Climate

The cruel offshore-drilling hoax, Part 1

The GOP and McCain/Bush keep insisting that an end to the federal moratorium on (some) offshore drilling is a major solution to America’s oil woes, even though Bush’s own energy analysts make clear it is not (see EIA bombshell: Offshore drilling “would not have a significant impact on domestic crude oil and natural gas production or prices”³).

That Energy Information Administration analysis is, however, a couple of years old, so I called up the author today and asked if it was being updated. Turns out a new version will be published in a couple of days, but she explained to me that the “answers are not very different” — no significant impact for the duration of the analysis (through 2030) — for reasons I will discuss below. First, however, it wasn’t until I talked to her and looked closely at the original analysis — Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf — that I understood what a cruel hoax this whole issue is.

The oil companies already have access to some 34 billion barrels of offshore oil they haven’t even developed yet, but ending the federal moratorium on offshore drilling would probably add only another 8 billion barrels (assuming California still blocks drilling off its coast). Who thinks adding under 100,000 barrels a day in supply sometime after 2020 — some one-thousandth of total supply — would be more than the proverbial drop in the ocean? Remember the Saudis couldn’t stop prices from rising now by announcing that they will add 500,000 barrels of oil a day by the end of this year!

Here is the key data from EIA:

eia-table-10.jpg

Look closely. As of 2003, oil companies had available for leasing and development 40.92 billion barrels of offshore oil in the Gulf of Mexico. I asked the EIA analyst how much of that (estimated) available oil had been discovered in the last five years. She went to her computer and said “about 7 billion barrels have been found.” That leaves about 34 billion still to find and develop.

The federal moratorium only blocks another 18 billion barrels of oil from being developed. But, as you can see, most of that is off of California, which has bipartisan opposition to drilling from Republican Governor Schwarzenegger — who, unlike McCain, seems serious about his commitment to greenhouse gas reduction — and the Democratic legislature, which remembers all too well the devastating 1969 oil spill off the coast of Santa Barbara. Indeed, Karen Bass, the newly appointed speaker of the State Assembly, said, “The idea of increasing offshore drilling off the coast of California I think is absurd, and I can’t even imagine we would entertain that.” Why would they, given the risk to their beautiful coasts and their commitment to reduce statewide greenhouse gas emissions 80% by midcentury?

So that only leaves about 8 billion barrels, which is about what the world uses in three months. Not bloody much. And that assumes every other state, including Florida, goes aggressively with offshore drilling, which is exceedingly unlikely.

You may ask why big oil hasn’t gotten around to the 34 billion barrels already available to them offshore, given the staggering price for oil? The answer is pretty much the same reason why the EIA analyst told me that ending the federal moratorium is “certainly not going to make a difference in the next 10 years”: It ain’t easy being non-green off-shore.

As she explained, the constraints on offshore drilling have little to do with the price of oil, but a lot to do with timing. Once the leases are available, it is a 5 to 10 years before you get to exploratory drilling. There is a tremendous shortage of drilling rigs and manpower. Plus, offshore drilling is so expensive, you don’t want to make any mistakes. So you spend do a lot of seismic analysis to minimize your chances of a dry well.

And it is probably another five or more years from drilling your exploratory well to getting significant production from the area — and that assumes you didn’t dig a dry well. If you did, then you are probably going to be even more cautious. And all that assumes you have developed a pipeline infrastructure for delivering the oil. But the Atlantic Coast lacks such an infrastructure, so who knows how long it would take to get its oil?

Here are the assumptions EIA makes:

Assumptions about exploration, development, and production of economical fields (drilling schedules, costs, platform selection, reserves-to-production ratios, etc.) in the OCS access case are based on data for fields in the western Gulf of Mexico that are of similar water depth and size. Exploration and development on the OCS in the Pacific, the Atlantic, and the eastern Gulf are assumed to proceed at rates similar to those seen in the early development of the Gulf region. In addition, it is assumed that local infrastructure issues and other potential non-Federal impediments will be resolved after Federal access restrictions have been lifted.

And here is what EIA projects would happen to offshore oil production if the federal moratorium were eliminated and none of the states block drilling and if exploration and development of resources in those areas begin in 2012:

eia-figure_20.gif

Essentially no extra oil beyond the reference case until 2020. And then from 2020 to 2030, the extra oil production averages about 150,000 barrels of oil a day.

But of course that’s not going to happen since, as noted, absent the federal moratorium, California is not going to allow drilling off its cost. So we are almost certainly talking under 100,000 barrels a day sometime after 2020. And yet Senator McCain said:

Tomorrow I’ll call for lifting the federal moratorium for states that choose to permit exploration,” McCain said. “I think that this and perhaps providing additional incentives for states to permit exploration off their coasts would be very helpful in the short term in resolving our energy crisis.”

It is cruel to mislead the public on a subject that matters so much to all Americans. If only we had a politician willing to engage in straight talk on this important issue.

48 Responses to The cruel offshore-drilling hoax, Part 1

  1. John Mashey says:

    Oil is so valuable that it’s hard to believe that we won’t drill there, sooner or later, hopefully, much, much later so that people’s great-grandchildren have a little oil left, and only after we’ve all gotten really serious about efficiency, and maybe, by then, are using oil for uses other than burning it.

    I’ve helped sell (probably) $500M of computers to oil companies worldwide, and friends include an ex-Chairman of Shell and an ex-Vice-Chairman of Chevron, both of whom think Peak Oil is real and EFFICIENCY is crucial … and know quite well just how expensive and time-consuming offshore development is.

    Joe is right on, on this, and I just hope more politicians country-wide get the idea. The interesting question is whether or not this is a state issue, a Federal issue, or both. I.e., if FL decides it wants to allow offshore drilling, should it be allowed to?

    [Here in CA, I certainly wouldn’t expect to see drilling in my lifetime.]

  2. Paul K says:

    Energy independence is not only vital to national security, it is a necessary step in eliminating carbon based power over time.

    You have proven beyond a shadow of doubt that drilling our own resources will not affect the price at the pump. Therefore, drilling our own oil will neither raise consumption, nor hinder sales of hybrids, plug-ins and EVs. CO2 emissions are not affected.

    John Mashey identifies the rationale for using foreign oil – better to keep some for later. At one time that was a good strategic argument. But the world has changed. The massive amount of petrodollars leaving the U.S threatens our economic survival. Dependence on foreign oil warps our foreign policy. Unlike before, the technologies and efficiencies necessary to eliminate our need for oil, foreign or domestic, are available or in the near pipeline.

    Does anyone doubt that the domestic auto fleet will be 80% hybrids/ plug-in/EV in 2040?

  3. Andy says:

    This from Lisa Falkenburg of the Houston Chronicle: “One fresh idea comes from Kenneth B. Medlock III, a fellow in energy studies at Rice’s James A. Baker III Institute for Public Policy. ….he proposes a compromise to open parts of the U.S. Outer Continental Shelf to drilling, but to earmark royalties from all new OCS developments into a fund for alternative energy research.

    The way he figures it, this would allow us to reduce our Persian Gulf imports by up to 40 percent without abandoning our quest for fuels for the future. ……It would take four to five years to see a real drop, which would likely mean $70-$80 oil, which means a rough range of $2.50-$2.75 for Americans at the pump.”

    http://www.chron.com/disp/story.mpl/metropolitan/falkenberg/5876326.html

    When I first read this I thought it meant that the additional drilling would cause the drop in oil prices, but now I think it refers to the drop caused by conservation and thus reduced demand. At any rate, it’s an interesting article coming from the only large newspaper in Houston, one of the world’s oil capitals.

    Who’s going to break the bad (good) news to the U.S. public? We aren’t going to see cheaper gasoline until we don’t need it so badly. There is no easy fix. There will be no return to the “good old days” whether or not John McCain is elected.

  4. David B. Benson says:

    Who says there will be any civilization left in 2040 CE?

  5. Paul K says:

    David B. Bd talk it over.enson,
    I you’re really in that much despair, maybe we should get a beer and talk it over.

  6. Uosdwis says:

    We don’t have the refining capacity for all the supposed oil out there. But, you know, I hope if they do ram drilling through, they associate their names with it, like “the REPUBLICAN Drilling Act,” so that when it is all moot in 10-20 years, we’ll know whose stupid idea it was.

  7. Greg N says:

    You talk of “a tremendous shortage of drilling rigs and manpower”. The oil has to stay in the ground for 10 years, no matter what.

    Tragic thing is there’s also a tremendous shortage of wind turbine erection rigs and skilled wind manpower.

    In Britain, for all our talk, we can’t install much new wind capacity because the major constructors (German and Spanish mostly) are short of supply. They’re basically sold out for the next ten years for offshore wind!

    What’s needed is for oil rigs to become offshore wind construction rigs.

    That happens when the money to be made from oil plummets compared to the money to be made from wind – i.e. the opposite of what is happening in the free market right now.

  8. David B. Benson says:

    Paul K — I was really down yesterday.

  9. Peter Foley says:

    I.8 Trillion Dollars on the USA’s side of the trade imbalance makes the use of these resources mandatory. Just the lease revenues and the release of shipping for other goods will allow the rational spending of billions for actual environmental needs.

    Joe’s Anti=everything stance has me questioning his grip on reality.

    The cheaper oil/ or CTL oil is the more money to solve actual problems, the cult of sustainability has yet to grasp their group’s agenda leads to ever smaller pies to cut up. A less than Zero Sum game.

  10. John Hollenberg says:

    > Joe’s Anti=everything stance has me questioning his grip on reality.

    Actually, Joe is pro-PHEV, pro-BEV, pro-wind, pro-CSP, pro-energy efficiency, pro-California’s approach, just to name a few off the top of my head.

  11. Earl Killian says:

    Peter Foley, in addition to John Hollenberg’s point let me add a comment I made in another post. You want to drill in the US for tiny oil reserves. Why do that when there is a Ghawar waiting to be tapped right here in the US? Plug-in hybrid efficiency will be the equivalent of another Ghawar. The real reason for the drill here, drill now movement is to put money in oil company pockets; they are the primary beneficiary. The oil companies don’t care about drilling in the King of oil fields–efficiency–because they don’t earn profit from that.

  12. Peter Foley says:

    John Hollenberg, How long could California continue their irrational behavior if the neighboring states stopped providing power the export to the NIMBY nuts? Is Joe pro any thing that actually works? Best case efficiency just buys a few years, Making the pie larger, with more toppings, and cheaper is the Western culture’s way. With out cheap energy to reverse entropy, most “Green” practices are luxuries that will have to cease in your ‘high’ efficiency future.

    Earl Killian, Those oil companies are an important part of our economic system, Do you Hate your colon or pituitary gland? Hating oil companies is just as stupid. You can talk efficiency all you want, the doubling of cost per gallon will take care that without a pile of ill-planned regulations that are obsolete at passage.

    Vows of poverty aren’t part of any solution,– the irrational wealth hating needs to stop prior to attempting to change the status quo. Killing the neighbors dairy cow didn’t help the Russian’s peasants standard of living in Stalinist Soviet Union– Over taxing USA”s oil companies won’t forward any type of warmist utopia now or in the future.

  13. John Hollenberg says:

    > Is Joe pro any thing that actually works?

    Look at the per capita use of electricity in California vs. the rest of the nation. About 60% less (or more–don’t remember the exact number). California isn’t exactly hurting as far as life style. How about arguing using facts?

  14. Earl Killian says:

    Peter Foley, John Hollenberg is right. In 2005 California was 7,032 kWh per person. The rest of the U.S. was 13,085 kWh per person, or 86% higher. A model that the 40 least efficient states approach the efficiency of the 10 best states (based on new construction and remodels) has the U.S. down to 9,438 kWh per captia by 2027, with the annual electricity saved being 1,033 tera watt hours (TWh). Coal was 1,996 TWh in 2006, so just efficiency could get rid of most coal by 2027, despite population growth.

    I think your imports question shows you don’t understand what is really going on. I agree with John, try facts for a change. Remember that the plural of anecdote is not data.

  15. Earl Killian says:

    Peter Foley, attributing nonsense to someone and then attacking that nonsense shows the level of your debating. Your hate and poverty comments are indications that you have nothing real to say.

  16. John Hollenberg says:

    Probably should have been stated as 75% more use by the rest of the U.S. (average) than California. Here are the latest figures I could find from 2005:

    http://energyalmanac.ca.gov/old_electricity/us_per_capita_electricity_2005.html

    The argument isn’t about the source of power, it is about the amount used. If you can show that these figures are in error, or that more recent data doesn’t still show the rest of the U.S. doesn’t use a LOT more energy, then you will have an argument. Otherwise, not.

  17. John Hollenberg says:

    > Making the pie larger, with more toppings, and cheaper is the Western culture’s way.

    What California is showing is that the pie can be smaller, everyone can get their share and be filled up and fully satisfied with that amount. No drop in our standard of living from using less energy. Now the droughts coming our way (compliments of global warming) could be a much bigger problem…

  18. Earl Killian says:

    John, I subtracted out California and compared it to the other 49 states (plus DC). That led to a slightly different set of numbers than comparing to 50+DC. You can state it either way.

    Usually these days I compare the most efficient 10 states to the least efficient 40 (plus DC). That gives similar numbers, and it emphasizes that it isn’t just California. Those numbers are 7,774 kWh per capita for the best 10, and 13,947 for the worst 40 (plus DC). Usually when you tell people about the California success, they say “it’s the weather”. They haven’t got a clue when they say that, but they say it anyway. If you tell them the efficient 10 are California, Rhode Island, New York, Hawaii, New Hampshire, Massachusetts, Alaska, Maine, New Jersey, and Vermont it becomes clear weather has nothing to do with it. The correlation between blue states and efficiency and red states and inefficiency is high however. Ideology tends to trump practicality in red states.

    The other way it helps to show the data is as a historical graph, since it is clear that we all were at around 6-7 MWh/person in the 1970s, and then a few stayed slim (e.g. California and New York), and others gorged and bloated. You can find such a graph on page 12 of http://www.energy.ca.gov/2005publications/CEC-999-2005-003/CEC-999-2005-003.PDF

    It goes on and on, with the anti-efficiency folks trying to explain away the success of California and other states. It also helps to know that the GDP per capita is higher in efficient states than inefficient ones (e.g. California is 9th in GDP per capita), and that the 10 efficient states have consumption similar to other modern industrial countries like Japan (7,846 kWh in 2003), Germany (6,900 kWh in 2003), and Korea (7,018).

  19. John Hollenberg says:

    Earl, I saw that you had subtracted out California, but thanks for clarifying for other readers. Great info on the most efficient 10 vs. least efficient 40 states.

  20. Peter Foley says:

    JH, EK, ET al, How much of the vaunted Cali efficiency is the externalisation of heavy industry to states that actually allow production of electricity? All other things being equal, the newer infrastructure is more efficient. Does the stats include the losses on the grid from importing power? For 35 years rational heavy industry has been exiting California at every opportunity. If my state is producing aluminium for the entire country, the per capita Kilo-Watts will of course be higher. If anything the interstate differences show the harm irrational regulations have on industry.

    I’m not anti-efficiency, but it is a short term one time answer to production shortfalls.

    Just what does electrical consumption in the People’s republic of Cali have to do with liquid fuel production? Other than the selfish use of natural gas for large scale electrical production when cheaper fuels(coal/nuclear) are available that won’t raise home-owner’s heating cost nationwide. I thought the post was about lowering cost of personal transportation and reversing the balance of trade.

    Earl, 1,800,000,000,000.00 dollars = tiny. Wow, I want what you’re smoking. Impoverishing the USA isn’t the road to a ‘Green’ future. Just think a 10% tax would fund over 60 nuclear plants for the as yet imaginary electric cars.

    If all the silly ‘green’ ideas are enacted, electrical consumption per capita will have to rise to reverse entropy for all the misguided recycling.

  21. Earl Killian says:

    Peter Foley, have you ever backed up any your assertions in this forum with real data? You assert something about heavy industry with no data or references. Why would anyone believe you? Please note that California’s GDP per capita is the 9th highest despite having the lowest per capita kWh.

    Are you asserting that Japan, Germany, and Korea have no heavy industry because their annual usage is only 7-8 MWh per capita?

    Your assertion that drilling in the US will eliminate 1.8 trillion dollars of trade deficit is ludicrous. You’re the one smoking something. You’d have to produce 13 billion barrels a year to offset 1.8 trillion dollars. You would drain the 18.17 that we’re arguing about in this post in just 17 months at that rate. Then where would you be?

    Let’s say Congress folds and puts the 18.17 billion barrels up for exploration. Let’s say we pump those fields for 50 years. That’s 363 million barrels a year. That will produce something like 7 billion gallons of gasoline a year, out of 135 billion used for our 2.77 trillion miles of passenger travel (that works out to 20.4 MPG). In 2030, when those fields start producing real volume (an optimistic assumption), US population will have increased to 364M, and miles driven to 3.4 trillion, and without efficiency, at 20.4 MPG we’ll be burning 166 billion gallons of gasoline. Your 7 billion gallons doesn’t stop us from having to import an additional 23 billion barrels. Let’s compare that to what efficiency could do. Raise the fleet MPG of 20.4 to 45 by 2030. Even with the projected increase in population to 364M, and thus a VMT of 3.4 trillion miles, gasoline consumption falls from 166 billion gallons of gasoline to 75 billion, for a savings of 90 billion gallons a year. That’s more than the production from Ghawar. Compare 7 to 90 to see what I mean by tiny. And that is just by 2030. We can keep on going with efficiency (e.g. to a 100 MPG fleet in 2050).

    Efficiency never drains; it keeps on saving even when we’ve switched entirely from oil to renewable fuels. Oil fields do drain.

  22. John Hollenberg says:

    > How much of the vaunted Cali efficiency is the externalisation of heavy industry to states that actually allow production of electricity?

    Here are the approximate figures from:

    http://www.eia.doe.gov/cneaf/electricity/esr/table5.html

    Region Residential, Commercial, Industrial percentages

    U.S. 36.9% 35.5% 27.6%
    California 34.3% 46.3% 19.5%

    Region Annual KWH, Residential, Commercial, Industrial

    U.S. 12600, 4650.81, 4470.58, 3478.61
    California 7200, 2468.07, 3331.14, 1400.79

    Even if you assume that the U.S. average of 3,478 KWH per capita use for Industrial purposes is all due to more energy intensive industries, that still only accounts for 2,000 KWH of the 5400 KWH difference between the U.S. and California.

    How about using facts (which I dug up) instead of suppositions for your arguments?

  23. Peter Foley says:

    John Hollenberg, What is the annual heating degree days in LA? The true environmental impact is closer to the dollars spent by consumer, Again for the slow learners, spending ten dollars to save a dollar harms the environment as well as the future commonweal. Paying more for less–PG&G needs to be investigated for larceny.

    Efficiency is a side show, a fleet of 60mpg coffins with out oil is useless, Pump the natural oil asap, build an adequate number of coal to liquid plants to avoid any nasty periods of 4$/gallon liquid fuel while inventing the next mobile energy system for the USA of the future. I have never said the USA’s undeveloped oil fields would completely replace foreign fossil oil, that is what the massive CTL build out will do. Can’t you get your head around the fact that at $4/gallon oil can be made out of ANY handy hydro-carbons? It will raining money for the early movers into the synthetic oil market. Let us pray/vote to ensure Washington doesn’t enact some crazy anti-carbon taxes.

    Your own numbers show a seven per cent increase in fossil oil, that will lower prices at least seven percent leaving that much more money to spend on the future. Creating shortages have and will destroy the discretionary income needed to build the next energy infrastructure.

    Without long term stability of our currency, ability to spend for long term externalities like imaginary carbon-forced AGW will vanish. Any thing that improves the USA’s balance of trade is mandatory for any future that could allow luxuries such as Joe Romm’s wealth destroying anti-carbon jihad.

  24. John Hollenberg says:

    Peter, I won’t respond to diatribes consisting of speculation/opinions but not supported by facts and a carefully reasoned analysis of those facts. I urge other posters to do the same.

  25. Earl Killian says:

    John, do you think this description fits Peter Foley?
    http://en.wikipedia.org/wiki/Internet_troll

  26. John Hollenberg says:

    > John, do you think this description fits Peter Foley?
    http://en.wikipedia.org/wiki/Internet_troll

    It is possible, but my concern is that Peter actually believes these things. I have seen many people who use anecdote to support a position that has been arrived at by ideology rather than careful factual analysis. Just look at some of the Denier web sites and the kinds of posts that are left in response to a disinformation article. Anything that confirms their ideological position is gobbled up uncritically. Joe has posted on this problem here:

    http://climateprogress.org/2008/06/01/krauthammer-part-2-the-real-reason-conservatives-dont-believe-in-climate-science/

  27. Peter Foley says:

    John Hollenberg, I’m a troll who knows that increasing the supply of a good ALLWAYS lowers it’s price. In spite of this, all the watermelons(green exterior, socialist/commie doctrine) experts that want a do-over on communistic command economies. Repeating lies about increasing the supply won’t lower prices is either foolish or unethical. Why is wealth destruction linked to conservation in all solutions you forward?. Is it the original sin of the warmist movement? Your self loathing shouldn’t over whelm your understanding of basic economic facts,–don’t force society to echo your self defeating ideas on imaginary Malthusian limits on growth. For years liberals and socialists in the USA have used irrational hate of corporations to further big government which actually is a much greater threat to our future freedoms. As ever more Americans become direct stakeholders in stocks through privately owed pension plans and investments the voters will deselect the capital destorying congresspeople/parties.

    Keep posting statements that violate all know behaviors of markets,” more oil won’t lower prices”, or ” It’ll take 13 years to bring any new production on line.” Moon based oil wells perhaps? Bring some plausible statements to the table, not the straight from fact free misinformation campaign mouth. EIA’s batting average on facts wouldn’t get them on baseball teams hitting rotation. Recall the disappearing thorium? The historical record of the Alaskan oil production’s influence on US oil prices refutes all of the EIA future price claims.

  28. John Hollenberg says:

    Peter, you continue to respond with generalizations, most of which have nothing to do with the specific facts/arguments being made. I see you have made another fact-free post above, which doesn’t address any of the data that I, Earl, and others have posted. It also doesn’t address in any way the original topic of Joe’s article. Joe, can we have a bit of moderation here? How about insisting on arguments supported by specific facts, arranged in a logical way?

  29. Peter Foley says:

    John Hollenberg, It is a fact more product=lower prices, get over it. More bogus claims regarding how increasing the supply of native oil won’t improve the economic health of the USA and thus funds available for retooling the energy sources of the the future. Do I know exactly what percentage the increased production will lower future oil prices? no, but I know without a shadow of doubt the idea a 7 % increase in the supply of oil won’t lower prices significantly is Bull excretment.

    Surely some basic level of learning is a given for an exchange of ideas. If you don’t understand the basics of markets, how can you “fix” them? Did you check the market effects of opening the Alaska fields?

    The anti-industrail choir of the AGW clan

    [Peter: You are now at the edge of being moderated regularly. If you can’t ask understand basic economics — demand goes up 20% in 10 years, so new supply of 0.1% does NOTHING to prices — then I’m afraid you have no business criticizing others. This ain’t 20 years ago.]

  30. John Hollenberg says:

    Peter, the broad brush that you use to paint your reply shows your lack of careful reading of the article and previous comments. You attribute multiple statements to me which I didn’t make, so most of your post appears to be a non-sequitur to me. As far as the 7%, where are you getting this number from? Joe’s post states that the amount under consideration would be 0.1% of the total supply, which is certainly a drop in the bucket. Also, since you have no data about the size of the effect on prices, you aren’t offering any useful information. Unlike you I think that the size of the effect on prices is critical, since I agree with the IPCC and the scientists not bought off by the big oil companies that global warming is real and a very serious threat.

    > The post’s main point is false to fact, Extra oil won’t lead to lower prices is false, all historical records refute such a complete misstatement of market behavior. All the numbers in the world won’t help one without even a glimmer of understanding of market basics.

    I assume you are referring to the 2 cent savings per gallon in 2025 from drilling in the ANWR? OK, I will grant you the 2 cents as fact. Yes, numbers (= facts) are important in this discussion. I will keep bringing you back to that, as I don’t want others who are approaching this more thoughtfully to be misled.

    Oh, by the way, here are the facts regarding my statement:

    http://climateprogress.org/2008/06/04/opening-anwr-cuts-gas-prices-two-cents-in-2025/

  31. John Hollenberg says:

    Ah, yes, I see where you got the 7%:

    http://climateprogress.org/2008/06/18/eia-bombshell-offshore-drilling-would-not-have-a-significant-impact-on-domestic-crude-oil-and-natural-gas-production-or-prices-before-2030/

    This is 7% increase for domestic production. I suppose that even though it would be only 0.1% of total world production, those extra barrels of oil will be sold at below-market prices and thus bring down the cost? Your logic doesn’t make any sense. The analysis from the pro-oil administration doesn’t support your conclusions. The EIA conclusion:

    “… any impact on average wellhead prices is expected to be insignificant.”

    Apparently, doing an analysis with numbers is important… unless you have secret data not available to the EIA. Please don’t post a fact-free reply.

  32. Peter Foley says:

    [snip]

    It is the transformation of oil production rate over time where JR and the EIA create the bold face lie regarding the effects of increasing native oil production. Figures don’t lie, but liars figure. Rational Floridians and Californians will force the leasing of the fields to capture the wealth.

    [JR: Disagreement is one thing, Peter. But calling both me and EIA (!) liars means you are going to be moderated from now on. Really absurd, dude.]

  33. John Hollenberg says:

    Peter, I can’t make any sense of your ramblings, nor will I try. The one exception is this statement:

    “Rational Floridians and Californians will force the leasing of the fields to capture the wealth.”

    I can’t speak for the people of Florida, but I very much doubt this will happen in California. We still remember the nasty oil spill decades ago and won’t allow this to happen again. Unless Congress follows Bush on this issue, it won’t happen anywhere.

  34. John Hollenberg says:

    Addendum: The leaders of California (including governor Schwarzenegger) agree–no offshore drilling in California:

    http://www.sacbee.com/111/story/1082756.html

  35. Dan says:

    Peter,

    Re: “John Hollenberg, I’m a troll who knows that increasing the supply of a good ALLWAYS lowers it’s price”

    That’s not the case for those goods with inelastic (and increasing) demand curves, and I’d argue that demand for gasoline fits this profile (at least in the shorter term). The problem isn’t constrained supply (as in the 1970s), but rather a demand shock led by China and India.

    The only thing that’s going to mitigate high oil prices is a concerted, nationwide efficiency play, coupled with the increased market penetration of alternative fuel vehicles.

    When

  36. j sharkey says:

    Sometime back in last decade I heard an assertion that most of California coastal oil production was in fact used for industrial purposes (plastics, asphalt, etc) and not used for fuel. I’ve been trying to find some data on this and, so far, have not been able to turn up anything of substance. Anyone got anything?

  37. Sunny says:

    The Coastal California communities that would be gateways to
    off-shore platform jobs can not financially accommodate any influx of
    this type worker.

    Oil field workers will have to live a distance outside these areas and commute.

    Since great profit is what this oil business is all about, I wonder if there will
    be a second lower tier of salaries for new workers.

  38. Johnny says:

    Hope this gets through. I am a fourth generation oilfield worker who was able to get through college and now teach. But my brother, uncles and cousins still work throughout Oklahoma (we are American Indians) the West and even overseas (Libya). Some experiences:
    I worked on Platform A after it blew out in the SB Channel. We were still drilling. The DOG (Dept of Oil and Gas) didn’t know shyt from apple butter, so we continued drilling right under his nose.
    In 1975-76, my brother worked on the Glomar Explorer (built by Hughes to steal the russian sub). They drilled exploratory wells in the Santa Maria Basin. Oil up the wazoo. Not announced until 1980’s.
    My uncles and cousins worked on the Overthrust Belt. Deep gas wells (22 thousand plus) located from West Texas to Canada. More gas than you can shake a stick at. Right now, not producing. That was 25 years ago.
    My brother works out west on an Indian reservation drilling gas wells. In drilling for gas at 14 thousand feet, they drill through three good productive oil zones. But it will take two years for the gas to come on line and the oil companies want the gas, the next big moneymaker. Right now the oil companies are sitting on more oil than you can imagine.
    Solution? Nationalize oil. Just make noise like you are going to and they will “find”more oil overnight. We are fools to wait for the oil companies to solve the “energy crisis.” Require local govts now to install passive solar systems on all new housing. Cause in two years , Natural gas goes through the roof. Require 30 mpg in cars. Waiting for the oil companies just gets you higher prices. Wait and see. I could tell more horror stories about oil on Indian lands but no one believes it. Arab oil is the new Indian oil.

  39. Megan Michaels says:

    I post a great deal of your information on current tv. Many of us are not scientists and although I am an avid reader and have the book Hell and High Water and numerous other ones……I think I am a minority when it comes to enough time and energy to read all that is out there.

    Anyway, what I am wondering is if in your climate progress reports you could put some compelling photos there as well? It would help generate more interest in your topics. Believe me many of us are reading.

  40. Repugs says:

    I like and agree with the whole article’s premise and points except that i would have to disagree with the estimates off the atlantic coase and gulf around florida.
    The estimates off the OCS are old and were done with very old technology and practices, and thats easily recovered oil. The fact is, there is pry a LOT of oil under the OCS on the east side and west side. Obviously, the Oil compnies know this or they wouldnt be throwing everything they’ve got at the politics of getting the leases. They know more than we do about oil and they dont like to drill for nothing. Also now they have better technology and equipment to drill for, find, and get difficult oil.
    Thats why our US companies were trying so hard to deal with that cretin Hugo chavez, because the oil fields off their coast are HUGE, but heavy dark sour oil that is more expensive to get and refine. We’re the only ones with ability to do it.

    But, i think they need to put a cork in the idea that they can get any significant oil from any new place in less than 10 yrs. Because they are already experiencing a shortage of manpower and skillsets for oil recovery. They also dont have the rigs available and are scramblin to build enough to satisfy the CURRENT demand for them. Let alone scores more over millions of acres of ocean, at big depths.
    Not including the amount of permits, and plans they have to submit to be approved…. its a bit rediculous for FIxed news casters to stand around promoting that they can get oil so quickly if we just open up the OCS.

    Why doesnt someone Ask the Oil companies and politicians to sign a Guarantee that they can get oil out in 1 year and still pump oil at all the same places they currently are at the same time. If they fail to get 100,000 barrels a day in less than 1 yr, then they pay a fine and forfeit the leases.

  41. Scott says:

    I have been using the drudge report for the past few weeks, just to see what people are talking about on those news sites and their opinions on everything.

    I just want to say that I started losing hope in humanity until I stumbled upon this site. It is GREAT to see some intelligent people debating real issues here. Thanks everyone!

  42. Sue says:

    In regard to the DOE table on kilowatt/hour usages and costs, am I right in assuming that the single industrial user in Washington, D.C. is the Federal government? If so why are we paying such a high per kilowatt hour charge? Is that why we have so much heat without real light? (Sorry, that’s not a fair question to ask.) This site, which I just discovered, is very helpful in understanding more about energy usage and availability. I want the facts, not the claims. My family and I are struggling with the sudden and extreme rise in energy-related costs as are so many others and I understand our national impatience with this situation. But I have grandchildren to think about and I want them to have decent lives. I was a child in the WWII days. I am not afraid of some changes in our lives that involve being more careful and less wasteful. I remember gas and tire rationing, sugar rationing, gardening and saving paper and cans. I’m already doing some of this and encouraging my family to do these things, too. We are definitely asking, “Is this trip necessary?” and “Do we need the air conditioning today?”I know inflating my tires might save a little gas and make my retirement budget stretch a little. But your work here and the debate it shares helps
    me understand more about the bigger arguments and possibilities. Thanks to all those who are making an effort to put fact-based ideas and info on here.

  43. charles says:

    Sarah Palin letter to Harry Reid on Energy Policy.
    Is she a “Energy Expert”?
    http://strategicthought-charles77.blogspot.com/2008/09/sarah-palin-letter-to-harry-reid-on.html

    Any comments??

  44. Laura Marsh says:

    I honestly think we need to start thinking about using other fuels such as Natural Gas and stop thinking about hybrids because no one seems to think about what we are going to do with all the batteries from all these vehicles. What are we going to do? Fill up our landfills with batteries that can not be recycled!

  45. Laura
    Power companies are interested in buying batteries from electric cars and hybrids after they have outlived their usefulness in cars. They are said to still have a lot of life in them when they are no longer strong enought to power a car.
    The power companies would use them to modulate the power grid, storing electricity for when the grid needs it. This would have the advantage of reducing the buying price of the new car. In essence the battery would be partially pre paid for.

  46. Chris says:

    First I just want to say Earl Killian, Those oil companies are an important part of our economic system, Do you Hate your colon or pituitary gland? You can talk efficiency all you want, the doubling of cost per gallon will take care that without a pile of ill-planned regulations that are obsolete at passage. I want the facts, not the claims.

  47. Peter Walker says:

    Has anyone ever taken this obvious mumbo jumbo about offshore drilling as anything other than political blah blah blah along the lines of obscene oil profits, class warfare, top 2% and so on?

  48. Jo Coks says:

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