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A little perspective on offshore drilling?

post #1 of 9
Thread Starter 

You might have heard (or heard about) President Bush announcing the end of the Presidential ban on offshore drilling today. If you caught the speech, you would have heard Bush talking about how energy prices are high because of the Democrats and environmentalists.

Well the latest Energy Information Administration (EIA) report on the issue ("Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf -- http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html) outlines the difference in output if the protected areas are opened up, and how, because of the cost and time needed to develop the infrastructure to exploit the reserves, there would be very little output until 2020. At this point, if the ban is lifted the report states that:

"...annual crude oil production in 2030 is projected to be 7 percent higher—2.4 million barrels per day... compared with 2.2 million barrels per day [if the protected areas are still protected]. Because oil prices are determined on the international market, however, any impact on... prices is expected to be insignificant. "

What does that mean?

Daily world oil production is currently 73 million barrels a day (http://www.eia.doe.gov/aer/txt/ptb1105.html), so opening the entire OCS would only increase daily world output by 3%, and not until 2030. Opening up the protected areas only adds 200,000 more barrels a day, which is only 1% of current US daily oil consumption (http://www.eia.doe.gov/basics/quickoil.html ) or 0.2% of daily global oil production.

The report also identifies 40 Billion barrels of crude oil that are currently available for exploitation in the OCS that are not in the protected areas but have not been developed. How much oil is that? 40 billion barrels divided by 2 million a day is about 20,000 days/54 years worth of production.

 

Perhaps I'm missing something crucial in Bush's plan or not reading the report correctly but I don't understand what drilling in protected areas has to do with any of this. There is plenty of oil in the available areas, and it would seem that there is so much they can't even develop it all at the moment.

Personally I'd rather Bush acted in the short term, and did something like addressing the poor state of the US dollar (If the dollar was stronger, gas would be much cheaper), and acted to help in the long term by increasing the CAFE standards so that we catch up with the rest of the world and save us all hundreds a year. In 2012 European cars will need to get 52 MPG, but we won't see an increase to 35 MPG until 2020 (it's 25 MPG at the moment), even China requires 43 MPG now!

I'd also prefer that Bush spend more money locally on developing OUR infrastructure (which the EIA report states is the biggest limitation on how much oil we can produce in the OCS) rather than in a certain Middle Eastern country, but that's another issue.

 

What do others think about this?

post #2 of 9

Nah you're not missing anything kiwi, you nailed it.  I read the same report, in fact.  Offshore drilling is nothing more than an empty appeal to the masses.  People want lower gas prices, and 'offshore drilling' sounds like it will accomplish that, as long as you don't look into the details.

 

As a matter of fact, McCain said the exact same thing in May.  He made a statement against offshore drilling because it wouldn't have increase production for 7 years, even then would barely have any impact on gas prices, etc.  Less than a month later, he completely flip-flopped and came out in support of offshore drilling because (paraphrasing) 'Americans need short-term relief on gas prices'.  It's a good thing he wasn't on the straight talk express when he pulled that BS out of his butt.  I've come to expect this kind of garbage from oil man Bush, but I'm losing all respect for McCain.  First the gas tax holiday, and now this.

 

A real solution to high gas prices would be to increase efficiency and switch to alternative fuel technologies.  These ineffective gimmicks are just distractions, not solutions.


Edited by dana1981 - Wed, 16 Jul 2008 04:37:04 GMT
post #3 of 9

I did think it is retarded that out CAFE standards are so low, and rise so slowly. I've heard the excuse that car makers need the time to develop the more fuel efficient cars but that's bull****, they're already selling those efficient vehicles in Europe and Asia.

 

As for offshore drilling, I am tired of the "it won't come online fast enough" argument. There's a Chinese saying that states: The best time to plant a tree was twenty years ago, the second best time is now. Yes new oil won't come online for a while, but the price of oil is partially calculated by the futures market, so it will have an impact before it comes online.

 

That's odd about the amount of oil in the unprotected offshore areas vs protected areas. However, I think this statement and the push by the republicans (and many democrats as well) will spur production into all of those places, they are createing a demand for offshore oil drilling in the populace and basiclaly pushing the oil companies into drilling there. The general populace doesn't know which areas are protected and which aren't, I certainly don't, nor do I care.

 

If we really want oil, other than offshore drilling we should be aggressively tapping the oil resources in the dakotas and montana, there's supposedly trillions of barrels worth up there.

 

On the other hand, the high oil prices are really driving demand for more efficient and greener technologies, so I can't be too upset about it. I can still afford fuel, but it is getting more painful at the pump these days.


Edited by stins - Wed, 20 Aug 2008 16:48:40 GMT
post #4 of 9
Quote:
Originally Posted by mattress:

I did think it is retarded that out CAFE standards are so low, and rise so slowly. I've heard the excuse that car makers need the time to develop the more fuel efficient cars but that's bullshit, they're already selling those efficient vehicles in Europe and Asia.

 

As for offshore drilling, I am tired of the "it won't come online fast enough" argument. There's a Chinese saying that states: The best time to plant a tree was twenty years ago, the second best time is now. Yes new oil won't come online for a while, but the price of oil is partially calculated by the futures market, so it will have an impact before it comes online.


 

Yeah, the automaker argument that they can't provide more fuel efficient cars is total crap.  Really what they meant was that they could provide them, but the US demand for fuel efficient cars wasn't sufficient.  Now that's clearly no longer the case.  We should be increasing CAFE standards rapidly.

 

As for offshore drilling, you're missing the fact that oil prices are set on the international market.  A small increase (or potential increase) in oil production is going to have a negligible effect on gas prices.  For example, it's estimated that drilling in ANWR will lower gas prices 3 cents per gallon by the year 2030, as I recall.  Increased offshore drilling would have a similar impact.

 

At this point we just need to face the facts that gas prices aren't going to be coming down, and there's really not much we can do about it except adapt by increasing efficiency and moving to different technologies.  Trying to delay the inevitable is pointless, and not a very American way of doing things.  We're supposed to be the innovators.

post #5 of 9

actually gas prices will be coming down once China and India remove/lower their subsidies of the fuel, India after their elections and China after the olympics. There is artifical demand for oil in those countries, Indians are still buying gas at $70/barrel prices, this is inflating demand and boosting prices for the rest of the world.

 

Adding a trillion barrels of oil to the market  will also have an effect on the price.

But yes, the prices will never go down to the point where they can compete on cost with electric vehicles.

post #6 of 9
Thread Starter 

When you refer to the oil in the Dakotas and Montana, which oil are you talking about?

 

I going to assume oil shale?

 

I've read various things about this, especially about how efficient it is, and from what I have read the energy output for oil shale is terrible compared to other energy sources.

 

And the big thing that is often overlooked is that it requires a lot of water to process. Last time I checked the Dakota's and Montana weren't exactly flush for water. Isn't the Colorado in the middle of a huge drought?

 

I don't understand why people aren't getting behind doing the easy things - like raising the CAFE standards or investing in sustainable public transportation and shipping. Instead people are talking about pouring money into large long term projects.

post #7 of 9

Yeah, according to mattress' link

 

"Trillions of barrels of oil equivalent are buried within North America in the form of shale oil, oil sands, coal, and gas."

 

And yes, oil shale is an extremely poor energy source.  So are tar sands.  It takes a lot of energy to get them out of the ground, and a lot of CO2 emissions.  And that's before the oil is even burned.

 

This just shows how addicted we are to oil, that we're even considering going after oil shale and tar sands rather than focusing on efficiency and alternative energy options.

post #8 of 9

I think we should do both. Because we are so entrenched in oil, the transition away from it is, by necessity, a slow one.

 

If you decide to switch to solar energy, you don't disconnect your grid power after you have one functioning panel installed. You use both until the solar panels are able to power all of your energy needs.

post #9 of 9
Quote:
Originally Posted by mattress:

I think we should do both. Because we are so entrenched in oil, the transition away from it is, by necessity, a slow one.

 


 

But that doesn't address the issue that increased offshore drilling (or exploiting oil shale and tar sands) will have a negligible effect on overall oil production and gas prices.  However, oil shale and tar sands in particular will have a negative impact on the environment.


Edited by dana1981 - Thu, 17 Jul 2008 17:32:38 UTC
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