Should we Drill?

[TeryT]

I was wondering what members think about this now that gas is over $4 in most places. Should the moratorium on offshore drilling be lifted? If the moratorium is lifted, it will place the decision to proceed in the states' hands.

Personally, I think we should. This will start to relieve supply issues down the road (no pun intended). Our own resources could supply at least 10% of the US need, and more if we get better at conserving (which we will). And just the fact that we are drilling, will affect the speculative market, and cause prices to drop some.

I think there probably was good environmental reason, at one point, to take a step back. We could afford to, as oil prices were cheap. Now, we have more environmental regulations and technology in place than probably any other country. And if we start drilling again, it will be done with much more stringent environmental controls. Will accidents happen? Sure, but I think the time is right.

 

[snhrph]

I agree, we need to start drilling. However, it may talke up to 5 years to bring the oil from it.

We also need to invest in new technologies: natural gas vehicles be one of them. I was driving a dual fuel car (petrol - natural gas) in 1989 in RUSSIA. If they could perfect that technology for commercial use 20 years ago, why can't we?

And of course the conservation will go a LONG WAY. I do not agree that we all need to drive econo-boxes, but changing our driving habits just a bit will provide a great benefit. I was able to increase my gas mileage 13% just by accelerating less and trying to stay below 75mph. And use cruise control when possible and safe. I'm sure we can all do that.

 

[TeryT]

One plus to pulling a trailer frequently is that I've gotten used to not going a zillion miles an hour. I have played with the computer a lot, and found that the slower I drive, the better gas mileage (towing or otherwise). So now it doesn't bother me much at all to drive 65 MPH or less like it used to - especially when driving the SUV (the car gets 27-33 MPG).

Speed really is a mindset habit, which can be changed!

 

[juneau92]

I've read that there's enough oil offshore to supply the entire USA for a period of 3 years or so, and that it would take the better part of 10 years to find and drill for it. So,.....hmmm, if this this true, me thinks it not such a great idea.

 

[toto]

Drilling for more oil won't help gas prices significantly. The world pumps 80 million barrels of oil out of the ground every day, and demand is heavier than supply. I think the small dent we'd make in the demand with a little more drilling, especially given the start-up delay, won't do much. The Saudis recently said they were going to increase production by a few hundred thousand barrels a day, and the market didn't even flinch.

We need to focus on reducing demand instead with alternate fuels such as hydrogen, natural gas or pure-electric cars. Ethanol doesn't count in my opinion - it reduces the amount of corn available for food, and it requires more energy to make it than you get out of it when you burn it. E85 is purely a political play because we produce more corn than oil in this country.

I agree with the other comments about driving smarter as well. You don't need to become crazy with strange driving habits, but slowing down and driving sensibly would certainly help if everyone did it.

 

[TeryT]

Drilling for more oil won't help gas prices significantly. The world pumps 80 million barrels of oil out of the ground every day, and demand is heavier than supply. I think the small dent we'd make in the demand with a little more drilling, especially given the start-up delay, won't do much. The Saudis recently said they were going to increase production by a few hundred thousand barrels a day, and the market didn't even flinch.

We need to focus on reducing demand instead with alternate fuels such as hydrogen, natural gas or pure-electric cars. Ethanol doesn't count in my opinion - it reduces the amount of corn available for food, and it requires more energy to make it than you get out of it when you burn it. E85 is purely a political play because we produce more corn than oil in this country.

I agree with the other comments about driving smarter as well. You don't need to become crazy with strange driving habits, but slowing down and driving sensibly would certainly help if everyone did it.

I'm not so sure that it won't help prices in the short run. Have you been watching the news where everyone is saying that the prices don't make sense because there is no shortage? And that the only thing that does explain it is speculators are driving up the prices. Sorta like what happened in the housing market, with investors driving up the prices.

If this is the case, then even action towards being serious about getting after our own resources would have an impact.

If we were able to bring online 10% more to the US, it would have an impact.

 

[Climb14er]

Currently the oil and gas companies have stockpile leases up the wazoo but have not utilized them for production.

Why not?

IMHO, the oil and gas companies WANT the public to believe that they need more land/permits.

Moving the existing sites into production is contrary to their economic plans of keeping production (and refining)... limited to keep prices high.

BTW, I'm an investor in oil, gas and drilling companies.

Read the following statistics and link:

http://courtney.house.gov/UploadedFiles/Natural Resources energy report.pdf



_ On the Outer Continental Shelf, 82% of federal natural gas and 79% of
federal oil is located in areas that are currently open for leasing.

_ Onshore, 72% of oil and 84% of natural gas resources are either fully
accessible under standard lease stipulations designed to protect lands
and wildlife, or will be accessible pending the completion of land-use
planning or environmental reviews.

_ Between 1999 and 2007, drilling permits for oil and gas development on
public lands increased more than 361%.


_ Since 2004, the Bureau of Land Management has issued 28,776 permits
to drill on public land; in that same time, only 18,954 wells were actually
drilled.

_ Oil and gas companies have stockpiled nearly 10,000 extra permits to
drill that they are not using to increase domestic production.

_ Onshore, of the 47.5 million acres of federal lands leased by oil and
gas companies, only about 13 million acres are actually producing oil
and gas.

_ Offshore, only 10.5 million of the 44 million leased acres are currently
producing oil or gas.

_ Combined, oil and gas companies hold leases to nearly 68 million acres
of federal land that are not producing oil and gas.

_ The 68 million acres of leased, inactive federal land could produce an
additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural
gas each day.

_ That would nearly double total U.S. oil production, and increase natural
gas production by 75%.

_ Development of and production from the 68 million acres currently
under lease but not in production would cut US imports of oil by one third.

 

[mtnet2000]

even if tomorrow we opened up every square mile of the outer
Continental Shelf to offshore rigs, even if we drilled the entire state of
Alaska and pulled new refineries out of thin air, the impact on gas prices
would be minimal and delayed at best. A 2004 study by the government's
Energy Information Administration (EIA) found that drilling in ANWR would
trim the price of gas by 3.5 cents a gallon by 2027

More offshore drilling. THERE ISNT EVEN ENOUGH SHIPS TO GET THE DAMN
OIL!
http://www.nytimes.com/2008/06/19/business/19drillship.html

 

[TeryT]

Currently the oil and gas companies have stockpile leases up the wazoo but have not utilized them for production.

Why not?

IMHO, the oil and gas companies WANT the public to believe that they need more land/permits.

Moving the existing sites into production is contrary to their economic plans of keeping production (and refining)... limited to keep prices high.

BTW, I'm an investor in oil, gas and drilling companies.

Read the following statistics and link:

http://courtney.house.gov/UploadedFiles/Natural Resources energy report.pdf



_ On the Outer Continental Shelf, 82% of federal natural gas and 79% of
federal oil is located in areas that are currently open for leasing.

_ Onshore, 72% of oil and 84% of natural gas resources are either fully
accessible under standard lease stipulations designed to protect lands
and wildlife, or will be accessible pending the completion of land-use
planning or environmental reviews.

_ Between 1999 and 2007, drilling permits for oil and gas development on
public lands increased more than 361%.


_ Since 2004, the Bureau of Land Management has issued 28,776 permits
to drill on public land; in that same time, only 18,954 wells were actually
drilled.

_ Oil and gas companies have stockpiled nearly 10,000 extra permits to
drill that they are not using to increase domestic production.

_ Onshore, of the 47.5 million acres of federal lands leased by oil and
gas companies, only about 13 million acres are actually producing oil
and gas.

_ Offshore, only 10.5 million of the 44 million leased acres are currently
producing oil or gas.

_ Combined, oil and gas companies hold leases to nearly 68 million acres
of federal land that are not producing oil and gas.

_ The 68 million acres of leased, inactive federal land could produce an
additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural
gas each day.

_ That would nearly double total U.S. oil production, and increase natural
gas production by 75%.

_ Development of and production from the 68 million acres currently
under lease but not in production would cut US imports of oil by one third.

OK, so there is either a big conspiracy to just hold onto these leases, and therefore not reap the inherent profits by working them - or these particular leases won't really yield a good source of profit right now. That is, perhaps the oil is too expensive to get to or process, or some other reason it won't be profitable at this time. (The leases are very hard to get, so they want to be 1000% sure there is nothing profitable there before the relinquish them.)

If you go with the conspiracy theory, then it appears you are pretty much saying the companies are denying themselves profit taking by participating in the conspiracy. Should we mistrust big biz so much, to think they will go against their own greedy, self-serving natures just to screw us all big time!?

So if you don't trust "big business" to do the thing they are by nature inclined to do (provide shareholder profit), then is the answer a government solution?

 

[TeryT]

even if tomorrow we opened up every square mile of the outer
Continental Shelf to offshore rigs, even if we drilled the entire state of
Alaska and pulled new refineries out of thin air, the impact on gas prices
would be minimal and delayed at best. A 2004 study by the government's
Energy Information Administration (EIA) found that drilling in ANWR would
trim the price of gas by 3.5 cents a gallon by 2027

More offshore drilling. THERE ISNT EVEN ENOUGH SHIPS TO GET THE DAMN
OIL!
http://www.nytimes.com/2008/06/19/business/19drillship.html

Again, much of the oil market right now is likely driven by speculators. I say "likely" because it is something of a mystery as to why the prices are so high. Everyone is scratching their heads on this (have you been following all the people saying this in the news?). While there is more demand, there is no big shortage driving the prices up to this extreme. So, in the absence of a supply/demand answer, the other answer appears to be speculation. Speculation is one of the more sometimes irrational aspects of a generally rational free market. (But you have to allow speculation, if the market is truly free.)

And since speculation is not tied solely to current supply & demand, speculators are free to guess how things will be in the future.

One of the things that has driven this perception that there will be a shortage, is the environmental measures in the USA, which keep us from getting at our own supplies. While environmental laws were certainly needed to curtail the blatant abuses (I used to drive along the Cuyahoga River near Cleveland in the 1960s - when it caught on fire! One of the prime reasons Nixon started the EPA.), we have come a long, long way.

Now, the environmental measures have gotten somewhat out of hand, and have become draconian government restrictions. I say "draconian," because we all know stories where really silly things have happened, in the name of protecting the environment. (When one hears these sort of stories all the time, it's often an indicator the governement has gone too far.)

We now have much cleaner air & water, and have some of the most restrictive environmental regulations (if not the most), of any nation. We also have learned how to do things like drilling in much more environmentally effective ways.

I believe, while it certainly started out as a good & necessary thing, the pendulum has swung too far - do we continue to shoot ourselves in the economic foot here?

 

[importheinekin]

everyone has their own idea of what's going on but I just find it rather odd that we can jump from $2.50 to $5 in a year or so. (im exaggerating)...we are sooo getting taken.

either way, it'll all work itself out. Toyota, along with most all other Japanese auto makers have long been perfecting the Electric Vehicle. (or "EV" as the japanese so love to call them). I just saw a special on them thru satellite TV and it's impressive...most of em easily get 80 miles to a charge if not more. (do any of you commute further than that?! it'll easily charge by the time you're off work if you can find a standard wall plug)

of course there mini cooper sized cars aren't going to appeal to most gas guzzler loving americans. But I really believe that within 3-5 years we all will have the opportunity to jump into an electric vehicle, or a heavily electric based-gas hybrid (one that uses GAS AFTER the Battery runs out) and eliminate our need to bring cars to the pump. What happens then? Gas prices will have to be lowered since no one (granted, if people BUY EV's...which I'm betting they'll be hesitant at first, just like no one wanted a Prius until TODAY) will need gas.

I find it hard to believe that Americans are going to jump into Electric Vehicles, but for the small errands and going to the grocery story, I find it hard to believe you need a 6Liter V8 to get the job done.

people will then start doing the stupid "which is cheaper...keeping my 11 MPG chevy truck...or dropping $30,000 on a EV...hmm, well driving my truck now is still cheaper than buying a new car...I think I'll stick to this" or hope that enough other people use less fuel to swing the supply up and the demand down.

i hope people are going to be open to change and will buy something less fuel thirsty or give alternate/new technologies a chance

 

[josh220]

I don't think most of us in CA want to see the coast lined with 10 times more drilling sites than what is already out there.

 

[TeryT]

I don't think most of us in CA want to see the coast lined with 10 times more drilling sites than what is already out there.

We're talking 150 miles out - you won't see anything. So come-on, if Arizona had a coastline, we'd let you drill here! :biggrin2:

 

[josh220]

We're talking 150 miles out - you won't see anything. So come-on, if Arizona had a coastline, we'd let you drill here! :biggrin2:

If we don't have the rights to drill past the 12 mile mark off of Florida, where do we get the rights to drill 150 miles off CA? If I'm not mistaken, China is drilling off of Florida.

 

[TeryT]

If we don't have the rights to drill past the 12 mile mark off of Florida, where do we get the rights to drill 150 miles off CA? If I'm not mistaken, China is drilling off of Florida.

That's right! It's our own legistlation that says we can't drill out there. But the chinese don't have to obey this, because it's beyond 12 miles - so if they are doing it, doesn't it make sense that we should be getting a piece? Hello :awais:

See here

 

[josh220]

That's right! It's our own legistlation that says we can't drill out there. But the chinese don't have to obey this, because it's beyond 12 miles - so if they are doing it, doesn't it make sense that we should be getting a piece? Hello :awais:

Yeah, if China is doing it, I say we do it.

I just never realized that in some places they are going out to as far as 150 miles. In Southern CA much of it will be right off the coast between the islands though.

 

[TeryT]

Tampa Bay article - also see interesting comments

 

[TeryT]

Speculators Blamed

The president of the Organization of Petroleum Exporting Countries, Khelil, blamed $135 oil on speculative investors, the subprime credit crisis and geopolitics, rather than a shortage of supply. Khelil, who is also Algeria's oil minister, today dismissed the argument voiced by consuming nations that possible supply shortages are driving up prices.

The Saudi King and other producer-nation officials including Kuwaiti oil minister Mohammed al-Olaim also called for greater regulation on oil market investors. The U.S. Commodity Futures Trading Commission is currently investigating the role of index-fund investors in the doubling of oil prices during the past year.

OPEC itself is divided. While Saudi Arabia is boosting output, other OPEC members including Libya, Algeria, Iran, Venezuela and Qatar are opposed to higher production, saying refiners aren't asking for more crude.

FROM HERE: Today's Bloomburg article

 

[simple]

The effects of lifting offshore drilling will be minuscule in aiding gas prices, and it will be 5-7 years before we even start seeing results. In an environment where gas can raise 2 dollars in the 7mo I've owned my rig... 5 years is too ****ing far away to really know the true impact of this. Personally, keep the hybrid thing going, keep research and alternative fuel science going, but this gas bubble will burst. These bubble crazes can burst overnight (Asian Financial Crisis anyone? Tulip Mania? Llamas!).


Also, with so many people getting on board with the 'green movement' oil demand will go down a bit too.

Also, maybe I've gotten too damn cynical and I should be wearing a tin foil hat, but i wouldn't be surprised if this whole gas price thing wasn't a secret ploy to get us to lift off shore drilling or open up alaskan drilling and all this other crap. Again...tin foil hat, I know. But the problem with our society is, we always want the quick short term fix...the long term problems just get passed down.

 

[ProMed]

May be a repost, but I personally haven't seen it on here. It is a very eye-opening video & Mr. Williams (the speaker) possibly put his life on the line to speak out like this. It is a very long video, but imo every word is worth listening to. It is from October 2007 & Mr. Williams correctly predicts the current $4 per gallon gas prices.

This becomes even more important considering Alaska Gov. Sarah Palin is quickly becoming a frontrunner for McCain's VP Search Team.

Video Link:
http://video.google.com/videoplay?docid=3340274697167011147