The BP Thunder Horse platform, about 150 miles southeast of New Orleans. (Brett Coomer/Houston Chronicle/Rapport Press/NEWSCOM)
Four offshore-drilling myths
By Eoin O'Carroll | 08.14.08
“A lie can travel halfway around the world,” goes an old saying, “while the truth is still putting on its shoes.”
This maxim is particularly true for hot-button political topics, and there is no hotter button right now than the debate over whether Congress should lift the 27-year-old ban on offshore drilling. I’ve read a lot of news reports and editorials about this issue, and I’ve seen a lot of misinformation – some of it implicit, but a lot of it outright falsehood, too. I hope this post will help clear the air a bit.
Myth #1: We know how much oil there is. Opponents of offshore drilling frequently cite a report by the Department of Energy saying that, according to the Interior Department’s Minerals Management Service, there are “only” about 18 billion barrels of technically recoverable oil in the currently off-limits Pacific, Atlantic, and eastern Gulf regions. (This is different from the recent US Geological Survey report that estimated that there are 90 billion barrels in the Arctic Circle.) Extracting that oil from those regions, the report says, “would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.” As a Tuesday editorial in the Washington Post points out, the MMS arrived at those estimates using seismic equipment that is now outdated:
In the case of the Atlantic Ocean, the data were collected before Congress imposed a moratorium on offshore drilling in 1981. In 1987, the MMS estimated that there were 9 billion barrels of oil in the Gulf of Mexico. By 2006, after major advances in seismic technology and deepwater drilling techniques, the MMS resource estimate for that area had ballooned to 45 billion barrels. In short, there could be much more oil under the sea than previously known.
Myth #2: It would be “our” oil. “The American people deserve more access to American oil,” said Rep. Mike Pence (R) of Indiana on the House floor recently. That may be true, but any oil drilled off America’s shores won’t automatically be American oil. It will belong to ExxonMobil. Or Shell. Or BP. Or another multinational company that will be just as free to sell the stuff to China or India as they are to sell it to Americans. Unless we decide to nationalize our oil companies – a notion that, while not opposed by a majority of Americans, has almost no support among our political class – the oil won’t belong to us.
Myth #3: Drilling offshore in the heavily regulated US would prevent more environmentally destructive drilling elsewhere. Conservative columnist Charles Krauthammer put forth this argument a couple weeks back in an op-ed for the Washington Post, in which he criticized House Speaker Nancy Pelosi’s environmentally motiviated opposition to offshore drilling.
Does Pelosi imagine that with so much of America declared off-limits, the planet is less injured as drilling shifts to Kazakhstan and Venezuela and Equatorial Guinea? That Russia will be more environmentally scrupulous than we in drilling in its Arctic?
The net environmental effect of Pelosi’s no-drilling willfulness is negative. Outsourcing U.S. oil production does nothing to lessen worldwide environmental despoliation. It simply exports it to more corrupt, less efficient, more unstable parts of the world — thereby increasing net planetary damage. [Italics in original.]
Does Mr. Krauthammer really believe that, with oil trading at over $100 per barrel, an increase in US production would prompt drillers in Kazakhstan to ease off? The only way that we would really get any significant amount of production to shift from the developing world to the United States would be if it were cheaper to drill here. And that’s not going to happen, partly because of the very environmental regulations that Krauthammer touts, but mostly because the stuff is way down there at the bottom of the ocean.
Myth #4: China is currently drilling off the coast of Florida. “[O]il is being drilled right now 60 miles off the coast of Florida,” said Vice President Dick Cheney in a speech to the US Chamber of Commerce in June. “But we’re not doing it, the Chinese are, in cooperation with the Cuban government. Even the communists have figured out that a good answer to high prices is more supply.”
“Right at this moment, some 60 miles or less off the coast of Key West, Florida, China has the green light to drill for oil in order to lower energy costs in that country,” said House Republican leader John Boehner on his website.
“China, thanks to a lease issued by Cuba, is drilling for oil just 50 miles off Florida’s coast,” wrote California Rep. George Radanovich in an op-ed for the Modesto (Calif.) Bee.
“Even China recognizes that oil and natural gas is readily available off our shores; thanks to Fidel Castro, they’ve been given a permit to drill for oil 45 miles from the Florida Keys,” wrote House Whip Congressman Roy Blunt (R-Mo.) in another op-ed.
Setting aside the notion that major political figures are holding up the Chinese government as worth emulating, the idea that China is drilling off the coast of Florida is simply not true. As the McClatchy news service reported, China has an agreement with the Cuban government, but only to develop onshore resources. The Chinese have not yet drilled anywhere in Cuba nor off its shores.
The myth seems to have originate in a piece by conservative columnist George F. Will, who has since run a correction. Mr. Cheney’s office also issued a retraction. But this hasn’t stopped people from still circulating this rumor. The site Talking Points Memo has compiled a list of over a dozen current and former Republican members of Congress who have pushed this falsehood.
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2. Andrei | 08.14.08
#5 is where it will be available for us in “a couple of months”
#6 is where it will reduce the prices at the pump by any noticeable amount
3. Danny | 08.15.08
Refeshing post, thanks for being informative and not biased. It’s hard to find information without agenda these days.
4. Mark Allen | 08.15.08
#7 We can go on without the drilling and everything will work out. (Answer: Drill here. Drill Now. Pay less.)
#8 The Democrats care about ending the energy crisis and will work in a non-partisan fashion to do so.
5. Geophys55 | 08.15.08
You have repeated two myths yourself. They involve:
Misconception #0. Offshore drilling will bring us no benefit
The oil off our shore is OURS - we OWN it. The oil companies will get their share (a big share) for their multibillion dollar investment to get it out of the Earth. We get like 40% (taxes, lease fees and royalties) just for being the owners - no investment required! Not including jobs!
When we import oil we get none of that. Hugo Chavez and Ahmadinejad get that and more!
Yes, it goes to the federal government but it represents taxes you won’t pay in the future. It represents social security that might still be there when you need it. It represents a strong dollar and therefore lower oil prices. If you allow drilling in state waters (as we do) the money goes straight to the state (hence our surplus).
AND:
Misconception #16. Cuba is not really preparing to drill off Florida.
Cuba has an “Exclusive Economic Zone” in the Gulf Just South of Florida. They have sold leases to many interests. There is an article in Cuba’s official website that says “CNOOC to participate in Cuban Resource Exploitation - CNOOC is Chinese National Offshore Oil Corporation. It’s a dead link now - they probably pulled it when the story hit the US press, so it could be easily denied by anti-independence advocates. I suspect they have pulled the link by now, too.
Besides China - Repsol YPF (Spain-Argentina), Norsk Hydro (Norway), India Oil and Natrual Gas. Corp., Petronas (Malaysia), PDVSA (Venezuela), and PetroVietnam have leases and PetroBras (Brazil) is considering the possibility..
So, China, Schmina – Cuba is going to drill like crazy with the help of some capitalists who actually have money to do so. So expect the rigs off Florida soon.
Cuba will also attempt to nationalize once production is running, but this list of companies are not so easily fooled - with the possible exception of PDVSA.
6. Geophys55 | 08.15.08
While I’m at it, you show signs of:
Misconception #9. Offshore drilling kills marine life.
Oil platforms have been proven to increase both the numbers and diversity of marine life by acting as artificial reefs. Fishermen actually seek out the rigs for that reason.
What does kill marine life is farm-country fertilizer run off that spills out into the Gulf of Mexico and has created a “Dead Zone” the size of the State of New Jersey. With more crops planted for the “green fuel” ethanol, the Zone is expanding. Attempting to replace all the oil in our economy with biofuels will accelerate this process enormously.
There is no energy source that has zero impact on the environment. Telling me biofuels are better is nonsense while farm run off is having such a devastating effect on my local environment.
AND:
Misconception #4. There is ‘not that much oil’ offshore
Tell it to the Brazilians. They have recently discovered two “Saudi” sized oilfields off their shores. Brazil has gone from importing almost all their fuel to energy independence by a combination of both ethanol and oil exploration in a few decades. They now become energy exporters and will be rich beyond their dreams. There is every reason to suspect that the same sort of resources exist off our own shores, but we are not going to find out if we don’t look.
People who have not been paying attention will tell you that it was Ethanol alone. The overall road transport sector (Including trucks and busses) in Brazil uses only 20% Ethanol (2006 figures - Wikipedia). Before you say that it is more environmentally safe, ask yourself how much Amazon rainforest was burned to make room for all that sugarcane.
8. Geophys55 | 08.15.08
That you have misconceptions about the oil business. You have repeated two falsehoods as if they were fact. I got my information right off the internet and by reading industry publications. I think you should do the same if you are going to publish your views!
9. Geophys55 | 08.15.08
Let me just throw an passage from what I just wrote to the Wisconsin Secretary of State:
“Your coasts are already at risk. Foreign oil does not appear out of the air. It comes in tankers which, I am sorry to tell you, are much more likely to spill on your pretty beaches than production platforms or their pipelines.
New Jersey alone imports about 220 million barrels a year. California gets 60% of refinery feedstock in tankers, 20 from Alaska and 40 foreign. I see that you and your constituents in Wisconsin have a refinery of 33,000 barrels a day capacity. Many of your neighboring states, likewise. I have not found figures for how much comes from tankers, but I see many references to oil tankers in the Great Lakes. I have only to remember the Edmund Fitzgerald to know that a tanker could be split open and sink rapidly when the gales of November come early.”
10. Jim | 08.15.08
Regarding myth 2, please check your facts. Oil produced from the Outer Continental Shelf of the United States cannot be exported except under very narrow conditions specified by law. This is an oft repeated claim made by the opponents of offshore drilling.
11. Jim | 08.15.08
Regarding my last comment. If you need an independent source, Contact Professor Henry Lee at the Kennedy School at Havard. He made a similar statement on All Things Considered on National Public Radio a few weeks age. After a listener wrote in with the “no export” facts, he did issue a clarification.
12. Geophys55 | 08.15.08
Relatively small amounts - never more than 7% - of Alaskan crude have been sold to Korea, Japan and China. Korea imports about half of this oil. (ncseonline.org). That was allowed because there was more crude available on the West Coast than could be handled by refineries there. For a while oil was sent through the Panama Canal to Gulf Coast refineries and the US Virgin Islands. It proved to be more economically sensible to export to Pacific markets to avoid the canal trip which prohibits large ships.
http://www.ncseonline.org/nle/crsreports/natural/nrgen-25.cfm
California and Gulf Coast platforms are connected to refineries by pipelines. As far as I know there is no tanker offloading in California or on the US side of the Gulf. From Mexican waters, yes.
13. Geophys55 | 08.15.08
P.S., obviously California is no longer overloaded with domestic oil, importing 40%.
14. BAC | 08.15.08
When cable news reports the results of polls showing most Americans now support drilling off the OCS, they also fail to report what 3 big oil CEO’s said in a congressional hearing in June. The reason they aren’t producing more domestically on current leases is due to a lack of petroleum engineers, equipment and manpower. Yeah…giving them more leases in the OCS will solve that problem. LOL
15. Peter Black | 08.15.08
I think we should allow exploration in the moratorium areas. If we happen to find a field the size of Tupi (the often cited Brazillian offshore field) then it may make sense to drill. However, I should also point out that if the US enters a cap and trade program in the upcoming years, there will be a price on emitting carbon dioxide. Of course we all know that oil is a fossil fuel so that it may not be cost effective to drill and burn by the time 2020 rolls around. It is hard to predict the future, but the carbon market is likely to spur innovation in the renewables realm.
But the bottom line is that we need to reduce our GHG footprint NOW. Offshore drilling does nothing but worsen our dependence upon oil, foreign or domestic, making it a regressive policy measure, not a progressive one.
16. Mike Higgins | 08.15.08
MYTH #1: We NEED TO KNOW how much oil is there before we allow drilling.
This is one of the biggest myths. Oil companies are the ones who decide whether or not to drill based on THEIR assessment of how much oil is there. They take the risk. We (the government or the people) take no risk. We (the government or the people) should not subsidize any efforts to drill. If an oil company is successful, the government “earns” a share of the profits. How much oil is there is a non-issue.
MYTH #2: Addressed by Geophys55 in Comment #6 and Jim in Comments #10 and #11 above.
MYTH #3: Nancy Pelosi’s opposition to offshore drilling is environmentally motivated.
Nancy Pelosi’s opposition to offshore drilling is NOT environmentally motivated, it is politically motivated. Krauthammer’s comments were in response to Pelosi’s comment that her opposition was motivated by “trying to save the world.” Please, Ms. Pelosi, spare us the hyperbole.
MYTH #4: Addressed by Geophys55 in Comment #5.
FACT #1: The U.S. Government spent $16.6 billion on energy subsidies in 2007.
This is twice the level of subsidization of eight years ago. This should not be happening. The institute for Energy Research reports the following breakdown for electricity production:
Solar: $ 24.34 per megawatt
Wind: $ 23.37 per megawatt
Coal: $ 0.44 per megawatt
Natural Gas: $ 0.25 per megawatt
Petroleum: $ 0.25 per megawatt
Hydroelectric: $ 0.67 per megawatt
Nuclear: $ 1.59 per megawatt
See http://www.instituteforenergyresearch.org/2008/07/30/energy-subsidies-study/
It is just silly to be subsidizing any form of energy. And the subsidies for wind and solar are unconscionable! No one in their right mind would pay that much of a difference for energy.
17. Peter Black | 08.15.08
Mike Higgins Wrote: “MYTH #1: We NEED TO KNOW how much oil is there before we allow drilling.
This is one of the biggest myths. Oil companies are the ones who decide whether or not to drill based on THEIR assessment of how much oil is there. They take the risk. We (the government or the people) take no risk. We (the government or the people) should not subsidize any efforts to drill. If an oil company is successful, the government “earns” a share of the profits. How much oil is there is a non-issue.”
I suppose that the lack of drilling in the central gulf and western gulf is telling: there must not be oil there if companies aren’t drilling in non moratorium areas.
18. Geophys55 | 08.15.08
Peter Black,
Lack of Drilling?
There are mamouth amounts of permitting, seismic exploration, pipelines being built, drill rigs moved in, wells being spudded, demarcation well drilled, production platforms placed. The leases are called “idle”, however, until production starts. There are some big production platforms now comming on line after 5+ years of “idle” activities. Read Offshore Magazine for details.
19. nancy soule | 08.15.08
Excellent article and especially the responses. Keep up the good work all.
20. Peter Black | 08.15.08
Geophys55: According to the MMS , there are about 33 Billion barrels of oil that are ‘undiscovered’ in the central gulf planning region. And of course as you state that’s where the focus of our offshore infrastructure is. Why? Because there’s oil there. I was being sarcastic in reference to Mike Higgins’ logic (or lack thereof).
See my mapping blog for more: http://environmentaldefenseblogs.org/climateatlas/
21. Geophys55 | 08.15.08
Peter,
Fair enough - let me explain. The oilfields in the central Gulf are in thousands of feet of water. The deepest (that I’ve heard of) a well has been drilled in is about 7000 feet of water. A lot of this oil is also in sub-salt structures that are devilishly difficult to image with seismic. We have new methods that work well but, as you might imagine it requires great effort and corresponding expense.
The sub-salt aspect means they are also very deeply buried. The deepest well I have heard of (and companies keep secrets about these kind of things) was drilled to about 30,000 feet below the seafloor. Those roughnecks live on multibillion dollar floating platforms, hundreds of miles from shore, drilling scores of wells from one platform. The completions (like connecting up the wells with pipelines and so forth) are done by underwater robots of the highest level of technology. Only the biggest fields are worth developing this way and only when several fields can be connected together in a pipeline network. You’d go broke trying to tanker this stuff in.
I told you that so I could tell you this: The oil off California is typically shallow, in shallow water and close to shore. Oil is so abundant there that it oozes up through the seafloor and land (Heard of the LaBrea Tar Pits?). This happens in the Gulf, too. (Remind me to tell you about a fisherman named Rudesindo Cantarell).
Yes, there’s a lot of oil in the central Gulf, but it is dammned hard work to get it. Yes, there is undiscovered “easy” oil in the Gulf but it’s over by Florida, where you can’t drill. If you can’t drill no fool is going to pay for that expensive seismic exploration I mentioned.
If you have any other questions, I’ll do my best to answer.
22. Geophys55 | 08.15.08
P.S. Peter, I was explaining more to “Them” than you. Thanks for the set-up!
23. Ken | 08.15.08
@Mike Higgins. If you cite a source, please try to determine its independence.
http://www.exxonsecrets.org/html/orgfactsheet.php?id=115
I don’t think I need to say where this source is coming from. But I am 100% sure they don’t have access to the amount of money the oil companies do.
Ken
24. Geophys55 | 08.15.08
Peter Black,
Having perused you site a bit I will add a few comments.
The search for oil is a bit like the search for your car keys in a parking lot (stay with me!). You know you dropped them somewhere in the almost completely pitch-black place. You are drawn, however, to the one streetlight in the lot where you can actually see. (And no- you don’t have a flashlight)
There is “all the oil in the Gulf” because there is “all the seismic” in the Gulf. People explore where they can drill - NOT where they think the most oil is!
Nobody thought there was oil in the North Sea. Norwegians are rich beyond dreams because there is. Nobody thought there was oil off Brazil. Brazilians will now become the Saudis of South America, eclipsing even Venezuela, because there is so very much. And I can tell you with absolute confidence that they are spending many, many millions to look for more.
There are more things beneath the sea, Horatio, than are dreamt of in your philosophy*. This story is far from over.
*Apologies to the Bard
25. Geophys55 | 08.15.08
BAC,
Yes, there are not enough Geophysicists, Geologists and Engineers. But I can get you some in four years or less! Besides, the brilliant lights of the oil industry born in ‘55 (or thereabout) suddenly feel like things are getting interesting again. I can’t speak for others, but you will have to get three or four goons behind you before you can convince me to retire.
Geophys55
26. Geophys55 | 08.15.08
Okay, after this, I’m through for the evening!
Hey,
That reminds me My degree had to do with Physics but not the Geo kind. I got into the business because they gave me a job. Since then I have done things that would make me a PHD in Geophysics, mant times over, if I cared to be.
And, I want to tell you young **** who want a job, check out offshore drilling. You’ll be gone for a week or two (maybe longer out in the central Gulf). Back in the Stone Age we didn’t even have televisioon (except when the weather was perfect and we could suck in channel 2 in Houston) not even a video player (I said it was Stone Age). But you guys will have satellite TV and internet and every movie ever made.
We didn’t have girls back then. I understand they are out there now. Be polite!
BS aside, this is the experience of a lifetime! I wouldn’t trade where I’ve been with the Pope.
27. Geophys55 | 08.15.08
Okay, just one more, please…
The food is superb on offshore rigs (thats because there ain’t no beer, which I forgot to mention). The first thing I did on an offshore rig was go to lunch. The Chef asked: “How do you want your steak”. I said “medium”, then he asked, “How many?”
28. Dinsule | 08.16.08
Many are quick to forget something rather important: no matter how long these resources last, no matter how conscientiously we extract them, not matter how copious the reserves are … they are finite. We will, be it in three or ten or twenty years, be back here again wondering what the **** to do now, blaming each other’s political parties for not having done something about it before, and gernerally doing very little to correct the two large problems: our dependence on FINITE resources (foreign resources are not our worst enemy; that xenophobic lie needs to be abolished … we are dependant on foreign countries in much more intricate and frightening ways then through oil … when NASDAQ drops, so does Paris; when our housing plumets, companies run dry half a world away), and the depreciation of our planet. We are destroying this delicate ecsystem, and while it is not all balmy and melting from here on out, there will be plenty of melting in the poles and greenland. We need to live in close concert with our planet regardless of what langauge our energy provider was established in and regardless of how much oil we have.
There are new solar energy processes that can legitimately power our cities day and night through a synthetic photosynthesis that builds a reserve of hydrogen and electric energy alongside its direct photoelectric generation. Even old solar and wind methods could easily, and at a cost of less than a month’s worth of our wars in Iraq and Afghanistan, power a quarter of our nation for years to come. We have options far superior to increased drilling. We have been frightened into thinking that foreign oil is evil, even as we ignore the crooked policy and pricing of oil by our own companies at home and abroad. We have been taught to fear what it is conveinent for us to fear, not what we ought to. I for one am afraid of any oil dependancy. I for one will not stand for postponing valid solutions to our real problem, that of pathetic integration into this fragile planet. We must, as all species must, integrate and adapt or die. We can tweak and twist to a point, but when our livlihood depends on fighting an entire planet at a social and monetary cost far greater and far more permenant that intergrated living … we have a problem. Ready you derrigs if you will, and when the oil dries up, possibly within my lifetime … what then?
29. Dinsule | 08.16.08
I would like to apologize for my numerous errors; I am using a foreign keyboard and am not quite skilled enough in its slight variations from my usual one. I also feel rather silly for not having realized that this news paper’s site would object to the word he’ll, less apostrophe. I must confess that while I greatly appreciate this newspaper in comparison to many others, I am growing rather tired of censorship in this sense … I suppose I should attempt greater linguistic agility and elegance, yet I doubt there are many Americans, impresionable children or no, who do not understand what four letters are represented by “the hot place” or some euphemism. It seems rather unjust, as well, given that Inferno, Purgatory, Paradise and Heaven are never censored … to censor the semantics of a word yet not its pragmatic, it’s meaning, its crux … seems both futile and backward. Often, the way in which we censor our children and our adults lends more easily to evasion and subversion than to actual cessation; that is to say, we encourage euphemism and substitution but do not change the level of vulgarity and ineptitude in our conversation.
30. Eoin | 08.16.08
Dinsule, your point is well taken. Our curse-word filter leaves something to be desired. I wouldn’t call it censorship, however, because the site isn’t owned by you. Bowdlerism might be a better word for it.
31. whitt | 08.18.08
@Eoin
Your comment was insidious and unbecoming of a journalist.
Altering the public expression of another based on the opinion that the expression may be considered objectionable, harmful or sensitive, and therefore inappropriate, is censorship. The fact of censorship is in no way altered by ownership of the medium of expression. A given privately owned medium may censor their content on their own terms, but it is still censorship.
32. Peter Black | 08.18.08
Geophys,
Nigeria found a bunch of oil and it hasn’t made their people rich or happy. Brazil has a nationalized oil industry which may help the country finally pull out of poverty, but time will tell on that one. We have a system of taxes and royalties so that the federal and state governments can cull some of the resource riches, but by and large the people of this country won’t get rich off any found offshore oil deposits, no matter how large.
I wish I could have more faith in the riches of offshore oil deposits in remote parts of the OCS, but it seems to me that nobody knows what, if anything, is there. The reasonable argument is that we should do extensive and complete exploration prior to allowing any drilling in moratorium areas. The public should know what is down there prior to the government greenlighting drilling prospects. Make sense?
In the meantime, we know for certain how much renewable energy resources we have, and what kind of investment in our infrastructure it will take to get them developed. To me, this makes the most sense since we could truly become energy independent as a nation. It will not happen overnight, and we may end up paying $10 a gallon for gas for a time. But the time is incredibly ripe to transition our economy over towards renewables.
33. D Reyn | 08.19.08
It is interesting to read Geophys55’s and others comments - many are excellent, but I feel they are getting too small an audience here, alas.
My similar experience (as a “geophy54″) has been that the oil companies are taking all the risk and the countries where they are interested in drilling can either _encourage_ or _discourage_ their efforts.
There are many technical concepts about where to look for oil – source rock, reservoir, trap and seal, thermal/burial history, etc. This amounts to a petroleum “presence” risk, but there has always been another risk – one that is “governmental.” The most obvious case of nationalization is only one facet - changing tax standards are another factor. When you are trying to find and develop something that can easily take 10 years from “exploration concept” to production, you have a sensitivity to the stability of the part of the world you are working in. I am thinking about the companies that went to the Caspian sea to develop their resources by bringing in technology and investment. Trains cannot export the volumes they have found off Azerbaijan (although they did for a time through Georgia, I believe). Pipelines have always been vulnerable to insurgent attacks – see the history of Columbia and their huge oil resources. Still companies are weighing and taking these risks.
In weighing the technical aspects of where to look for oil, there are particularly favorable areas. Not everywhere has the same prospectivity. We are basing our search on exploration concepts that have been proven and are currently working, but that doesn’t mean we know how all petroleum discoveries “work.” The North Sea of Norway is a good example, and there continue to be new “concepts” tested every year.
When selecting a “technically favorable” area, the other factor is governmental. When a community wants a company to open a plant in their city, they often give tax breaks to influence their decision to come there. This is exactly what governments are doing around the world. The tax incentives are part of the equation of deciding where to drill. How stable will this be? How much return on the investment? These are the same questions for all businesses. The biggest difference for the public’s eye is the amount of money that is involved. For a small cookware company a city may give $100,000 tax break, but their revenues (and associated local spending) will far exceed this tax break. For a major oil company, their tax breaks look unfair and excessive. The involved money spent to explore and develop the petroleum must be also considered, as a ratio. I suspect the ratios are not too different.
In closing, I would suggest that there be more consulting of a forum of geoscientists about the prospects for benefitting the nation if we use government means to “encourage” petroleum investigation in particular areas. Some may be more prospective than others and not all offshore areas need to be opened at once. I bet the companies that drilled off the east coast US in the Baltimore Canyon area are not as keen to try drilling into that area as areas that have known petroleum such as offshore California.
(Sorry for not following the “myths” and “facts” format.)
34. Charles | 08.19.08
Saying that that some oil from ANWR or offshore may be exported or it wont lower gas prices is a very stupid reason for not drilling there! Take an class in economics. If we export a million barrels from ANWR and import a million barrels from somewhere else, it costs us nothing. If we import a million barrels and export none it costs us 140 million dollars! Research and development of alternative energy sources is great and we should do that, but as long as we are useing more oil than we are producing we need to drill as much as possible. If we end up with more oil than we need we can sell it to China to pay for all our imported lead painted toys!
Democrats say drilling would not help because we wont get the oil for 10 years, a great argument they have been making for a decade - jay Leno
35. Bob Krohn | 08.19.08
From 10. Jim | 08.15.08
“Regarding myth 2, please check your facts. Oil produced from the Outer Continental Shelf of the United States cannot be exported except under very narrow conditions specified by law. This is an oft repeated claim made by the opponents of offshore drilling.”
I am ignorant on this aspect. Help me. Is there or isn’t there any rules regarding the sale of domestically produced oil to other countries?
I happen to think that there should be. We are paying at the low end of the gasoline price spectrum. A chart I saw recently in the LA Times showed that even in (energy independant) Brazil the price of a gallon of gas was like $6.
So, question is: What laws, if any, are there to keep domestically produced oil domestic. Will they lower the price for us?
PS I heard a quote that it costs the Saudis $2/barrel to produce oil. Is tha true and how much does it actually cost to produce (to storage tank) a barrel of oil in various US locations?
Thanks is advance
36. Bob Krohn | 08.19.08
PPS
I noticed another phenomenon during the recent peak in oil prices that is worth noting. Especially when people say drilling offshore won’t reduce oil prices.
Lesson #1. We don’t even have to actually drill offshore to lower prices. Just the THREAT that we will is just as good. President Bush made this threat when he recently revoked Executive Orders prohibiting such drilling. Even though this action would not have allowed any immediate drilling, the price of oil immediately dropped precipitously. He has naturally not received any credit for this in mainstream press.
37. J. Rick | 08.19.08
What a terrific “conversation”- and for the most part polite.
I have to go with Dinsules pleads for looking at this through a long term lense of how large a an impact whichever energy source “we” develop/use has on the environment- mostly in terms of our carbon output. I just cant see perpetuating the use of fuels that spew polluntants into the air.
Can someone explain the figures from Mike Higgins?:
The institute for Energy Research reports the following breakdown for electricity production:
Solar: $ 24.34 per megawatt
Wind: $ 23.37 per megawatt
Coal: $ 0.44 per megawatt
Natural Gas: $ 0.25 per megawatt
Petroleum: $ 0.25 per megawatt
Hydroelectric: $ 0.67 per megawatt
Nuclear: $ 1.59 per megawatt
Is this saying that it costs $24.34 to produce a megawatt of solar electric?
Jill
38. bmack | 08.21.08
Let’s just resolve this. Oil and Coal are poisoning this. There is no reason to keep subsidizing them at the current levels (The oil companies call them “Tax Breaks”).
Make an investment in alternative energy similar to what we invested in the war in Iraq. That will resolve problems of cost rather quickly.
Refute the cornucopia of lies and deceptions (some in comments above) with science & facts. Remember right-wingers, as much as you want black to be white, up to be down, right to be wrong, we aren’t all buying it.
It’s an issue of National Security to get off oil & coal. Just do it!
39. bmack | 08.21.08
“The institute for Energy Research”: To understand their figures, it’s best to understand that they are just another corporate PR facade. They receive their funding from the likes of Exxon.
Solar, wind. They are here now. They will not ever “Run Out”. And unlike gas and coal, they will get cheaper with widespread use, not more expensive!
My gosh, how in the world can people be so married to fossil fuels? There can be only one explanation - they believe the deceptions, or they are making money from it.
41. Ross | 09.21.08
Myth #2.5
Multinational oil companies will be able to sell the oil on the world market and therefore drilling off our coasts will not benefit the U.S.
It actually WILL be our oil. Although the oil will be extracted by multinational companies, many of those companies base their business out of the U.S. That means REAL income directly coming back into the U.S. That means REAL taxes coming back to the U.S. government. And best of all, because it is off our shores, it means REAL American high paying jobs.
@ Mike Higgens. Great info. I have been looking for similar data on cost of production. The figures you cite are subsidies per MW. Actually I am all for subsidizing Solar, Nuclear and Wind. These subsidies should be phased out as these industries hit “running speed”. It is important that we develop every resource we have to achieve energy independence.
As we phase in renewables, we can phase out coal fired power and instead gassify or develop coal-to-liquids technology. Also as cited in the Pickens Plan we can convert/divert natural gas (CNG) to cars. Personally, I would to prefer the older coal plants out.
Unfortunately in Washington, our leadership lacks. Noone has the courage to announce the “moonshot”. We should be doing everything in our power to the business environment favorable to renewables, including dropping their tax rate for new facilities. I have no doubt with the right goal setting we could produce 60% or more of our electricity off of non fossil sources. Double Nuclear power generation from 20% to 40%, 20% from wind generation (see DOE report), and call it 5-10% from solar.
Improvements in electric cars will bring about reduced oil usage, improvements in fuel economy, and conversions to CNG or fuel from coal will make up the balance. If we push far enough to be energy exporters, we can see a new era in American prosperity. Republicans would like to make this into a National Security issue, and for this I am disappointed. It is an ECONOMIC, PROSPERITY, SECURITY, INDEPENDENCE, AND PATRIOTIC issue. Drill Here Drill now, but take steps for the future.
42. Ross | 09.21.08
One more comment:
10 years to get the first drop… hogwash. More like 10 years to produce millions of barrels. Read below about the North Sea. Keep in mind this was 30 years ago and the technology has improved dramatically.
Indeed, as exploration and investment moved further north, it became clear that there was oil to be found in great quantities. However, it was not until 1975 that a small entrepreneurial American company, Hamilton Brothers working in the Argyle field, brought the first British oil ashore, to followed very soon after by BP in the massive Forties field.
Discoveries of oil grew in number as more companies, British, European and American, took out leases on sectors of the North Sea. By the mid-1980s there were over one hundred installations. Through extraordinary technological innovation and human effort – and sacrifice – millions of barrels were being produced every day. An oil and gas bonanza had occurred.
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1. Robert Lewis | 08.14.08
Nancy Pelosi: Questions about her property in DC and Joseph E. Seagrams Company
Paul and Nancy Pelosi bought two properties from the Joseph E. Seagram liquor company in 1999 (Contributor 1998)
Unit 214 at 3030 K Street is now in Paul Pelosi’s name only
but
Unit 119 that both the Speaker and her husband bought is now owned again by the liquor company and the Joseph E. Seagram liquor company is using the same address of the THE PAUL AND NANCY PELOSI CHARITABLE FOUNDATION and THE PAUL PELOSI FAMILY TRUST
http://www.webofdeception.com