Executive ban on offshore drilling lifted

Great Debates
1

Bush lifts executive ban on offshore oil drilling.

Obviously congress would still need to follow suit for this to have any real meaning; however, this does appear to be a first step.

My opinion is that even if this does not do much to reduce the price of oil or natural gas, at the very least it would be a strong revenue generator for the government. The government would generate billions from lease sales, royalties, and taxes.

It would also reduce some of our hypocrisy of requesting Saudi Arabia to increase production when we don’t maximize our own reserves.

Finally, it would be a symbolic move that could have a positive effect on the futures market.

What is the downside? It seems like the main objection is that it will not solve the energy problem because either the reserves are too small or they take too long to develop.

2

[QUOTE=LonghornDave]
Bush lifts executive ban on offshore oil drilling.

Obviously congress would still need to follow suit for this to have any real meaning; however, this does appear to be a first step.

My opinion is that even if this does not do much to reduce the price of oil or natural gas, at the very least it would be a strong revenue generator for the government. The government would generate billions from lease sales, royalties, and taxes.

It would also reduce some of our hypocrisy of requesting Saudi Arabia to increase production when we don’t maximize our own reserves.

Finally, it would be a symbolic move that could have a positive effect on the futures market.

What is the downside? It seems like the main objection is that it will not solve the energy problem because either the reserves are too small or they take too long to develop.
[/QUOTE]

I am completely in favor of this move, for all the reasons you mentioned with the caveat that we don’t bring more supply online and then revert back into complacency regarding the need to continue to develop a viable automobile replacement that runs on…something other than petroleum-based fuels.

And in addition to offshore drilling, we need to expand and extract as much oil as we can from the Green River Basin and places like the Bakken Formation, as well as look into the viability of ANWAR.

I believe the environmental risks are worth doing this as a stopgap measure (and only as a stopgap measure) in order to stabilise our oil supply and prices, lessen our dependance on foreign oil (if possible), and particularly, ease our transition into an alternate mode of transportation.

Even if none of this oil becomes available for 3-5 years, I think it will cool off oil futures in the short term by restoring confidence that the USA is serious about energy independence, as well as I simply don’t think we can wait any longer to put this type of action into motion. We’ve waited far too long already.

3

I think this means nothing. If I were an oil company, I’d be hesitant to start spending money when the ban might be back next January - not to mention the inevitable lawsuits that are going to be popping up.

4

[QUOTE=Voyager]
I think this means nothing. If I were an oil company, I’d be hesitant to start spending money when the ban might be back next January - not to mention the inevitable lawsuits that are going to be popping up.
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What lawsuits? If the ban is lifted at the federal level (as it is a federal ban), on what grounds can a state/municipality/person sue for?

5

[QUOTE=FoieGrasIsEvil]
What lawsuits? If the ban is lifted at the federal level (as it is a federal ban), on what grounds can a state/municipality/person sue for?
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Environmental impact, protected species, health concerns, you name it, there will be a lawsuit.

The problem with off-shore and ANWAR is that they are short sighted solutions to a long term problem. We need to change the way we use energy, not just look for more. These type of changes are band-aids on a chainsaw wound.

6

[QUOTE=Telemark]
Environmental impact, protected species, health concerns, you name it, there will be a lawsuit.

The problem with off-shore and ANWAR is that they are short sighted solutions to a long term problem. We need to change the way we use energy, not just look for more. These type of changes are band-aids on a chainsaw wound.
[/QUOTE]

Clearly, it is not a longterm solution. That doesn’t mean it is a negative though. Increasing fuel efficiency standards won’t solve the problem either. Neither will building wind farms, building some nuclear plants, investing in ethanol research, increasing mass transportation use, or any other single item. That doesn’t mean we should dismiss any of those items. How would permitting offshore drilling be a negative? If nothing else, it generates revenue that a country with a deficit as big as ours could definitely use.

7

[QUOTE=Telemark]
Environmental impact, protected species, health concerns, you name it, there will be a lawsuit.

The problem with off-shore and ANWAR is that they are short sighted solutions to a long term problem. We need to change the way we use energy, not just look for more. These type of changes are band-aids on a chainsaw wound.
[/QUOTE]

Well, those lawsuits would only apply if there was actually an environmental disaster, right? And aren’t most oil issues environmentally speaking more involved with the transportation of the oil on ships rather than the extraction/refining of it?

As to the second part of your post, I don’t know about that man. As I stated previously, provided this increase in production is economically and environmentally feasible, AND is done with a tip of the cap to not losing sight of the big picture of development of new technologies for non-oil transportation, I think it’s been past time to do this.

8

[QUOTE=LonghornDave]
My opinion is that even if this does not do much to reduce the price of oil or natural gas, at the very least it would be a strong revenue generator for the government. The government would generate billions from lease sales, royalties, and taxes.
[/QUOTE]
Would it? Oil is at record high prices. It’s a sellers market, which should put the government in a strong position to get top dollar for the right to extract oil from lands it controls. But I never hear anyone discuss the revenue angle.

The conspiratorial angle is that the government, under President Bush, would approve drilling rights under favorable terms for the companies that do the drilling. (“We approved these leases at the established rates,” not mentioning that the rates were established in the 50’s, or something like that.)

As I said, the government is in a strong position; it has something that people want and will pay for. The fact that the president hasn’t mentioned this, and talks about drilling as a favor to the people, makes me suspicious.

9

[QUOTE=Robot Arm]
Would it? Oil is at record high prices. It’s a sellers market, which should put the government in a strong position to get top dollar for the right to extract oil from lands it controls. But I never hear anyone discuss the revenue angle.

The conspiratorial angle is that the government, under President Bush, would approve drilling rights under favorable terms for the companies that do the drilling. (“We approved these leases at the established rates,” not mentioning that the rates were established in the 50’s, or something like that.)

As I said, the government is in a strong position; it has something that people want and will pay for. The fact that the president hasn’t mentioned this, and talks about drilling as a favor to the people, makes me suspicious.
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The MMS (Minerals Management Service) conducts their lease sales through a competitive bid process. High bid wins.

The MMS then gets a royalty interest in the properties. If you are unfamiliar with royalties, they are an economic ownership interest without the burden of expenses. I believe the typical federal royalties rates are 12.5%. This means that they get 12.5% of the revenue without paying any of the expenses. Obviously, the better the commodity prices, the better the royalty payment.

On top of that, they would obviously get whatever other taxes a company would pay.

10

[QUOTE=Telemark]

The problem with off-shore and ANWAR is that they are short sighted solutions to a long term problem. We need to change the way we use energy, not just look for more. These type of changes are band-aids on a chainsaw wound.
[/QUOTE]
I disagree. We need oil in the short term and the tax revenue from that can be used for long term solutions.

The part of ANWAR that contains oil is part of the North Slope oil field which we went to great lengths to develop. There is already a coast to coast pipeline built specifically to maximize this field. I don’t know where the idea that it would take 7 to 10 years to produce oil when this pipeline was built in 2 years. We need the oil and nothing that can be developed in the next 2 years is going to provide the energy that we need NOW. China and India are putting cars on the road at an incredible rate.

11

We will soon see who is more powerful. The Eco-weenies or the Democrats in congress who want to stay in office.
As a middle class voter who considered voting for Obama… no way at this price point dude. I love the clean rivers and lakes. But not if it is going to cost me my house.

12

As I’ve stated in other threads, the discussion always center around more, more, more oil. And nary a thought about conservation. Conservation doesn’t take years to develop and spend billions in the process. It also doesn’t concentrate excessive wealth in the hands of a few corporations. So why is there no media discussion about conservation? Or is the almighty dollar and the American ego more important than low cost measures to reduce energy demands? Any talk of drilling for more (domestic) oil while under the paranoia cloud we have today merely delays the inevitable, and at what cost?

13

Why is there a ban on off-shore drilling in the first place? The article did not say.

14

I don’t know the situation in other coastal states, but there is zero chance of there being any drilling off the coast of California in my lifetime (I’m 46). Both the state government and all coastal local governments are dead-set against it.

Ed

15

[QUOTE=suranyi]
I don’t know the situation in other coastal states, but there is zero chance of there being any drilling off the coast of California in my lifetime (I’m 46). Both the state government and all coastal local governments are dead-set against it.

Ed
[/QUOTE]

I don’t think they can prohibit drilling in federal waters offshore of California. They can prohibit drilling in state waters. They could also probably keep pipelines from being built to bring production onshore. Also, it is worth pointing out that there is already production in state waters in California.

16

[QUOTE=Duckster]
As I’ve stated in other threads, the discussion always center around more, more, more oil. And nary a thought about conservation. Conservation doesn’t take years to develop and spend billions in the process. It also doesn’t concentrate excessive wealth in the hands of a few corporations. So why is there no media discussion about conservation? Or is the almighty dollar and the American ego more important than low cost measures to reduce energy demands? Any talk of drilling for more (domestic) oil while under the paranoia cloud we have today merely delays the inevitable, and at what cost?
[/QUOTE]

Conservation would be great. In fact, consumption is already declining considerably in the U.S. Further, declines would definitely help. Any reasonable solution would incorporate increased fuel efficiency standards and other conservation methods.

Conservation would take years to develop and would cost billions though. Do you think we could just cut our consumption in half immediately and eliminate our need for foreign oil? How would this be accomplished?

Also, these corporations you are talking about are publicly owned. This is no concentration in their ownership. They are owned by millions of Americans.

17

[QUOTE=FoieGrasIsEvil]
Well, those lawsuits would only apply if there was actually an environmental disaster, right?
[/QUOTE]

No, they will be filed to prevent development from taking place because of the risk of environmental disaster.

18

[QUOTE=antechinus]
Why is there a ban on off-shore drilling in the first place? The article did not say.
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A lot of it has to do with the Santa Barbara oil spill from 1969.

I wish I were living in the world FoieGrasIsEvil is, where lawsuits only get filed when they are sure things. I have no idea on the validity of the lawsuits, but they will happen, and nothing is going to happen with the drilling until Bush is long out of office.

19

[QUOTE=LonghornDave]
I don’t think they can prohibit drilling in federal waters offshore of California. They can prohibit drilling in state waters. They could also probably keep pipelines from being built to bring production onshore. Also, it is worth pointing out that there is already production in state waters in California.
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Grandfathered in. I’m talking about new drilling.

I’m still highly skeptical that the federal government will start new drilling off the coast of California despite strong opposition by the state government.

People here remember the Santa Barbara oil spill, mentioned above.

The situation is different than in, say, ANWR, where from my understanding Alaska is actually in favor of drilling, or at least neutral.

Ed

20

[QUOTE=LonghornDave]
Conservation would be great. In fact, consumption is already declining considerably in the U.S. Further, declines would definitely help. Any reasonable solution would incorporate increased fuel efficiency standards and other conservation methods.

Conservation would take years to develop and would cost billions though. Do you think we could just cut our consumption in half immediately and eliminate our need for foreign oil? How would this be accomplished?

[/quote]

Well, if the offshore drilling would provide for half our oil needs you’d have a point. Do you deny that conservation, in the time required to get offshore drilling online realistically, will have a lot more impact with less environmental risk?

When is the last time the CEO of Exxon asked your opinion? When is the last time you voted your shares and made a difference?