...will not lower gas prices.
Because some people apparently need to hear things two or three times before it starts to sink in, the head of the Department of Energy's Energy Information Agency (EIA) today said that offshore drilling would have no effect on gas prices.
However, Guy Caruso, who heads the federal Energy Information Administration, said consumers would see little savings at the pump.
"It would be a relatively small effect, because it would take such a long time to bring those supplies on," Caruso said during a briefing at the Center for Strategic and International Studies on the EIA's new long-term international energy forecast. "It doesn't affect prices that much."
Most energy experts say it would take five to 10 years to find oil in the closed areas and bring the crude to market. Caruso said the additional supplies would amount to only a couple of hundred thousand barrels of oil a day.
"It does take a long time to develop these resources, and therefore the price impact is muted by that," he said.
Which is exactly what the EIA said last year but what proponents of offshore drilling blatantly ignore as they trot out conservative hacks to repeat party talking points as proof of their baseless and faulty dictum.
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22 comments:
Of course there would be no major immediate impact. The significant impact would be made over the next 2 to 10 years, as the increased supply comes online. Considering that no suitable alternative to oil is likely to come along in that period, the new supply will surely be just as necessary down the road as it is today.
There's no sense procrastinating on this any further. Even if it will not entirely relieve our dependence on foreign oil, offshore drilling (combined with exploration of the U.S. and Canadian oil shale and further development of reasonable alternative energy sources) will ultimately relieve a significant amount of the upward pressure on energy prices that is sure to continue so long as the developing world decides to keep on, you know, developing.
So, that said, tell me how a few oil platforms outside the line of human sight (50+ miles) that haven't caused major spills in decades could possibly hurt.
And your links, gootch are....where? What backs up what you're saying? Because I have the DOE saying things like they've said for the last two years running that totally contradict your comment.
So, that said, tell me how a few oil platforms outside the line of human sight (50+ miles) that haven't caused major spills in decades could possibly hurt.
Well I don't know, really, but let's just say we start here and then we can click over to here and then mosey on over to here.
When you visit here, Gootch, you best come prepared.
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I best come prepared? What is this, a dance-off? Get over yourself, pal.
My argument (that increasing the supply of oil will ultimately reduce oil prices) requires no links. It is basic economics. The article you link to only says that starting to drill today would not have a significant immediate impact. That's absolutely correct. All the more reason to start today. If only we'd started 10 years ago!
Perhaps 200,000+ barrels/day doesn't sound like a lot to you, or to the Reuters reporter. But that's about 10% of what major oil producing countries like Brazil, Kuwait and Nigeria produce each day. http://www.infoplease.com/ipa/A0922041.html Sounds like a meaningful amount to me. Add that to the hundreds of thousands of barrels per day that could ultimately be extracted from ANWR, the oil shale, and the oil sands, and pretty soon, you're looking at really big numbers.
As for those accidents you cited, are you aware that of the 3 of cited, none (nor any other offshore platform accident that I'm aware of) hold a candle to the magnitude of the Exxon Valdez spill? http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill A terrible accident, to be sure, but you didn't hear anyone suggesting that we should stop shipping oil overseas as a result. You don't give up a beneficial human activity just because accidents can happen. You just have to work to minimize those risks, that's all.
Common sense says you permit drillers to access the natural resources we need, while regulating them enough to minimize the environmental impact and potential risks. That's what some of us call compromise. I recognize that it may seem like a foreign concept after the last few years, but look into it.
Believe you me, brother, if oil prices keep going higher into 2009, even President Obama will change his tune on this. Here's your chance to get ahead of the curve.
What about the Alaskan Pipeline? Whats up with that waste of time?
Jesus you're a moron, gootch. Not only would it be a waste of time, and a detriment to the environment but it would only lower gas prices to, what, $4.41 a gallon instead of $4.54?
Sign me up, brother!!
Gootch: I didn't realize that when you definitively state that oil platforms "haven't caused major spills in decades," you actually meant to add "the size of the Valdez spill." Excuse me, because then I wouldn't have cited 3 examples.
The Infoplease info that you cite in your comment comes from guess? That's right: the EIA.
The bottom line is that two times in the last two years the Department of Energy has declared that the impact drilling offshore would have on gas prices would "be insignificant." It isn't a reporter's opinion. It is the government's position.
On the other side of the coin we have Gootch, the blog commenter, opining that 200,000 barrels "sounds like a meaningful amount" to him.
Well, jeez, let me try to figure out who I want to go with here.
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Yes yes, 200,000 barrels isn't much. What I smell here though is NIMBY on a global scale -- here America us using an order of magnitude more oil per capita then the rest of the world, and we're telling everyone ELSE "you gotta pump more, you gotta pump more, you gotta pump more."
All the while, Alaska is too precious to drill (nevermind that less then 1% of us will ever visit Anwar), our coasts are too precious to drill, etc.
Look, in 50 years we're all going to have hydrogen cars that are fed by nuclear solar and wind power. The only question is whether the transition will be smooth or calamitous. The way to prevent the latter is to make sure that the supply oil decreases gradually, and that means, for the time being, DRILLING.
If the amount of oil off the eastern seaboard is insignificant, then the drilling operations should be relatively insignificant too, no?
Actually, my position is that we have to invest in alternative sources of fuel and energy, Alesh. The less dependence we have on other countries for anything, including oil, the better.
But the solution is not to drill for miniscule amounts in environmentally sensitive areas. The risk does not outweigh the benefits, as far as I'm concerned.
And BTW, you don't use smaller drills or drill platforms for smaller amounts of oil. The risk is the same or as "significant."
Alesh gets it. (Too bad you gave up the other blog, brother. The state of SoFla blogging is worse off without it.) Barring a major unforseen technological breakthrough, oil will remain the major source of our energy supply for decades. NIMBY-types should not be permitted to doom the rest of the country to cripplingly-high gas prices.
When the EIA says the price impact of OCS will not be "significant," they clearly mean in the short term. In the long term, 200,000+ barrels/day represents a significant increase in the daily oil production of the U.S. Again, if you combine this with the potential reserves in ANWR, and the North American oil shale and oil sands, you're looking at many more hundreds of thousands of barrels a day. That's like adding a new Kuwait or Brazil's worth of daily supply. That makes a real difference, and gives us a cushion to ease the transition into more renewable fuels and technologies.
If your concern is the potential for environmental damage, that can be limited in many ways without banning the drilling altogether, as is done in Europe and elsewhere around the world.
The alternative is hoping and wishing that a miracle solution to our problems will fall from the sky, while ever-higher gas prices choke the American economy. Be serious, Rick. That ain't gonna happen, so try to show a little concern for those of us who're driving to work and school everyday.
Anyway, I'm off to purchase several semi-automatic weapons in celebration of my 2nd Amendment rights. Also, perhaps a ham sandwich. God bless, brother. Keep up the good work, and keep hope alive.
One last thing: You don't have to choose between developing alternative energy sources and drilling for more oil. You do both, and maybe (if you're feeling frisky) you tax some of the additional oil revenues to fund research into alternative energy or safer oil drilling tech. Of course that would offset some of the price reductions resulting from increased supply, but it's a reasonable compromise.
What I haven't heard in all these arguments is China and India. As these countries develop isnt it logical to assume their consumption will increase dramatically?
Therefore even if we put more oil on the world market, its going to be sucked up by the two most burgeoning economies in the world thus leaving us with the same supply.
What people tend to forget is that the oil industry is a global economy and not matter how much we drill in the US its not coming back to the US. It's going abroad to China and India. Get with it people. We need to conserve now and reduce our dependence now. As McCain said, it's psychological. Which means it will give us a false sense of security and take our minds off the important, alternate fuel sources!
Gootch: Again, you only need read the EIA report to see that they don't "clearly mean in the short term."
For the lower 48 OCS, annual crude oil production in 2030 is projected to be 7 percent higher—2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case (Figure 20). Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.
...unless, of course, 2030 is your "short term."
And again you make statements and come to conclusions without any links to anything that support them.
I can say that in the first year of offshore drilling there is going to be a massive amount of damage to the coral reefs and marine habitat in the Keys. But if I don't have any thing to back it up, how much weight does that carry?
And you're right, it doesn't have to be an either/or thing. Let the oil companies start drilling on the 68 million acres of land they already have lease rights to but aren't using. That would be a great start.
Right? Right.
And then after we start doing that, let's talk about increasing our refining capacity. Something the oil companies have refused to do as they make money hand over fist.
Take care, brother.
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Rick~
You've got links, but you show staggeringly little knowledge of the situation. They're not smaller rigs -- they're FEWER rigs. I know you think it's one pump and that's it, but getting oil out of an oil field takes THOUSANDS of pumps. I just read that Texas has one million pumps.
And of course we should invest in alternative sources of fuel.
BAC~
China uses 1/6th the oil the US does per capita. Yes, it'll grow, and yes, they have LOTS of people, and YES it's a world economy. Still, an increase in supply is an increase in supply. If it's small, well -- it's like the man says: every little bit helps.
gootch~
fwiw, my reading of the report is that the difference will be small even after the supply goes online. BTW, i have a new blog.
Alesh: I don't claim to be an expert. But I think know how to read. And the EIA report is very clear. As are the other links I've provided.
I was referring to offshore drilling. I could be wrong, but whether you're drilling into a million gallon field or a 3 million gallon field, don't you use the same size drill and/or platform?
"Staggeringly little knowledge," Alesh? As compared to you? Please. You're making me laugh.
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Rick~
There are over 3,000 offshore platforms in the Gulf of Mexico.
http://209.85.165.104/search?q=cache:7XIEOVkqu3EJ:www.enrg.lsu.edu/publications/online/forecasting.pdf+%22offshore+platforms%22+gulf+of+mexico&hl=en&ct=clnk&cd=7&gl=us
Alesh,
So your assuming the Chinese and Indian economies won't surpass that of the US or even catch up in the 10-15 years it takes to produce oil from drilling 9considering our economy is going to be in the shitter for years to come)?
Wishful thinking sir. And let's consider that car in india that only cost $2k dollars. That sir equals MORE cars on the road in india and MORE oil consumption. Imagine a cheap car like that in China (can you imagine the consumption of 1 billion + cars on the road). Think long term Alesh. Even if you assume it has to reasonable to think it just might happen.
Look, folks, This post is about offshore drilling, specifically, offshore drilling off the coast of Florida. You can bring the ANWR into play, you can talk about drilling in Texas and the Gulf of Mexico and you can talk about China, Russia and who ever the heck else you want to bring into the picture.
But the bottom line is and will remain that drilling off the coast of Florida will not lower gas prices. It's clear. The Department of Energy has said it 2 times in 2 years. You want to argue with them and tell them they're wrong and throw your wikipedia and infoplease links at them as proof, have at it.
But as long as there are 68 million acres out there that the oil companies can drill on, as long as there are not enough U.S. refineries in existence to refine the oil that is extracted, as long as oil platforms have substantial accidents, and as long as drilling will have no effect on consumer prices, drilling for oil off the coast of Florida, a State that relies on its beaches for its economy, will never be worth the risk. For me.
But what do I know? Me. One who possesses so staggeringly little knowledge about the subject, surrounded by geniuses with all the answers.
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B.A.C~
What I'm saying, roughly, is that there are some hard times ahead in the next few decades. Anything we can do to soften the landing we should do, lest we end up kicking ourselves.
Certainly your predictions vis-a-vis China and India are very likely.
Rick~
So. In the future I can end arguments with you by citing a department of the federal government? You're kidding, right?
Even if there was no political agenda at play, the simple fact is that nobody knows.
Alesh: When all you have is wikipedia, infoplease, or your own opinion, you betcha.
Even Slate, in your link, recognized the EIA a premiere oil information agency.
As a sidenote, I've mentioned several times here and at other posts on the subject the fact that 68 million acres of leased land are laying untouched by oil companies.
No one, not one person, has addressed that point. Everyone just glosses over it and continues to argue about drilling.
Great. Let's drill. And let's start with that 68 million acres.
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Gootch: 200,000 barrels a day sounds like a lot until you, y'know, do the math. It's less than one percent of our daily consumption of 21 million barrels a day.
Drilling for oil will not only not bring the price of oil down, it won't reduce our dependency on foreign oil. We'll simply use up our home supply of oil quicker, and in five to seven years, we won't have any oil of our own at all.
Job one: get us off our oil habit.
I'll make you a deal: get our consumption down to where 200,000 barrels a day will be at least 20% of our daily consumption, and I will whole-heartedly support drilling anywhere you like. And I think that at THAT point, you'd get a lot more support.
Late to the party with not much to add -the 68 million acres IS the salient point here, those are existing leases the oil companies are not exploiting, because gas isn't expensive enough yet to justify the cost. See, those are their reserves. That's 5 million barrels per day, not a piddly 200,000. When gas hits $5 or $6 a gallon and is profitable to dill, then they'll do it. In the meantime they are just holding the leases and you are all being played like puppets by the oil companies on one side and by the oil futures speculators on the other.
I'm also baffled by Alesh's "less than 1% of us will visit ANWR" comment. Make that less than 0.01%. So? Is less worth protecting than Disneyworld, visited by milions every year?
I am categorically opposed to drilling in Disney World.
Have the existing oil leases been proven to have reserves? Does anyone know? Does anyone know if they've bothered to check?
If the price of oil is not high enough to drill in the existing oil leases, what makes it high enough to drill in the Gulf?
The wildcatter/geologist/speaker Pelosi seems to know. I guess we all know now.
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