Oil Prices

[RiversideGator]

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.

[gatorback]

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.

[BridgeTroll]

Good shot RG. Here are a few more everyone might enjoy.

Nice pictures... but this is NOT where they propose to drill...

[RiversideGator]

Here is an interesting map showing the size of Alaska relative to the lower 48 and the size of the area involved:





Note also that the drilling would occur in a very small portion of the yellow shaded area.

[Lunican]

Oil 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

[RiversideGator]

Even more reason to drill more oil here.   

Here is an interview with an oil executive which debunks several of the silliest liberal talking points:

My 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/

[BridgeTroll]

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.

[Lunican]

Oil 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

[RiversideGator]

Drill, drill, drill.   

[Lunican]

Why would we bother drilling? I thought you said the current runup in price is just a bubble?

[BridgeTroll]

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??

[gatorback]

I say drill now.

[BridgeTroll]

I say drill now.

Concur... we may need it more than ever in 5-7 years...

[gatorback]

Do we still need to drill now?

[BridgeTroll]

Of course!