"John Galt" <whoisjohngalt@[EMAIL PROTECTED]
> wrote in message
news:AgWRj.123983$Tj3.106837@[EMAIL PROTECTED]
> http://www.realclearpolitics.com/articles/2008/04/start_drilling.html
>
> Article Highlights (well, almost all of it is a "highlight"):
>
> (...) The truth is that we're almost powerless to influence today's
> prices. We are because we didn't take sensible actions 10 or 20 years
ago.
> If we persist, we will be even worse off in a decade or two. The first
> thing to do: Start drilling.
> It may surprise Americans to discover that the United States is the
> third-largest oil producer, behind Saudi Arabia and Russia. We could be
> producing more, but Congress has put large areas of potential supply
> off-limits. These include the Atlantic and Pacific coasts and parts of
> Alaska and the Gulf of Mexico. By government estimates, these areas may
> contain 25-30 billion barrels of oil (against about 30 billion of proven
> U.S. reserves today) and 80 trillion cubic feet or more of natural gas
> (compared with about 200 tcf of proven reserves).
>
> What keeps these areas closed are exaggerated environmental fears,
strong
> prejudice against oil companies, and sheer stupidity. Americans favor
both
> "energy independence" and cheap fuel. They deplore im****ts -- who wants
to
> pay foreigners? -- but oppose more production in the United States. Got
> it? The result is a "no-pain energy agenda that sounds appealing but has
> no basis in reality," writes Robert Bryce in "Gusher of Lies: The
> Dangerous Delusions of 'Energy Independence.'"
>
> Unsurprisingly, all three major presidential candidates tout "energy
> independence." This reflects either ignorance (unlikely) or pandering
> (probable). The United States now im****ts about 60 percent of its oil,
up
> from 42 percent in 1990. We'll im****t lots more for the foreseeable
> future. The world uses 86 million barrels of oil a day, up from 67 mbd
in
> 1990. (...)
>
> The best we can do is to try to influence the global balance of supply
and
> demand. Increase our supply. Restrain our demand. (...)
>
> Increasing production also is im****tant. Output from older fields,
> including Alaska's North Slope, is declining. Although production from
> restricted areas won't make the U.S. self-sufficient, it might stabilize
> output or even reduce im****ts. No one knows exactly what's in these
areas,
> because the exploratory work is old. Estimates indicate that production
> from the Arctic National Wildlife Refuge might equal almost 5 percent of
> present U.S. oil use.
>
> Members of Congress complain loudly about high oil profits ($40.6
billion
> for ExxonMobil last year) but frustrate those companies from using those
> profits to explore and produce in the United States. Getting access to
oil
> elsewhere is increasingly difficult. Governments own three-quarters or
> more of proven reserves. Higher prices perversely discourage other
> countries from approving new projects. Flush with oil revenues,
countries
> have less need to expand production. Undersupply and high prices then
feed
> on each other.
>
> But it's hard for the United States to complain that other countries
limit
> access to their reserves when we're doing the same. If higher U.S.
> production reduced world prices, other countries might expand
production.
> What they couldn't get from prices they'd try to get from greater sales.
>
> On environmental grounds, the alternatives to more drilling are usually
> worse. Subsidies to ethanol made from corn have increased food prices
and
> used scarce water, with few benefits. If oil is im****ted, it's
vulnerable
> to tanker spills. By contrast, local production is probably safer. There
> were 4,000 platforms operating in the Gulf of Mexico when hurricanes
> Katrina and Rita hit. Despite extensive damage, there were no major
> spills, says Robbie Diamond of Securing America's Future Energy, an
> advocacy group.
>
> Perhaps oil prices will drop when some long-delayed projects begin
> production or if demand slackens. But the basic problem will remain.
> Though dependent on foreign oil, we might conceivably curb the power of
> foreign producers. But this is not a task of a month or a year. It is a
> task of decades; new production projects take that long. If we don't
start
> now, our future dependence and its dangers will grow. Count on it.
>
>
This author is being misleading.
First, his claim that, because some exploration of untapped reserves is
old
the estimates may be off is totally bogus. It isn't like an oil field is
like a bathtub capable of filling or emptying. UNless he is claiming that
new technology (forget it) can be used, the estiimates are stable. Check
the
adjustments in reserves at
http://tonto.eia.doe.gov/dnav/pet/pet_crd_pres_dcu_NUS_a.htm
Net changes in total reserves are less than a tenth of a percent.
Note also that, despite the rhetoric, new ex****ation and tapping of new
fields _does_ occur every year, especially in the Gulf.
Despite what this author stated.
And again, despite what this author asserts, proven reserves are not that
great. Despite his assertion that there are untapped reserves equal to
current known reserves, the EIA doesn''t believe that. They put untapped
reserves at about 20% of tapped reserves. Most of that is in producing
fields and will require secondary extraction techniques, is too small to
be
of significant interest (fields in Arizona, Missouri, Nevada, New York,
South Dakota, Tennessee, and Virginia), f ex., or for other reasons
(quality) is not exciting commercial interest.
http://tonto.eia.doe.gov/dnav/pet/pet_crd_pres_dcu_NUS_a.htm
This is a key factor of the author's exaggeration.
Much of what he claims to be "reserves" is tied up in tar sands. But, as
the
Canadians are finding out, extraction is an expensive, energy intensive
process adn the net ouput is small, trading huge amounts of coal for the
low
quality oil. Add the massive investments for minimal profits, even at $120
a
barrel, and it is understandable why the oil companies are silent.
Even at full production of known, untapped fields, the effect on world
markets would be small. The loss in Iraqi production due to the war is
about
the same amount.
And all of this begs the central question of why oil/gas prices are so
high.
Note that world demand, because of the failing US economy, is actually
falling and recently has lead to an easing of crude prices. Yet despite
the
reduction in cost of a barrel of oil gasoline prices continue to set
records.
In truth, factors other than supply and demand are behind the high oil
proces, which is why little can be done in the short term to lower them.
According to economists and the oil ministers of OPEC, for ex, 20% or more
of hte cost of a barrel is because of Bush's weak dollar policy that has
put
the dollar in free fall. With the dollar continuing to set record lows
against foreign currencies oil producers add in a hedge against loss of
wealth as the dollar continues its free fall.
The second biggest factor, accounting for as much as a quarter of teh the
cost of a barrel, is the US financial crisis caused by Bush 's and the
Fed's
economic policies. AS mortgage investments died and investors got hinckey
about investing in complex funds, and as US interest rates plummeted,
money
has flown from stocks to commodities. This explains why the cost continues
to remain high, even increase, while demand falls. Too many dollars
betting
oil and gas will continue to go up in price.
In truth world demand and supply is very similar to waht it was when oil
was
selling for half of what it is today.
Larry
Larry
>
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