US Offshore Oil Drilling - McCain v. Obama

[Sihouette]

Boy there's nothing quite like misquoting to put the final touches on a spin.

Didn't I talk about cutting way back on oil and saving some for a rainy day? Hmmm?

C'mon, even gradeschoolers can see through your flimsy spin attempts. Keep your integrity up, please..

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In April 2000 the United States Geological Survey (USGS) released results of the most thorough and methodologically modern assessment of world crude oil and natural gas resources ever attempted. This 5-year study was undertaken "to provide impartial, scientifically based, societally relevant petroleum resource information essential to the economic and strategic security of the United States." It was conducted by 40 geoscientists (many with industry backgrounds) and was reviewed stage-by-stage by geoscientists employed by many petroleum industry firms including several of the multinational majors.


The above facts prompted the Energy Information Administration (EIA) to take the next logical step by providing the first Federal analysis of long term world oil supply since that published by Dr. M. King Hubbert of the USGS in 1974. The results of EIA's study as presented at the 2000 AAPG meeting and published in July 2000, remain online in slide show format at: http://www.eia.doe.gov/pub/oil_gas/petroleum/presentations/2000/long_term_supply/index.htm. Since then nothing has happened, nor has any new information become available, that would significantly alter the results. High feedback and sustained requests for "live" presentation indicate widespread cognizance of the analysis among energy policy makers in the Federal government, analysts who focus on energy matters, and senior managers of public and private entities that are major consumers of petroleum products...

..The particular scenario shown in Figure 2 depicts the 2 percent demand growth experience of recent years extended up to the production peak (similar to the 2.2 percent rate applied through 2020 in EIA's 2002 International Energy Outlook) and then the decline path from the peak at a constant R/P ratio of 10. The three divergent curves shown reflect alternative resource base volumes. From left to right they are the sum of the USGS's United States and rest-of-world resource estimates at the 95 percent certain (19 chances in 20 of that much or more), the statistical mean (expected value), and 5 percent certain (1 chance in 20 of that much or more) volumetric levels. Thus, if the USGS mean resource estimate proves to be correct, if 2 percent production growth continues until peak production is reached, and if production then declines at an R/P ratio of 10, world conventional crude oil production would be expected to peak in 2037 at a volume of 53.2 billion barrels per year...

..Will the world ever physically run out of crude oil? No, but only because it will eventually become very expensive in absence of lower-cost alternatives. When will worldwide production of conventionally reservoired crude oil peak? That will in part depend on the rate of demand growth, which is subject to reduction via both technological advancements in petroleum product usage such as hybrid-powered automobiles and the substitution of new energy source technologies such as hydrogen-fed fuel cells where the hydrogen is obtained, for example, from natural gas, other hydrogen-rich organic compounds, or electrolysis of water. It will also depend in part on the rate at which technological advancement, operating in concert with world oil market economics, accelerates large-scale development of unconventional sources of crude such as tar sands and very heavy oils. Production from some of the Canadian tar sands and Venezuelan heavy oil deposits is already economic and growing.

In any event, the world production peak for conventionally reservoired crude is unlikely to be "right around the corner" as so many other estimators have been predicting. Our analysis shows that it will be closer to the middle of the 21st century than to its beginning. Given the long lead times required for significant mass-market penetration of new energy technologies, this result in no way justifies complacency about both supply-side and demand-side research and development.

Source: http://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2004/worldoilsupply/oilsupply04.html

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Note the sharp exponential dropoff around 2050 or so. My point is that if the world's leading scientists are showing this as a scenario, we should be jumping the gun, saving as much as we can now to insure that we will be able to have a safety cushion on our rapid path to switch to mainly alternatives that we will have no choice but to rely on then. The oil-addicts approach is "let tomorrow take care of itself. Don't bother with it now." The sane response is "Let's jump on it bigtime right now so we can stretch our use of fossil fuels much further into the future if we need them then."

So why can't we allow wide-scale development of what will be mandatory in 50 years? BigOil has the money now to fund the rapid switchover before it becomes a matter of dire national security. Plan ahead. That's what smart people do. We tried to plan ahead decades ago but BigOil felt it was better to wait then too. And look where it got us now. Make the same mistake twice? Nope.

 

[GenSeneca]

So why can't we allow wide-scale development of what will be mandatory in 50 years?

We ARE!!! What part of "We are allowing wide scale development of alternatives" do you not understand? The people who BLOCK the advancements are - ENVIRONMENTALISTS, not Big Oil.

BigOil has the money now to fund the rapid switchover before it becomes a matter of dire national security.

Why not pick on Bill Gates and make Microsoft develop alternatives?? They have money.... better yet, if you don't think we provide adequate funding - fund it yourself! Get all your friends together and send YOUR hard earned money to fund the creation and expansion of Alternatives.

Leave me out of it and keep your hands out of my pocket.

Seriously, you have NO concept of how corporations work and where PROFIT goes... To the Investors! Big Oil isn't just sitting on a pile of money - they pay that money out to shareholders and now YOU want to take money out of the pockets of MILLIONS of Americans because you don't like where they got the money.

Big Government earns MORE, MUCH MORE, from the oil industry than Big Oil does. When will you acknowledge that FACT? Why can't government fund alternatives? Oh, they are, massively.... and environmentalists are blocking advances.

Additionally.... how was Big Oil created???? They were NOT created by the energy industry that preceded them (Big Tree?). They DID NOT get subsidies from the Government. Big Oil created the oil industry on their own, with their own money.

 

[Bunz]

A few thoughts...

Firstly, there is no good reason not to, and plenty of incentive for America to lead the world in moving towards burning signifigantly less oil in its various forms. Right now nationwide and worldwide people in many cases are being squeezed tightly by the high price of oil. I am paying among the highest in the nation, but setting aside my very unique situation, the price of everything is heading up quickly. There will become a point at which the price of oil if it continues down this path that will lead to economic crisis.

To bring oil into a much more affordable price situation, America needs to do two things ultimately, increase supply and lessen demand. The one thing that we are not doing much, of is using less. I know lots of people are on an individual level consuming less oil. But on a larger scale, using 10% less as a nation would have an effect ultimately.

American oil companies though, need to increase thier investment in America now, they have purchased up and sat on millions of acres of drillable, viable lands right here in America. Doing little, thier inaction certainly has had some effect on the prices.

Lastly, the price of oil is determined on the futures market. Which is based largely on speculation. Which makes it potentially highly volatile to skyrocket. While there is little chance of a drop in energy prices in a signifigant way in the forseeable future. I can certainly think of quite a few plausible scenarios where oil could be $200/bbl next week.

 

[GenSeneca]

American oil companies though, need to increase thier investment in America now, they have purchased up and sat on millions of acres of drillable, viable lands right here in America. Doing little, thier inaction certainly has had some effect on the prices.

They are "sitting" on 10 year leases, sold to the highest bidder, with an 18% royalty fee per barrel pumped. After 10 years, Government can sell that plot out from under you to someone else and your out BILLIONS.

Even if oil companies double production, there hasn't been a refinery built for 32 years... Environmentalists won't let it happen. However, we have built, or are in the process of building, some 216 brand spankin new Ethanol refineries. Ethanol (corn), much like Enron, is built on lies. We should abandon it and use the new refineries for oil.

Government needs to be more business friendly, especially with the AMERICAN Oil Companies. Pounding them with additional taxation will not stimulate them into "doing the right thing", it will drive them overseas where they can operate at a lower cost and have better drilling rights. 70% of Exxon's sales come from overseas, that company alone paid the same amount in taxes as the bottom 50% of American Taxpayers.

Lastly, the price of oil is determined on the futures market. Which is based largely on speculation. Which makes it potentially highly volatile to skyrocket. While there is little chance of a drop in energy prices in a signifigant way in the forseeable future. I can certainly think of quite a few plausible scenarios where oil could be $200/bbl next week.

Oil is a commodity and its price is based on supply and demand. Same with any other commodity, they ALL have futures markets and speculation.... Oil is the MOST valuable of all resources in the industrialized nations of the world. It shouldn't be surprising that with all thats going on the world, oil is expected to become more valuable.

You simply cannot blame the cost of oil on futures markets and speculation... if it were so easy to artificially cause the price to skyrocket, and make huge fortunes for the traders, we would see it in ALL the commodities. The facts have to match the speculation and the fact is, Draconian Global Warming measures, along with Mideast turmoil and explosive demand, have made the prospects of World Supply vs Demand look bleak.
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American Oil Companies, the ones that actually PRODUCE oil, make up less than 15% of the world's oil producing companies. When Congress talks about punishing "Big Oil" for the high cost of oil, you need to realize they can only "Punish" American oil companies with taxes, regulation and the occasional reach-around.

There are around 200 American oil companies, 2% of which actually produce oil, and the vast majority of them have holdings of less than 1 billion dollars... Not enough to even think about becoming producers.

The largest producer of US oil is BP, as in British Petroleum. Passing even greater taxes, like the "windfall profits tax", on American Oil Companies would give BP that much more of an advantage IN AMERICA!!!

Democrats will kill our golden goose.

 

[Sihouette]

Ohhh...

You have stock in oil companies. That doesn't make their dirty business any more palatable. Sorry, wish I could have compassion for BigOil stockholders..I just cannot. Buying stock is a gamble and in a capitalistic society it also in some cases may be like forming an alliance with the devil.

No, I'm not a christian zealot, I'm just illustrating a point. When you jump on board an aniquated and greedy dinosaur that people are getting sick of having a monopoly over them, you made your bed and some day it will be time to lie in it..

The answer is not to drill for more oil. The answer is to drastically conserve and rapidly cross over to clean and safe alternatives. And to say "no" to BigOil's counter-chants of nuclear as the remedy to scare us back into the idea of drilling. It's choreographed, I swear to God.

I notice tornadoes nearing New York yesterday. I notice the Mississippi River having it's second 500-year flood in the span of one decade or so. I notice an increase in tornadoes and hurricanes all across the eastern seaboard and the interior. I notice record heat waves getting busted every year. I notice pictures of the Arctic ice sheets retreating at exponential rates. I notice weird temperature fluctuations from extremely unseasonal cold to extremely unseasonal hot. I notice the mean high tide line on our coasts having risen two feet in the last year.

I notice all this stuff yet BigOil is padding many a BigMedia pocket to laugh hysterically any time it's brought up. I notice leading world scientists shouting in alarm to the deaf ears in goverment in the US. I notice the main contributors to these extremely costly disasters are the burning of fossil fuels.

So BigOil is screwing us four times. They sacked our public funds to fund their hostile corporate takeover of Iraq's oil. They continue to sack us at the pumps. They're on an ad campaign to convince us that more drilling and oil burning is the answer and they're contributing via pushing their product like a drug cartel pushes crack cocaine, to the huge deficits global warming is causing via stunning and ongoing environmental disasters from frightening climate change.

Sorry guys, stockholders, yacht-owners and thugs of BigOil, more oil is no longer the answer. Your mantra since the 1960s has now ended.

 

[Andy]

You have stock in oil companies.

Yes I have. Unlike you, I'm earning money off the sale of gasoline. Cool eh?

That doesn't make their dirty business any more palatable. Sorry, wish I could have compassion for BigOil stockholders..I just cannot. Buying stock is a gamble and in a capitalistic society it also in some cases may be like forming an alliance with the devil.

I don't need your compassion, and there is nothing dirty about it. When you are flipping burgers at Wendy's still complaining about evil corporations, I'll be retired on a beach somewhere sipping a long island ice tea. Buying stock isn't any more of a gamble than any other investment on the planet.

When you jump on board an aniquated and greedy dinosaur that people are getting sick of having a monopoly over them, you made your bed and some day it will be time to lie in it.

First, it isn't a monopoly. We already covered that. Second, every single company on the planet is considered antiquated and greedy by someone, and it's just as irrelevant.

Yeah just like those who had stock in the Telephone service, or Standard Oil, or any of the other large companies. The government broke them up, all the customers paid more, and the investors got rich. So by all means, make me richer.

The answer is not to drill for more oil. The answer is to drastically conserve and rapidly cross over to clean and safe alternatives. And to say "no" to BigOil's counter-chants of nuclear as the remedy to scare us back into the idea of drilling. It's choreographed, I swear to God.

That is the dumbest thing I've ever heard. BigOil is going to promote Nuclear power, which doesn't compete with oil, in order to scare us back to oil for power generation, which it isn't used for.... Do you ever have a thought out point?

Saying that drilling isn't the answer to high oil prices, is like saying drinking isn't the answer to dehydration. Or like eating isn't the cure to being anorexic. Or a little education isn't the answer to stupid bigoil conspiracy theories that are not supported by a single fact anywhere.

I notice tornadoes nearing New York yesterday. I notice the Mississippi River having it's second 500-year flood in the span of one decade or so. I notice an increase in tornadoes and hurricanes all across the eastern seaboard and the interior. I notice record heat waves getting busted every year. I notice pictures of the Arctic ice sheets retreating at exponential rates. I notice weird temperature fluctuations from extremely unseasonal cold to extremely unseasonal hot. I notice the mean high tide line on our coasts having risen two feet in the last year.

Increase in weather activity is linked to a decrease in temperature by leading meteorological scientists. It even make elementary physics. When does water condense into clouds that in turn produce weather? When it cools. Global weather patterns happen when the air cools.

Ant-arctic ice sheets have broken records for largest and thickest glaciers ever recorded, along with the coldest temps in history.

The rest is circumstantial evidence and hearsay. Science doesn't support you.

I notice all this stuff yet BigOil is padding many a BigMedia pocket to laugh hysterically any time it's brought up. I notice leading world scientists shouting in alarm to the deaf ears in goverment in the US. I notice the main contributors to these extremely costly disasters are the burning of fossil fuels.

Most scientists are not in agreement on this. The ones shouting alarm in order to get attention and government funding, might have the headlines... but there or more scientists that disagree, than agree. I've already posted the relevant scientific data on this, would you like it again? I'll be more than happy to repost.

So BigOil is screwing us four times. They sacked our public funds to fund their hostile corporate takeover of Iraq's oil. They continue to sack us at the pumps. They're on an ad campaign to convince us that more drilling and oil burning is the answer and they're contributing via pushing their product like a drug cartel pushes crack cocaine, to the huge deficits global warming is causing via stunning and ongoing environmental disasters from frightening climate change.

Sorry guys, stockholders, yacht-owners and thugs of BigOil, more oil is no longer the answer. Your mantra since the 1960s has now ended.

I can promise you this. You can waste your time babbling about this for the next 10 years, and here is my prediction. Oil production and consumption will increase steadily. It will do so either by us drilling for our own oil and paying lower prices while being more and more independent... or it will do so with us producing less, paying very high prices and making us very dependent.

Either way, oil is here to stay. You can either stand in the middle and get run over with your fearmongering conspiracy theory babble, or you can join.

 

[GenSeneca]

That is the dumbest thing I've ever heard.

Give it time, she's not done posting.

Saying that drilling isn't the answer to high oil prices, is like saying drinking isn't the answer to dehydration. Or like eating isn't the cure to being anorexic. Or a little education isn't the answer to stupid bigoil conspiracy theories that are not supported by a single fact anywhere.

If Liberalism is a Mental Disorder, what does that make Democrat Policy?

 

[Andy]

To bring oil into a much more affordable price situation, America needs to do two things ultimately, increase supply and lessen demand. The one thing that we are not doing much, of is using less. I know lots of people are on an individual level consuming less oil. But on a larger scale, using 10% less as a nation would have an effect ultimately.

This is the magic wand theory. If we wave the magic wand, we can use less oil. I'm sorry, but unless you just forfeit all our rights as Americans, the basis for our whole country, you are not going to decrease oil usage at that scale. We had another guy say "well if everyone just bought a bike to cycle to work with..." yeah like that's going to happen. Answer, no it isn't. So why are we debating something that isn't going to happen no matter how much we play "I wish I wish I wish!"?

Here, look at this article on the dropping consumption of gasoline, and the continuing increase in oil prices. Note, gas usage has been dropping nation wide for the last 6 months. No stupid government tax and spend program. No CAFE standards. No rebates or incentives. Just supply and demand pushing up prices and gasoline consumption dropped.

Yet, prices are still rising. I couldn't find a conclusive report, but gasoline demand has dropped somewhere between 4 and 6%... yet the price goes up!

And notice this quote by a professor of economics:

even if we reduced our gasoline consumption by 10 percent, this would only be a 1 percent drop in world oil consumption

In other words, the whole idea is a farce. The theory that if we reduce our gasoline usage by 10% nation wide, will have this huge effect... no sorry it will not.

American oil companies though, need to increase thier investment in America now, they have purchased up and sat on millions of acres of drillable, viable lands right here in America. Doing little, thier inaction certainly has had some effect on the prices.

We already covered this too. There are many reasons an Oil company does not drill on lands they have purchased drilling rights too.

From the "Why open more land to drilling" Thread, post #7, I will repost my own comments here:

The current lease system is a 10-year span, with a possibility the government can deny renewal, and sell it to another company. So-

Just think about it. The claim is that it requires roughly 5 years to go from exploration to drilling to well producing oil. So, if I offered you the option to lease a 1 acer plot of land to build a house on, that may cost you $250K to build, take 5 years to build, and you lose it all in 10 years... would you do it? Would anyone? Of course not. So this obviously is an issue.

Further:

I happen to find an article on this, and in that article, a letter from Senator Ernest Ishtook of Oklahoma. In it he states the following reasons that a company may not use a land lease.

1. A company may lease a plot, but never get the backing or funds (capital) to properly explore or drill it.
2. A company may find after exploration tests, like seismic, that the cost/value of the lease isn't worth the cost of drilling.
3. A company may hold the lease until such a time as the cost of oil rises till it's profitable to drill, or new technologies allow for economic drilling.
4. A company may purchase multiple tracts, and focus on one at a time with given capital, with the others waiting in turn.
5. A company (shocked) might be blocked by government red tape, both federal and state, and/or lawsuits by eco-nuts (my wording here)
6. Finely, and most important, the federal government is pretty much selling drilling leases for random federal lands. There is not the slightest chance that all acres have enough oil to be profitable, or any oil at all in some cases.

So on the federal lands we know without question there is tons, if not trillions of barrels of oil, they are not leasing a single acre. But on a random plot of federal land in Idaho, sign up to purchase drilling rights. Then we whine they are not drilling?

Lastly, the price of oil is determined on the futures market. Which is based largely on speculation. Which makes it potentially highly volatile to skyrocket. While there is little chance of a drop in energy prices in a signifigant way in the forseeable future. I can certainly think of quite a few plausible scenarios where oil could be $200/bbl next week.

This makes no sense to me, and it may be that I simply don't understand the futures markets. But something in this theory doesn't add up.

If the price boom is due to futures market, then that bubble will have to burst at some point. If oil prices are sustained and consistently increased, then it likely is supply and demand. I know how speculation builds on speculation, but at some point that routine will fail, so if the price doesn't pop, it must not be inflated speculation.

So I've been wondering about this 'blame oil futures' theory for awhile now. I found something that gives credit to my question. Goldman Sach, the largest securities firm in existence, just today came out with this report, that indicated that indeed, the simple market force of Supply and Demand is responsible for oil prices.

So... of course the simple answer then is... more drilling, thus production will increase supply, and lower prices.

 

[Sihouette]

No, more fossil fuel drilling will cause more dependance on the false energy supply given that it will be gone, practically speaking, in 50 years anyway.

Increased production in the interim means more use. More fossil fuel burning means more greenhouse gases dumped into the atmosphere, trapping heat from the sun in our atmosphere, continuing to raise temperatures and causing icecap melting, increasingly bizarre and damaging, expensive weather phenomenon. Resulting in more costs to an already overburdened and debt ridden America.

BigOil is anti-american. Like I said, it won't take "terrorists" to bring us down. BigOil is getting the job done just fine without them. All they need to do is sit and wait...

 

[Andy]

No, more fossil fuel drilling will cause more dependance on the false energy supply given that it will be gone, practically speaking, in 50 years anyway.

No it will not. The peak oil theory has failed so many times. The global known reserves have risen in the past 5/10/15/20/25 years... basically they have risen constantly since the Peak Oil theory came out.

Even now, the problem isn't that there isn't more oil to be gotten, just that we have not gotten it. Even Saudi Arabia has the highest known reserves in their history, it's just that they haven't invested enough money into getting it.

Increased production in the interim means more use. More fossil fuel burning means more greenhouse gases dumped into the atmosphere, trapping heat from the sun in our atmosphere, continuing to raise temperatures and causing icecap melting, increasingly bizarre and damaging, expensive weather phenomenon. Resulting in more costs to an already overburdened and debt ridden America.

Yes yes, CO2 as a cause of global climate change is a fraud. It won't do any of that. The global average mean temperature dropped last year, so we can dismiss this foolish theory. I've already posted the relevant scientific data... care for me to repost?

BigOil is anti-american. Like I said, it won't take "terrorists" to bring us down. BigOil is getting the job done just fine without them. All they need to do is sit and wait...

Being socialist is anti-america. Drilling your own well to pump your own oil, to sell at market price, is American. So is building a company to produce a product thousands of Americans want. BigOil hasn't done anything to me but provide a product I want. It's Big Government that has hindered them from doing so, causing the price to raise.