Most electricity in the US is already produced from domestic fuels, the biggest source being coal (source: Net Generation by Energy Source by Type of Producer). Oil isn’t really a big factor in electricity generation.
::sigh::
I guess I have to explain at “face value.”
-There is no global oil bucket.
-Commodities markets typically do not serve as ordering invoices. They are price hedging mechanisms.
-Transportation costs money, so domestic production is most economically consumed domestically
-The concept of letting a third party drill land while the owner or country in question still retains rights to the oil produced is an old one, well established, in use, and rapidly becoming the norm.
-My sarcastic posting is very funny and effective
-The concept that if we drilled a lot the production would just be sold off to other countries is not necessarily true and reflects a somewhat naive and simplified view of modern leasing arrangements.
-If we drilled a whole bunch we could be energy independent until we ran out of oil
-Mareseadotes and doseadotes and lillambs eadviy.
While I agree that more oil is not a cure all, even if it is all dumped on the global market ti would still have a positive effect due to the laws of supply & demand. More supply = cheaper overall price = good for us at the pump.
As for the “why bother, we won’t get any for 10 years” crowd, so far I see your alternatives as adding the following:
Windpower farms
Clean Coal Power Plants
Nuclear Power Plants
Solar Power Arrays
Natural Gas Power Plants (not mentioned much in this thread for some reason)
With the other alternative - conservation
Windpower farms - those same large wind turbines farms that the green crowd and PETA are fighting, along with Ted Kennedy.
Clean Coal technology - Do we yet have this perfected and economically viable or is it still “in development”? If still in development, how many years plus how many more years to license, design & build any power plants
Nuclear Power - Want to talk about 10 year delays. You might want to look into how long it takes to license, design, and construction a nuclear power station (with the green crowd fighting you every step of the way)
Solar Power, such as Concentrating Solar Power Systems for large scale power generation. Power Tower & Trough systems are getting better but limited to the arid southwest. If we covered 10% of Nevada with reflectorswe could feed the country’s needs into the power grid from there.
Natural Gas - What the pipe line currently being planned and constructed will bring from Alaska (Thanks, Gov Palin)
Conservation - yes we can make some headway here but without major culture changes results will be limited. Mass transit systems could be added and enhanced but beyond major metro areas it’s really not an option. There would be a health benefit to all of us parking our cars and riding bikes but commuting distances make this a non-option as well.
So if you think waiting 10 years for results from new drilling is too long to even consider starting now, you might want to rethink that again.
When it comes to things like energfy policy, I most certainly want politicians who will plan 10+ years ahead. Conservation also plays a big part, but we need to be thinking of approaches that will succeed over the next 50 years, not dismissing anything that is not a quick fix.
The problem is not that 10 years is so long it’s not worth drilling at all. The problem is that drilling is being presented as a short-term remedy for high gas prices, and high prices for everything else, and that’s simply not the case.
True, but right now we also need some rapid amelioration of the current fiasco.
So what you got that takes less than 10 years?
I’ve a couple of questions; please forgive my shocking lack of knowledge of business.
Surely this holds true both ways, though? If companies have the ability to provide oil to the U.S. more cheaply than importing, isn’t it reasonable to conclude that an increase in the domestically avaliable oil will mean they’ll keep more of their foreign-sourced oil outside the country?
Is it likely at all that should such an agreement be made, the third party in question will then go on to sell any other oil that the owner or country in question no longer needs or will pay for to such an extent to someone else? In other words, if we tied them down to getting this oil, what’s to stop them from selling a similar amount elsewhere?
Do you provide a mentoring service of some kind?
In other words it is arbitrary. Why not nine years? Eight? Twelve? Six? And since you’re using metrics of time and effectiveness, can you show how quickly those other options would deliver results and how much. I know that seems like a lot to ask for, but based on the conclusion you’ve arrived it, I have to assume you’ve done that work already. See can you share it?
But the money to drill would come from the oil companies, right? If if you expect those same entities to do the work developing those other options, do you really think they don’t have the money to do so?
You’ll forgive me if I don’t think what you WANT has any real sway on what SHOULD be done.
Opening additional offshore drilling areas is no more certain to produce significant energy than solar or wind within ten years. You are making a foregone conclusion that all this new oil has just gotta be out there in the absence of any evidence to support it; how is that different than my predictions for solar and wind power?
I’ll echo what has already been said. What’s wrong with developing both. we are not in an either/or situation. In fact, let’s do it all.
Because drilling in those areas was banned for a good reason. They are environmentally sensitive areas that also generate billions of dollars of tourism revenue that would be put at risk by one oil spill. The meager benefit projected by the DOE for drilling in the restricted offshore areas is not worth the risk, and most of the residents in those areas whose jobs depend on it agree.
Because while the extent of the reserves is unknown, what IS known would be quite profitable…unless the price of oil goes through the floor in the next 5-10 years. Solar? Completely unknown if it will EVER be viable on a large scale…same with wind. I THINK it will be…but it’s not today and may not be tomorrow either. It relies on some technological breakthroughs to make it more efficient, less foot print, and more economical. Well, technological, economic or legislative I suppose.
But oil is a known commodity…we KNOW it’s worth at least $100/barrel. Unless you think the price trend is going to reverse and go down. That COULD happen I suppose…but it seems unlikely to me.
Again though I’m asking…why does it have to be one or the other? Why can’t we have both…or all three? Or four? Or more? While we are sitting about waiting for solar and wind to become ready for prime time why can’t we also be exploring for more oil…and exploiting what we find? Those billions of dollars (and I think I’m on pretty safe ground speculating that just the new fields in Alaska will produce billions MORE for the government) and jobs and increased capacity…all of that jazz would inject more money and capital into our system. Capital is what is going to get those magic ponies shod, saddled and ready to ride.
-XT
It was banned for the same ‘good reason’ that our nuclear power capabilities were neutered…because the environmentalist groups in this country are strong enough to get it done, their lobbyists are powerful enough to push through their agenda.
Out of curiosity, where are you going to put all those solar panels? How about the wind farms? Will none of this stuff have an environmental impact? Not even talking about the ECONOMIC impact of trying to put such technology in production on the scales we would need to make a difference…just asking about what the environmental impact of it will be. Will it be a strictly local impact? Sort of like the impact from, say, mining coal? Oil? Nuclear power generation?
There aren’t any free rides. No matter what we do, if we do it on a scale that would make a difference it’s going to have an impact. It’s all about the cost to benefit ratio. Billions of dollars to our government, thousand of jobs created…verse the possibility of a localized environmental accident that we would have to go in and clean up. I’d say it’s a no brainer…especially considering that this isn’t the 60’s or 70’s…or even 80’s…anymore. We DO have much stricter environmental regulation these days.
-XT
So are you claiming that utilization of the coastal areas for recreation would cease if off-shore drilling were allowed? Before making such a claim you might want to visit the Gulf Coast. I haven’t noticed any shortage of people enjoying the beach and as far as off-shore fishing. Most of the choice fishing spots are around the drilling rigs. Ends up they create a fishery habitat not impede it.
Why should we risk sensitive environements, and billions of tourism dollars and thousands of jobs for relatively small profit for the stockholders of oil companies? Not worth it HERE!, not worth it NOW!
Because the risks are minimal while the rewards are great…and not just for the stockholders, though you keep saying that. WE, the people, get our cut too. Or do you think billions of dollars in tax revenue is nothing?
Besides, we are ALREADY drilling offshore…and in Alaska. And yet we still have tourism and tourism related jobs.
We are sort of wandering far afield of the OP in any case. The question isn’t does the costs outweigh the benefits (I think it does, you disagree…c’est la vie), but if by opening up drilling it brings us a step closer to ‘energy independence’. The OP claims opening up oil drilling does ‘NOTHING’…and I think that’s been shown to be an exaggeration. Just like the claim it will somehow make us magically energy independent is an exaggeration. As with most things the truth is somewhere inbetween the opposing rhetoric.
-XT
2 questions: do you think demand for oil will go up or down in the future? and do you understand that the ban on additional offshore drilling has been lifted?
Odd… I thought you were a proud laissez-faire capitalist. Apparently not so much when your tank needs filling.
Are you sure Schlumberger has taken leases in Russia. I’d be very surprised, schlum is a huge service company and may be managing some drilling projects or doing field wide production enhancement work, but I doubt that they are taking leases on fields. They had a long standing statement that they would not take equity in fields as it was seen as a very very bad idea to compete with your customers (shell Exonn ARAMCO etc etc ). That and Schlum did not/does not have the capital set up to deal with getting into field ownership (same can be said for Halliburton, Baker, Weatherford and the other major service companies all of whom have been seriously burned back in the turnkey drilling phase that was popular a few years back).
Well, no it’s not, actually. How about you dig deep down and try to show just the slightest trace of respect for the viewpoints of others, and maybe we’ll return the favor.
Please note that I work for a mid-sized oilfield service company, and while I do not claim special knowledge of the economics of this industry, I am currently working on a US business plan for my employer, so I have had to contemplate this subject for a while now. One thing that becomes clear is that US domestic oil reserves, whether onshore or offshore, are not enough to achieve independence from foreign-source oil, no matter how much drilling may be done, and never will be. The only remote possibilities for actual energy independence are to shift a large proportion of energy usage away from oil, and/or reduce world (not just domestic) energy demand.
We are already drilling a whole bunch, and nearly all the available rigs and crews are currently employed. There are approximately 2000 drilling rigs currently operating onshore or offshore in the US; this is one of the higher levels of drilling (although not the highest) in US history, and there are about twice as many drilling rigs operating in the US as in the rest of the world combined. Cite. To achieve a higher level will require a considerable, long-term effort in building equipment and training personnel that has not even begun yet.
If one investigates further, however, close to 80% of all domestic drilling is for natural gas, not oil, and the proportion of gas drilling has been rising in recent years. This is mainly because the economics of producing natural gas are more favorable, and they are more favorable in part because apparently most of the large or less-technically-demanding oil reservoirs likely to exist in the US have already been found. Drilling in the newly-opened areas of the outer contienental shelf (OCS) likely will temporarily reverse this trend somewhat, but it does not currently appear that oil and gas fields likely to be found off, say, the Atlantic coast, will exist in as large numbers or be as prolific as those in the Gulf of Mexico. Likewise, on land, oil shales and tar sands potentially can add significantly to this total, but the technical and environmental difficulties associated with extraction mean that these are not likely to be economically viable until prices rise consistently to a much higher level.
Look, I’m all for increased exploration on the (OCS), but I haven’t yet heard a rational argument, in this thread or elsewhere, as to why ‘energy independence’ is so urgently required, except perhaps to achieve some stabilization of product prices. Again: there is not enough domestic oil practically available in the US to achieve anything like energy independence, and there likely never will be. Go ahead and try to reduce demand, carry out additional domestic drilling, and find alternative sources of energy, but do so because inevitably, world hydrocarbon supplies are going to dry up, not because of some pipe dream about the dubious benefits of ‘energy independence’.