Oil questions, why no new US wells, refineries, why just light and sweet?

Great Debates
1

It seems to me that not only did the environmentalists shoot us all in the foot by being successful in limiting our domestic oil sources, refineries and the use of ‘cleaner oil’ meaning that we need the more expensive light and sweet stuff, but also shot the earth in the foot in the process.

Why?

Because we have some of the highest environmental standards in the world. Who would be better at pumping oil, and spill cleanup then the US? Who would make cleaner refineries? Who would be able to convert sour and heavy crude to it’s cleanest state?

Instead we have countries w/ very little environmental regulations doing the above, and poisoning our air, water, and getting ducks all full of oil.

2

Our domestic resources are pretty much tapped and wouldn’t have an effect on prices or overall supply. It would just add several million more dollars to some oil company’s wallet.

Your OP is ill-informed. As usual.

3

Very, very uninformed.

Take the “number of refineries” issue. We do not lack in number of refineries. The number of of refineries does not the production of gas! If you want to make more gas, increase the capacity of existing refineries (which has been happening all the time for decades). Strange how people point out the lack of new refineries over the years, but not the significantly increased production of refineries during those same years.

(Note: the distribution of refineries is bad. Too many in the gulf coast, not enough in the PNW, etc.)

There are a lot of industries where the number of factories is declining but the production of the product is going up since each factory is producing more product. E.g., automobiles. This is the natural order of things in business.

The “number of refineries” issue is brought up in contexts such as the proposal to turn over old military bases for free to oil companies. Think about that.

4

Not all refineries in the US rely on light, sweet crude. That is the benchmark for price quotes, but sour crude is used a lot. Sulphur by the train load (not just train cars, whole trains) come out of the Conoco Phillips refinery in Borger, TX. A good many gulf coast refineries have amine units to remove hydrogen sulphide (not sure of the total, but they are there). Sweet crude may be easier to refine, but the good ol’ sour stuff is still being refined.

The same refinery in Borger has gone through a number of expansion projects in the last few years, as have many of the gulf coast refineries. It’s a lot easier to add onto an existing refinery than build a new one from scratch, but expansion projects don’t make more than local headlines.

FWIW, the most recent newly constructed US refinery (Marathon in Garyville, LA) has an amine unit to deal with sour crude.

5

New wells are being drilled, but they are expensive and risky. Around here, southeastern Ohio, it’ll run in the neighborhood of $130,000 to drill a “Clinton” well (meaning it’s a fairly shallow well, tapping into the Clinton formation), plus “fracking,” and permanent equipment.

It takes months to bring a new well online, the entire investment might be worth nothing, and getting service might mean downtimes in the months as well.

Ten-fifteen years ago, give or take, there were times when the pumpers shut down the wells because the oil couldn’t pay for the pumpers’ labor.

6

Moving thread from IMHO to Great Debates.

7

Not sure what the OP means by “No new US wells”; the oilfield service company I work for is certainly working on a number of wellsites in the US as I type this.

As you can see from this page, on average more than 30,000 new oil or gas wells are drilled in US territory every year. Although I don’t have the projections right in front of me, I believe the total will be more than 40,000 for 2006.

Granted, only about 25% of these will be oil wells (the rest are for natural gas) but that is mainly because most of the domestic oil that is economical to recover at current average production costs has been found. Higher prices will likely spur additional drilling of now-marginal prospects, but I seriously doubt we will see anything close to the drilling boom of '78-'81 without a) prices sustained at much higher levels than you see right now b) a consderable amount of rig newbuilding (the onshore and offshore fleets are both at near-maximum utilization) and c) an influx of trained personnel to do the various, highly technical task required in oil and gas prospecting. Speaking as the local hiring agent for my company, I can assure you that finding qualified personnel is extremely difficult for the entire industry.

Even though domestic drilling activity is likely to increase further over the nest few years, most of this will be in natural gas, because the economics and chances of success are better. Even though drilling is ramping up worldwide, my personal estimate is that it would take at least five years to bring about the technical means to drill at a level more than a few percentage points above the activity now.

8

Well that’s good to know. I just seems like we aren’t drilling in places like the gulf, due to environmentat concerns, but now Mexico and IIRC Cuba is getting the oil that we could have, and there is no way they are doing it as cleanly as we can.

9

Actually, drilling in the Gulf of Mexico is very active and has been for many years. The Baker-Hughes rig count shows about 95 rigs drilling in the western Gulf as of last week; as I mentioned previously, this is close to 100% utilization of the rigs available. I’ll grant you that there is a ban on drilling in the Eastern gulf, but that is primarily Florida’s doing.

I likewise have no idea what you mean by “Mexico and Cuba getting oil that we could have”.

10

What is the OP’s point?

Kanicbird, are you implying that the USA do away with environmental regulations so that WE can pollute the earth’s resources instead of someone else?

Are you implying that the US has more than 5% of the world’s oil reserves, so we should just rely on our own oil and not some country like Mexico or Venezuela?

Or are you really just trying to promote the development of ANWR?

Answer us this…Why cant our Republican government just raise the CAFE standards a few miles per gallon, and then we dont even need ANWR?

Our how about we save our oil reserves in ANWR for 50-100 years from now when we will REALLY need them?

What is your point, and what is your solution?

11

I forgot to mention in the above post, the whole “refinery shortage” excuse is total pro-oil talking-point BullShit.

The oil companies are swimming in oil money. They could easily expand existing refinery production if they wanted to. Sure they need to add some environmental controls, but I think they can afford it. The EPA is not stopping construction of refining capacity.

After posting a record profit of $58 Billion in one quarter last year, and giving the retiring CEO a $400 Miiliion bonus, I think ExxonMobil can afford to spend a few hundred million on environmental controls and permitting. The fact is, a tight oil supply makes them lots of $$$$.

BTW- Exxon still hasn’t paid out the $5 or $10 Billion they owe to the people of Alaska for the Exxon Valdez spill.

12

Soylent Gene this was ment to be a IMHO thread and it where I put it, I will not take responsibility for** Czarcasm**'s decision to move it to GD’s.

Exactly the opposite, The US has some of the strictest environmental regulations, and is most able to deal with environmental disasters. So if you are going to be doing something that could lead to pollution it would be far better, pollution wise, to do it here in the US where we can regulate it and clean it up then another country with lacking environmental technologies and regulations.

Or in other words, refine the oil in Cuba and we will release x pollutants, do it in the US and we will release 1/2x, thinking environmentally, where would you like to refined?

I do question it, but more like I don’t want us from blocking ourselves from getting international oil, while Mexico, Cuba suck it up and cause a great deal more polution in the process that we ever would.

I am for the development of ANWR, but since we own the land, it’s not as critical of international sources.

If we leave anwr alone there is no enviromental impact, if we leave gulf oil alone and mexico gets it it will be worse then we get it.

I would wag primarally due to kickbacks and donations to their campains by various people invested in low MPG cars, to try to help domestic auto makers who’s SUV sales have kept them afloat, the technological chalenge of producing cars that actually are save, and meet the higher mpg requirements.

How about we tap them and keep them as standby for a extra SPR?

**

Point = US can use oil cleaner then anyone else in the world
Solution = Lets not hinder the US development of international oil sources, actually lets encourage it.

13

Where, exactly, is this occurring? AFAIK, the territorial waters/mineral rights in the Gulf are pretty much set. Cuba and Mexico are not drilling in any location that the US prevents US companies from drilling and I don’t see Mexico or Cuba allowing US firms to drill in their waters (unless Mexico has started bringing in private capital to compete with Pemex in development, but I’m not aware that they have).

14

I’m sorry. This makes no sense.

You are hypothesizing that some shadowy group is bribing Congress to keep CAFE standards more restrictive so that they can support the sale of more fuel efficient cars in order to help the manufacturers who are making the most money off inefficient SUVs.

Your statement contradicts itself unless you have some wheels-within-wheels conspiracy theory that you have failed to articulate. (And if you do have a convoluted conspiracy theory, you had better have actual evidence rather than simply throwing it out in an attempt to derail criticims of your odd claims in this thread.)

15

I had to read it twice too.

does seem to be consistent, pointing to influence by people invested in cars that don’t meet CAFE standards, and would have difficulty producing cars that are “safe” (I assume?) and meet CAFE if they were really forced too.

The only problem here is that mileage doesn’t really have that much to do with safety except in a oneupmanship game (which is also a less-than-zero sum game since SUV’s have the rollover and stopping distance problem,) unless of course “save” was a typo for something else, in which case I’ve got nothing.

16

To continue the fight…

In MY 1992, the 2- and 4-wheel drive fleet distinction was eliminated, and fleets were required to meet a standard of 20.2 mpg. The standard progressively increased until 1996, when the Appropriations prohibition froze the requirement at 20.7 mpg. The freeze was lifted by Congress on December 18, 2001. On March 31, 2003, NHTSA issued new light truck standards, setting a standard of 21.0 mpg for MY 2005, 21.6 mpg for MY 2006, and 22.2 mpg for MY 2007.

And…

Thereafter, in MY 1990, the passenger car standard was amended to 27.5 mpg, which it has remained at this level.

So it looks like a long time went during the '90s where CAFE standards weren’t touched. Wasn’t that a Democrat led government for most of that time? Then in the early '00’s up through last year, CAFE standards have been raised, at least for trucks, which everyone knows are sucking the gas faster than anything else on the road.

My point? There has been plenty of time to raise the standards, but no administration, either Rep or Dems has really seen fit to do so until recently. At least according to NHTSA. Lets make sure to lay the blame where it belongs.

17

Of course, this is an extremely relevant datum, as these are the same people who are so insistent on drilling the ANWR :dubious:

18

What’s your point? CAFE standards havent been touched for years until recently. This is a big turd sandwhich and everyone gets to take a bite, not just the current administration. We as a nation have done diddly and squat to avoid the current situation we are in with high gas prices. To blame one political party or the other is pointless.

19

Well only if you consider lobbying groups ‘shadowy’. I was saying, or trying to, that these ‘shadowy’ lobbiest groups are ‘lobbying’ to keep the CAFE standards LOW, less restrictive, not high more restrictive.

Yes of corse is was, also the former pres didn’t even have a energy policy for the US IIRC. I misunderstood when I was asked:

I assumed I was asked about the current republicans in governement so I didn’t mention democrats, I didn’t realize the question was about our goverment in general which is a republic.

20

This is incorrect. Refineries are highly complicated and can not be thrown together overnight. Whether in the United States there is good capacity or not, I do not know, but you are being fantastic in your thinking to say any refinery can be ‘easily’ expanded.

It is expensive and time consuming project that can take years to come on line.

Sorry America has put itself in this spot for whatever reasons, but pretending infrastructure is easy is not going to have you solve the problem.