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Oil Exploration

© August 2008 Anthony Lawrence

Somebody please explain this to me? Both McCain and Obama are now saying that we need to open up drilling in areas previously environmentally protected. Obama may be a bit more reluctant, but he still seems to be in favor.

A full page ad in this month's Discover Magazine asks "Is tomorrow's energy right in front of us?". It then goes on to complain that 85% of the resources on the Outer Continental Shelf are off limits, and states that there could be 36 billion barrels of oil sitting there that we could get if we weren't so worried about marine wildlife.

Wow. Thirty six billion barrels. That sure sounds like a lot. But it isn't. From what I can find on the web (and please do correct me if I'm wrong), the United States alone uses over 7 billion barrels a year. Seven billion barrels. So those vast off-shore resources would add about 5 years worth of oil.

Five years worth? If we need an extra five years worth of oil, we're in big, big trouble.

We probably ARE in big trouble, but isn't it far past time to face the music and start serious work to get off oil? I don't think risking more damage to our oceans (we may have done too much already) for a lousy five years of putting off the inevitable makes any sense.

So.. somebody tell me why I'm all wrong?

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-> How will 36 billion barrels of offshore oil help anything?


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Tue Aug 19 14:52:29 2008: 4491   mvgfr

as with most such large issues, it's complex and easily misunderstood - and can cost votes.

my read:

mccain says we must drill, to pacify his rabid base; he has totally sold out whatever ideals he seemed to have, before the bush regime bludgeoned him into submission - very sad.

obama says we should drill, to reach out to those to right of him, in order to gain votes. one hopes he intends to engage in this process in a more considered way the the "neocons".

anyone who attempts to explain why it would be of minimal benefit (and also engenders huge risk), loses votes.

this is NOT to say that voters are stupid. they ARE however, in general, under pressure from all sides (economy, DHS, war...) and thus able to devote little energy to drilling down into the details to sort fact from sound-bite. and so they go with what they've got - sound-bites.

BTW: Matt Deatherage, more astute than I, recently posted something apropos:

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Tue Aug 19 15:00:11 2008: 4492   TonyLawrence

Yes, that Matt Deatherage bit does sum it up.

But if the voters are not stupid, then why not have honest discussions?

I mean "stupid" in its most restricted sense: in a stupor, unthinking. I don't mean that people are incapable of understanding issues; I think (as you imply) that most are simply too stressed and distracted by everything else and prefer not to think.

That's frustrating, because the mess we are in now is pretty damn serious and ignoring it all isn't going to help.

Tue Aug 19 15:44:22 2008: 4493   jtimberman


"The US Department of Energy’s Energy Information Administration (EIA) recently forecast that in the next few years global surplus production capacity will continue to grow to between 3 and 5 million barrels per day by 2010, thereby “substantially thickening the surplus capacity cushion.”

I read "surplus production" as above and beyond the requirement to meet consumer demand. So we've got a surplus already, and continuing to add to that surplus. Why then are prices going up (or staying up)? Futures investors, of course.

Tue Aug 19 17:42:26 2008: 4494   jambarama

The other thing no one talks about is the time it'll take before something like this actually produces usable gasoline. We're talking years. If you need cheap gas tomorrow, consider a life of crime - because anwar/offshore drilling isn't going to provide it. Nor will a gas-free holiday or a record-profit-windfall tax.

Tue Aug 19 20:19:43 2008: 4495   TonyLawrence

If we have a surplus, why do we need those 36 billion barrels?

Thu Aug 21 01:12:01 2008: 4498   Allen

the 7 years you mention would be 7 years of zero imported oil.

imagine that. all that money staying here rather than going to ... "them"

even if it takes years to get that oil into my tank, if we start now, then, years from now, we may only need to import 10% rather than 30%+ of the oil we use. during the years it may take to get that oil into my tank, we will make advances in tech. which, hopefully, would lower our need for imported oil.

look at it from a different POV:

at what point would you think that drilling for that oil is a good idea? if it's a given that it will take years to get it into my car, what point do we have to reach before we say "ok, we see things will get really bad years down the road, so lets start drilling now." ?

imho, drilling is just part of the answer, we should be trying everything: wind, nuke, solar, oil, ethanol, coal, nat gas and whatever else there is to try.

Thu Aug 21 09:07:39 2008: 4499   mvgfr

> the 7 years you mention would be 7 years of zero imported oil

That's extremely oversimplified.

(Also I believe you've mixed up two numbers: FIVE years at seven billion barrels per year - given an estimate of 36B barrels total.)

It presumes we'd get the oil at a rate fast enough to keep up with consumption; all we have now are estimates of a total, not of an extraction rate. And I believe some of it is difficult to extract.

A reader may also presume that "our" oil is "free" - which of course is not the case; whoever drills (and refines, etc) will charge the going rate - and since it's a small % of what's out there, it'd be about the same as if we hadn't taken the substantial environmental risks of drilling there.

BTW: I believe the drilling rights are public, so the oil extracted really should be nearly free, though of course that won't happen. Certainly those who take the risk of drilling should get a profit, however any analysis of petro company profits seems to indicate ridiculously high profits; predatory one might say. Not to mention that the drilling rights certainly should not be practically given away as they have been lately. The system is tilted FAR in favor of the petro companies.

Certainly we should look into it - carefully - however we should go into it with open eyes, understanding that it's bottom-line financial impact on average Americans will be minimal.

Fri Sep 19 14:13:10 2008: 4578   JogartheBarbarian

Predatory profits? I was skeptical about just such a charge a few months ago so I looked it up. In 2007, Exxon made around 10% profit. Coca-Cola made 20%. Let me repeat that: Coke made DOUBLE the profit-rate of Exxon, yet no one is demanding a windfall profits tax against Coke. (I guess all this alleged global warming is making everyone thirsty?) To be completely frank, lawmakers and media pundits which attack large, industrial companies for political gain are attacking the country's infrastructure, and ultimately our standard of living. But as far as offshore drilling goes... every barrel of domestic oil we use (which displaces imports) is one less barrel bought from terrorist-harboring and funding nations, and that's a 100% good idea.

Fri Sep 19 15:03:59 2008: 4580   jtimberman

The beverage Coca-Cola itself is carbonated water and corn syrup, basically. As are most other beverages that Coke produces. They also produce bottled water. These are all *very* inexpensive to produce, so their profit margins are huge. Oil and gas do have lower margins, but the fact that the oil companies are making so much is an indication that something is wrong, don't you think?

Fri Sep 19 15:22:09 2008: 4581   JogartheBarbarian

I'd say no, simply for the reason "big oil" is as big as it is is because there is a *HUGE* market for oil and the infrastructure required to find it, extract it, process it, store it, and deliver it *cheaply* is also huge. We are a fossil-fuel based civilization, and will be until the gradually increasing price of fuels versus the gradually declining price of renewables (or some heretofore unknown power source?) makes the renewables a superior solution (e.g. plug-in hybrids being *electric-only* for the first 40-50 miles of a trip shifts fuel demands from fossils to electricity). At that point we will wean ourselves off of fossil fuels but until that point, I am a realist; if the market wants oil then by golly they're going to get oil, and I don't begrudge the reasonable profits the oil companies make for delivering a vital and desirable product, *especially* if they're using domestic oil. On a side note, I'm very excited about the development of the Chevy Volt and I hope it's a runaway success!


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