no question that investor demand is having an effect on price. Very little of it has to do with physical supply and demand of crude oil.'' Masters testified at a Senate hearing in May on the role of speculators in commodities markets.
Gains in oil are the result of a ``bubble'' caused by speculation from index funds and a tight balance between supply and demand, Soros said in testimony before the Senate Committee on Commerce, Science and Transportation on June 3. ``The bubble is superimposed on an upward trend in oil prices that has a strong foundation in reality,'' he said.
Commodity index traders account for about 40 percent of the open interest, or outstanding contracts, in the 12 agricultural commodities for which the Commodity Futures Trading Commission reports data, according to Chicago-based Bianco Research LLC.
Crude futures more than doubled in the past year and surged $10.75 a barrel on June 6, the biggest rise on record and the largest in percentage terms since June 1996. Robert Aliber, a professor of economics emeritus at the University of Chicago Graduate School of Business, says the risk of a ``correction'' has increased because prices climbed so fast.
`Momentum Players'
``You've got speculation in a lot of commodities and that seems to be driving up the price,'' Aliber, co-author of ``Manias, Panics, and Crashes: A History of Financial Crises,'' said in an interview from Hanover, New Hampshire. ``Movements are dominated by momentum players who predict price changes from Wednesday to Friday on the basis of the price change from Monday to Wednesday.''
http://www.bloomberg.com/apps/news?pid=20601109&sid=a9wRqtCtGjZY&refer=home
Here is a photo of the pristine area (ANWAR) which the Dems seek to protect:
(http://bp3.blogger.com/_otfwl2zc6Qc/SFJhUFVfMbI/AAAAAAAAE1E/_obPoZJ4Kkc/s400/anwr1.jpg)
Good shot RG. Here are a few more everyone might enjoy.
(http://www.triplepundit.com/pages/anwr.jpg)
(http://blogs.caller.com/hitting_the_trail/arctic.gif)
(http://www.althippo.com/images/anwr.jpg)
(http://a.abcnews.com/images/GMA/nm_anwr3_080416_ssh.jpg)
Is that the portion of ANWAR where drilling was proposed? Please provide a source.
And, do you think nature should trump the needs of man?
BTW, here is a map which shows the scale involved:
(http://www.sitnews.us/1105news/110505/110505_anwr_closeup.gif)
http://www.sitnews.us/1105news/110505/110505_anwr.html
Looks like Alaskans are in favor of drilling judging by this article and the views of their elected officials:
QuoteAlaska Closer To Opening ANWR
November 05, 2005
Saturday
(SitNews) Alaska Governor Frank H. Murkowski said Friday, "Alaska's Congressional Delegation has won a great victory in the ANWR debate, bringing the United States closer to fulfilling the promise of finally opening the 1002 area."
The U.S. Senate gave final approval Thursday for oil drilling in the Arctic National Wildlife Refuge as part of a deficit-cutting budget bill and then voted overwhelmingly to prohibit exporting any of the oil pumped from the region.
The Senate voted 52-47 for a budget reconciliation bill that includes provisions to allow for drilling in the 2,000-acre portion of the Coastal Plain of ANWR. The provision to increase revenue by drilling for oil in the ANWR survived a challenge - by a vote of 51-48 the U.S. Senate defeated an amendment to remove ANWR from the bill.
Governor Murkowski said, "It is clear that the common sense views of most Alaskans regarding energy development prevailed on this issue that is so vital to the energy security of our nation." He said, "We've got good reason to believe that the small 1002 area holds the greatest prospects for the next Prudhoe Bay-sized discovery and that means jobs for Alaskans and a stable domestic source of energy for the nation."
"We should extend our thanks to Alaska's congressional delegation, the state's Washington, D.C. office, Arctic Power, and all the Alaskans whose efforts are getting us closer to opening the Coastal Plain of ANWR," Murkowski said. "This action by the Senate is a major milestone in congressional consideration of the 1002 area."
The budget reconciliation bill calls for spending cuts of about $35 billion over five years. This would cut $16 billion from education and healthcare programs and $3 billion in agricultural subsidies.
The bill adds 90,000 new employment-based green cards per year raising fees by $500 - which will net the government $251 million.
Two Democrats joined fifty Republicans in support of the bill and forty-one Democrats, five Republicans and one independent opposed.
The Senate in an 86-13 vote, also required that none of the oil from ANWR be exported.
"America needs this American oil," said Sen. Ted Stevens, R-Alaska. He said the refuge's reserves are "crucial to the nation's attempt to achieve energy independence."
President Bush praised the Senate for passage of the ANWR legislation. He said, "Increasing our domestic energy supply will help lower gasoline prices and utility bills. We can and should produce more crude oil here at home in environmentally responsible ways. The most promising site for oil in America is a 2,000 acre site in the Arctic National Wildlife Refuge, and thanks to technology, we can reach this energy with little impact on the land or wildlife. I applaud the Senate for passing legislation to improve our energy situation with this commonsense approach."
Supporters for drilling have argued that ANWR oil will provide the country more domestic oil production, leaving fewer barrels to be imported. Approximately 60 percent of the oil used in the United States today is imported.
Oil is not likely to flow from ANWR for a decade with peak production of about one-million barrels a day expected until about 2025, according to the Energy Department. Currently, the United States uses about 20 million barrels of oil daily.
In a statement Wednesday on the Senate Floor, U.S. Senator Lisa Murkowski said, "When we talk about the amount of oil that is available in the Arctic, we hear all kinds of numbers floating around. Most often, people say ANWR will amount to only a six month supply of oil for this country. The fact of the matter is, according to United State Geological Survey estimates, the Coastal Plain has a 50-50 chance of containing the second largest oil field in North America."
Speaking to the Senate Wednesday, Sen. Murkowski said, "We estimate that ANWR will generate the equivalent of what we have imported from Saudi Arabia for the past twenty-five years  hardly an insignificant source of oil. And, what we estimate we will be able to extract from ANWR would be enough to offset the oil that we lost when production in the Gulf of Mexico was shut down due to this year's hurricanes."
Senator Murkowski told the Senate, "The jobs that will be generated go far beyond those that are just drilling and exploration jobs in Alaska. Jobs will be created all over the country - an estimated twelve thousand jobs in Washington State, eighty thousand in California, forty thousand in New York State. ANWR means increased commerce and increased economic activity all over the country."
Senator Ted Stevens said the Arctic National Wildlife Refuge is 19 million acres. The area set aside for oil and gas exploration is 1.5 million acres. Stevens said, "Because of advances in technology, only 2,000 acres of that will be needed for production."
The bill approved by the Senate Thursday requires the Interior Department to begin selling oil leases for the coastal plain of the Alaska refuge within two years.
A House bill also includes a provision to drill for oil in the ANWR; however, the Washington Post reports that Republicans say they may have trouble approving the bill with the ANWR measure included.
http://www.sitnews.us/1105news/110505/110505_anwr.html
Quote from: RiversideGator on June 13, 2008, 12:15:44 PM
Is that the portion of ANWAR where drilling was proposed? Please provide a source.
And, do you think nature should trump the needs of man?
Source please.
Quote from: RiversideGator on June 13, 2008, 11:17:10 AM
More evidence that a speculative bubble is at least partially driving the increased oil prices:
QuoteOil Rally of 697% Surpassed Dot-Com Craze in Speculators' Mania
[Article deleted for the sake of brevity]
[/b]
http://www.bloomberg.com/apps/news?pid=20601109&sid=a9wRqtCtGjZY&refer=home
Fine. Then raise the capital gains tax from 15% to 25% and the speculators will go away.
What makes you think the speculators will go away? Have you been reading the newspaper again?
No, i don't know how to read. Would you read it to me?
Quote from: Midway on June 13, 2008, 08:08:09 PM
Quote from: RiversideGator on June 13, 2008, 11:17:10 AM
More evidence that a speculative bubble is at least partially driving the increased oil prices:
QuoteOil Rally of 697% Surpassed Dot-Com Craze in Speculators' Mania
[Article deleted for the sake of brevity]
[/b]
http://www.bloomberg.com/apps/news?pid=20601109&sid=a9wRqtCtGjZY&refer=home
Fine. Then raise the capital gains tax from 15% to 25% and the speculators will go away.
That's a great idea. ::)
Obama comes out in favor of higher gas prices:
QuoteBarack Obama: I think that... we have been slow to move in a better direction when it comes to energy usage. And the president, frankly, hasn't had an energy policy. And as a consequence we've been consuming energy as if it's infinite. We now know that our demand is badly outstripping supply with China and India growing as rapidly as they are.
CNBC's John Harwood: So could the (high) oil prices help us?
Barack Obama: I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing. But if we take some steps right now to help people make the adjustment, first of all by putting more money in their pockets, but also by encouraging the market to adapt to these new circumstances more rapidly, particularly U.S. automakers..
http://www.youtube.com/watch?v=Gehaf7_TBAs
Nuclear power generates the energy. You then tie in the pollution free energy into an electrified mass transit system and you develop next generation battery powered cars. Then, you will see oil become a forgotten problem. We dont need pie in the sky solar or wind farms 25 years from now. We have an efficient and safe method of energy generation with nuclear right now. Let's use it.
Honestly, oil prices are a secondary effect of a weak dollar that we need to pay for the war. If the dollar is .50 cents where was at the beginning of the war, and we financed the war, then we pay back half of what it cost us. The unintended result is a huge food bill which, less face it, we need to eat less food, and consume less oil.
Quote from: Lunican on June 13, 2008, 11:37:21 AM
Good shot RG. Here are a few more everyone might enjoy.
(http://www.triplepundit.com/pages/anwr.jpg)
(http://blogs.caller.com/hitting_the_trail/arctic.gif)
(http://www.althippo.com/images/anwr.jpg)
(http://a.abcnews.com/images/GMA/nm_anwr3_080416_ssh.jpg)
Nice pictures... but this is NOT where they propose to drill...
Here is an interesting map showing the size of Alaska relative to the lower 48 and the size of the area involved:
(http://bp1.blogger.com/_otfwl2zc6Qc/SGL2s0TSTeI/AAAAAAAAFAE/qgXeDyPkVtg/s400/alaska.png)
(http://bp1.blogger.com/_otfwl2zc6Qc/SGL3uNwVyGI/AAAAAAAAFAM/An_RZDTtuqA/s400/alaska1.jpg)
Note also that the drilling would occur in a very small portion of the yellow shaded area.
QuoteOil hits $140 for the first time
Intraday and settlement records set on $5 surge as comments from OPEC, Libyan officials raise supply and price concerns.
NEW YORK (CNNMoney.com) -- Oil reached $140 a barrel for the first time ever Thursday following reports that Libya may cut production and an OPEC official said crude could hit $170 a barrel this summer.
Meanwhile, the dollar's decline against the euro added further upward price pressure.
http://money.cnn.com/2008/06/26/markets/oil/index.htm?cnn=yes
Even more reason to drill more oil here. :o
Here is an interview with an oil executive which debunks several of the silliest liberal talking points:
QuoteMy Interview with Anadarko Petroleum CEO James Hackett
What follows below is an unofficial transcript of my interview last night with James Hackett. Mr. Hackett is the president & CEO of Anadarko Petroleum. He also happens to be an incredibly bright man whose thoughts and ideas on energy are right on the money.
Kudlow: Alright, drill, drill, drill. So here to talk about the whole energy situation is James Hackett, president and CEO of Anadarko Petroleum. Mr. Hackett, welcome. Let me just ask you, drilling, this big debate, you know all about it. Ending the moratorium. Decontrolling. Allowing us to produce more supply. First of all, let me get your quick take. How long would it take to bring some oil online if we go to the Outer Continental Shelf?
Hackett: Generally five to seven years from the initial leasing until you actually have production. And we’ve proven that in 8100 feet of water, in a platform that we operate in the eastern Gulf of Mexico right now.
Kudlow: So why are these senators â€" and I’m not even gonna even say which political party they’re from, because I would never politicize an issue â€" why are these senators saying it would take five to ten years and the price impact wouldn’t be felt until 2030? In fact, listen for one second, it’s a non-senator, I’ve got some sound from former Energy Secretary Bill Richardson. Hang on a second. Here he comes.
[Bill Richardson video clip courtesy of CBS/"Face the Nation": “I was Energy Secretary, and I can tell you that every bipartisan administration has opposed offshore drilling for pristine reasons, the ecosystem. But also, the fact that you’re not going to get any of this oil out offshore for the next ten years, and prices won’t go down till the year 2030 according to the Energy Information Agency which is part of the Department of Energy."]
Kudlow: Mr. Hackett, you heard him. Ten years to get it out and then nothing until 2030 on prices. What’s he talking about?
Hackett: Well, I think that it’s one man’s view. We happen to be operators in the Gulf of Mexico. I don’t think Secretary Richardson actually did operate a well in the deep offshore areas. As I mentioned, we’ve got a world class project that is the deepest producing well in the history of the world. It’s providing clean, natural gas to America, about 1.5 percent of all of our gas supply. Everyday it’s being provided from a football field and a half sized environmental footprint, a two-hour flight away from the shoreline. So it’s not in any visual contact with any human being. These platforms have gone through 200-year hurricanes, back in 2005, without any environmental consequences. It’s a bit of a fiction hoisted on us by people who don’t know better.
Kudlow: Alright, I hear you. People who don’t know better. What’s the price impact and how much is out there? I mean, there’s a lot of estimates. What is it, 86 billion barrels in theory, maybe 20 billion barrels are going to be available and provable. What’s your take on the volume that you could put on the market? And when would the price adjust?
Hackett: Well I think that the price would adjust actually as soon as you started drilling it. There’s a psychology with regard to speculative elements in any commodity market, whether it’s grains, or metals, or oil and gas. If the world really felt that there were plenty of places to go look for oil and gas, the markets would start trading as if that were a reality. Today it’s quite the opposite reality, especially with the geopolitical elements overlaying that. So, every time we say to the world, ‘We want energy security, but we want you to produce it, and we’re not going to do anything,’ the elements in the trading community say, ‘well that means that access is getting tougher.’
If you want the things that everybody says we want, we should go and open up our own shores to drill. We can do it environmentally well. We’ve got the proven technology. And we don’t know how much is left out there. Every time we go and find new resources, we find there are more than we thought there were. You could have gone back fifty years, and said that there were less resources, now there are more because we actually went and did good science, produced it responsibly, and have found new horizons in deeper and deeper areas of the horizon to be able to test and bring out.
Kudlow: What about this other argument that is sort of the political talking points of one of the two major parties, although nobody is really totally clean on analyzing this. The leases. I heard a U.S. senator on one of the talk shows yesterday say well, ‘there’s 41 million acres worth of leases out there, but they’re only using 10 million.’ What’s that all about? What is your response to that argument?
Hackett: Well one, it shows a very poor understanding of how the oil and gas business actually works. It’s a bit like the real estate development arena. If you were developing a real estate development, you wouldn’t just do it on one acre, you wouldn’t just build one house. To make it economic you’d actually buy, let’s call it fifty acres and you’d build a housing development. In our case, we don’t just take just one lease to get a well drilled. We actually take several leases if we’re lucky enough to get them. It’s all competitively bid. The federal government collects billions of dollars from this stuff. It’s as if they don’t get anything if you listen to the soundbites. We also pay annual rentals.
So we’re putting together an economically developable area, because remember, we’re drilling miles into the ocean sometimes, miles into the ground, without knowing there’s anything there. So to assume it’s on that one acre that you actually bought is crazy. And so what we’ll do is we’ll actually get ten or fifteen leases, and then we’ll drill, and then we’ll figure out if it’s there or if it’s on the next lease next door. And these things take time. You have to permit them. You have to shoot seismic to be able to do the right science, image it below salt. And then you go and drill it, if you’re lucky enough to get a permit, after you’ve done all your environmental studies.
But they’re talking about offshore. You go onshore, there’s places where we wait on permits for two months to two years. And even though it’s leased, it can’t actually physically be drilled. And that’s what people don’t really understand. With the environmental restrictions and environmental lawsuits, there are lots of places where we hold leases, [but] we’re not allowed to drill because the federal government that leased it to us actually won’t give us the permits.
http://www.kudlowsmoneypolitics.blogspot.com/
Not an expert here but it seems to me there is an economic profitability limitation on some of these unused leases. Many of these leases may not be profitable to drill at this time. Companies are looking for the easiest most profitable oil reserves to drill.
QuoteOil Hits New High as Dow Flirts With Bear Territory
Another surge in the price of oil, which traded above $142 on Friday afternoon after gaining $5 a day earlier, discouraged investors and had helped nudge the Dow down 1.1 percent to 11,327 at 2 p.m. The blue-chip index was above 13,000 just five weeks ago.
Oil is fueling inflation fears, feeding into the Federal Reserve’s warning this week that prices could rise further in the months ahead. Crude traded at $140.21 a barrel, up 57 cents on the New York Mercantile Exchange.
Full Article (http://www.nytimes.com/2008/06/28/business/28oil.html?_r=1&adxnnl=1&oref=slogin&partner=metrojacksonville.com)
Drill, drill, drill. ;D
Why would we bother drilling? I thought you said the current runup in price is just a bubble?
Quote from: Lunican on June 27, 2008, 06:30:12 PM
Why would we bother drilling? I thought you said the current runup in price is just a bubble?
Just for the sake of argument... Let us suppose that ANWR or even an area adjacent to ANWR was discovered to have oil reserves rivaling the Saudis. Would you agree to drill then??
I say drill now.
Quote from: gatorback on June 28, 2008, 12:01:39 PM
I say drill now.
Concur... we may need it more than ever in 5-7 years...
Do we still need to drill now?
Of course!
YES. Along with nuclear, wind, and solar development. I would like to see mega research in PV panels. If we could just get their efficiency up a bit more...
and the Pickens Plan? I am reading all I can on the plan and I like what I've read so far. Oh, here's one for you. The site lists the mayors of towns that have signed up and guess who's not on it? Ha.
I hope Pickens makes a billion dollars... we still have to drill. In fact Pickens plan also requires natural gas... which you have to drill for...
Look at this puppy. Toyota built it for Boone. It's the world first Natural Gas Hybrid.
WOnder why Ford, or GM didnt build it.
http://blog.wired.com/cars/2008/11/toyota-builds-a.html (http://blog.wired.com/cars/2008/11/toyota-builds-a.html)
Quote from: gatorback on November 22, 2008, 06:46:44 PM
Look at this puppy. Toyota built it for Boone. It's the world first Natural Gas Hybrid.
WOnder why Ford, or GM didnt build it.
http://blog.wired.com/cars/2008/11/toyota-builds-a.html (http://blog.wired.com/cars/2008/11/toyota-builds-a.html)
I wonder the same thing. It makes me sick to listen to the CEOs of the big three come looking for a bailout when they lack vision and innovation, and are wasteful. Japan uses alot of natural gas...
Ya still gotta drill for it... :)