THE GULF:
McCain: Allow Oil Drilling Off Coast
Sen. John McCain plans to call Tuesday for lifting the ban on offshore oil and gas drilling along much of the U.S. coastline -- but would give states like Florida veto power over opening up their shores. McCain, who plans to unveil his proposal in detail Tuesday, said Monday that lifting the decades-old moratorium should be a ''very high priority'' with gas prices soaring. He said that allowing states to explore for gas and oil "and perhaps providing additional incentives for states to permit exploration off their coasts would be very helpful in the short term in resolving our energy crisis." Barack Obama calls the plan "misguided." [Source: Miami Herald]
This from today's Florida Trend:
Replies
165
Beach Fanatic
Do you believe that China, India, Brazil, Mexico and Venezuela would be better stewards of the environment?At what stage are the drilling operations of these nations?
SoWal Expert
I cannot imagine how our tourism would be affected if we had oil slicks on the water at our beach. People already moan about Sargassum grass, June Grass and Dog Flies, but Oil slicks might be something from which we never recover.
Beach Fanatic
At what stage are the drilling operations of these nations?
Mexico is already drilling and has had a spill, case in point. Brazil had identified a huge reserve in the Atlantic. China, India and Venezuela have done studies. I assume that any country can drill in international waters but not sure. Does anyone know? Wouldn't it be interesting to have, oh say Brazil, drilling 3.000001 miles south of Seaside?
http://www.sfgate.com/cgi-bin/artic...04/14/financial/f095934D37.DTL&type=printable
http://www.newsweek.com/id/61541
http://www.sptimes.com/2006/09/12/Business/Cuba_signs_deal_to_dr.shtml
http://www.caribbeannetnews.com/news-8252--5-5--.html
http://gatewaypundit.blogspot.com/2006/05/its-official-cuba-hires-china-to-drill.html
http://www.redorbit.com/news/science/181857/rig_rates_rise_fleets_active_in_venezuela/
SoWal Expert
Per MSNBC, offshore or ANWR drilling would take a decade to come to fruition and would only have a price impact of 1% of the current oil price when it does.
http://www.msnbc.msn.com/id/25287795/
http://www.msnbc.msn.com/id/25287795/
beats on hood
Very interesting editorial by Jay Bookman in the Atlanta paper yesterday. Here's a summary.
1. THE PROBLEM
The main problem is the sharp fall of the dollar with respect to other currencies.
2. THE CAUSE
Demand for oil is rising rapidly whereas the supply is rising slowly.
3. SUPPLY AND DEMAND
"The United States is the third-largest oil producer in the world, trailing only Saudi Arabia and Russia. We produce more than twice as much oil every day as Iran, the fourth-largest producer. Yet the 8.3 million barrels of oil we produce every day don't come close to meeting our demand of 21 million barrels a day."
4. WE DEMAND, THEY SUPPLY
To meet U.S. demand, we pay almost $2 billion per day for imported oil.
5. FALSE SOLUTION A
"The rising price of gasoline is blamed by some on the fact that no new refinery has been built in this country since the 1970s. As the story goes, environmental regulations have made it impossible to build needed new facilities."
"However, both claims are exaggerations. While no new refineries have been built, that is the result of market-based decisions by private investors, not government agencies. Until very recently, we actually had a glut of refining capacity in this country."
6. FALSE SOLUTION B
"Would opening the Arctic National Wildlife Refuge and other coastal areas to oil drilling have any effect on gasoline prices, as many politicians claim? No. Let's take ANWR as an example. Many Americans would be surprised to learn that oil produced in ANWR would be sold to Americans at whatever the global price for oil happened to be. There's no "hometown discount" ? U.S. consumers would pay 100 percent of the global price for ANWR oil."
"According to the federal Energy Information Administration, if drilling began in ANWR this year, oil production from that region would peak around 2027-2030. This would only lower the world price of oil by about 1 percent. If gasoline is selling at $5 a gallon in 2030, that would amount to 5 cents a gallon."
"The EIA predicts that as ANWR oil came on the world market, OPEC would simply reduce its production, thus keeping the global oil supply ? and the global price ? unchanged. So in the end, drilling in the wildlife refuge and offshore areas would have little or no impact on oil prices."
7. THE HARD TRUTH
"Analysts believe that world oil production is now peaking, and today's historically high petroleum prices will seem like a bargain by 2018."
8. FUTURE SHOCK
"There are no outs. Overall, an economy and lifestyle built on cheap oil will be forced to undergo wrenching changes in a fairly short period of time."
Here's the link to the full article:
http://www.ajc.com/search/content/opinion/stories/2008/06/22/oiloped.html
1. THE PROBLEM
The main problem is the sharp fall of the dollar with respect to other currencies.
2. THE CAUSE
Demand for oil is rising rapidly whereas the supply is rising slowly.
3. SUPPLY AND DEMAND
"The United States is the third-largest oil producer in the world, trailing only Saudi Arabia and Russia. We produce more than twice as much oil every day as Iran, the fourth-largest producer. Yet the 8.3 million barrels of oil we produce every day don't come close to meeting our demand of 21 million barrels a day."
4. WE DEMAND, THEY SUPPLY
To meet U.S. demand, we pay almost $2 billion per day for imported oil.
5. FALSE SOLUTION A
"The rising price of gasoline is blamed by some on the fact that no new refinery has been built in this country since the 1970s. As the story goes, environmental regulations have made it impossible to build needed new facilities."
"However, both claims are exaggerations. While no new refineries have been built, that is the result of market-based decisions by private investors, not government agencies. Until very recently, we actually had a glut of refining capacity in this country."
6. FALSE SOLUTION B
"Would opening the Arctic National Wildlife Refuge and other coastal areas to oil drilling have any effect on gasoline prices, as many politicians claim? No. Let's take ANWR as an example. Many Americans would be surprised to learn that oil produced in ANWR would be sold to Americans at whatever the global price for oil happened to be. There's no "hometown discount" ? U.S. consumers would pay 100 percent of the global price for ANWR oil."
"According to the federal Energy Information Administration, if drilling began in ANWR this year, oil production from that region would peak around 2027-2030. This would only lower the world price of oil by about 1 percent. If gasoline is selling at $5 a gallon in 2030, that would amount to 5 cents a gallon."
"The EIA predicts that as ANWR oil came on the world market, OPEC would simply reduce its production, thus keeping the global oil supply ? and the global price ? unchanged. So in the end, drilling in the wildlife refuge and offshore areas would have little or no impact on oil prices."
7. THE HARD TRUTH
"Analysts believe that world oil production is now peaking, and today's historically high petroleum prices will seem like a bargain by 2018."
8. FUTURE SHOCK
"There are no outs. Overall, an economy and lifestyle built on cheap oil will be forced to undergo wrenching changes in a fairly short period of time."
Here's the link to the full article:
http://www.ajc.com/search/content/opinion/stories/2008/06/22/oiloped.html
Beach Fanatic
According to some sources I've read/heard, the oil from drilling in Anwr would also be shipped to Japan, because it is closer (read cheaper) to the market there than it would be to ship it to the Lower 48....
Edited
Beach Fanatic
Interesting article written by an MIT professor....
http://www.cato.org/pubs/regulation/regv27n1/v27n1-1.pdf
http://www.cato.org/pubs/regulation/regv27n1/v27n1-1.pdf
Beach Fanatic
SoWal Expert
Interesting email from Florida Congressman Alan Boyd - don't agree with everything he says, but interesting to read. I posted the entire email and just added some bold as I didn't want to get accused of politically motivated editing or changing his tone etc. ;-)
Dear Friends,
At gas stations across Florida, the consequences of our addiction to foreign oil are becoming painfully clear. Family budgets are being strained under the weight of skyrocketing gas prices. Local farmers are struggling with the high cost of diesel. Small businesses are feeling the gas price pinch also, which has resulted in higher business costs and less money in the pockets of hardworking Floridians.
Gas prices have soared in recent months due to many factors, including the falling value of the U.S. dollar, a drastic boom in oil consumption by developing nations like China and India, and a tighter supply of oil. Gas prices have soared in recent years, however, because the U.S. has failed to develop a balanced, forward thinking approach to our energy needs.
Unfortunately, no silver bullet solution will immediately lower gas prices, and those who think drilling directly off Florida’s coast is the answer may not have all the facts. History has shown that drilling alone will solve neither our short term nor our long term energy problems. Since 2000, drilling has increased dramatically—climbing about 66 percent—while gas prices also have increased, from $1.47 per gallon in 2001 to the current price of over $4 per gallon.
But don’t get me wrong—domestic oil and gas exploration should be a component of any multifaceted energy plan; it just can’t be the only component, and it must be done responsibly. In 2006, I supported allowing oil and gas exploration in a 5.9 million acre-area in the Gulf of Mexico, 125 miles off the coast and outside the military mission region. The area is known to have about 1.26 billion barrels of oil. This agreement struck a balance between those who want to build oil rigs directly off our shores and those who want to protect our beaches and Florida’s billion dollar tourism industry. At the same time, this agreement maintained the military training areas in the gulf, which are critical to Tyndall and Eglin Air Force Bases.
I also support opening up areas of the Arctic National Wildlife Refuge (ANWR) in Alaska to drilling. According to the U.S. Geological Survey, ANWR could hold between 5.7 and 16 billion barrels of oil.
However, proponents of drilling must realize that oil deep in the ground has no direct link to today’s gas prices. While we have seen a significant increase in domestic drilling in the past few years, it will take about 10 years for this oil and gas to reach the market. Also, the long term effects of increased domestic drilling are dubious. According to a recent study by the Energy Department, additional oil production resulting from the opening of ANWR would be only a small portion of total world oil production and would likely only bring oil prices down by 75 cents a barrel, which is currently at a staggering $131 a barrel.
The bottom line: we cannot drill our way out of the energy crisis. We must develop a long term plan that makes us less dependent upon foreign nations for our energy needs.
This Congress is making some inroads in this effort by implementing short term solutions to bring down gas prices and by working towards a long term strategy to make our nation energy independent. For example, in May, I voted to temporarily suspend the filling of the Strategic Petroleum Reserve (SPR), the nation’s emergency supply of crude oil. The SPR is already at 97 percent capacity. Experts have concluded that by stopping shipments to the reserve we can add 70,000 barrels of oil a day back into the market, which is estimated to reduce gas prices from 5 to 24 cents a gallon.
Also, my fellow Blue Dogs and I have outlined key energy principles that offer a comprehensive approach to our nation’s long term energy policy. The principles focus on domestic energy production, renewable energy sources, and technology development. These principles recognize that, when it comes to our energy policy, we must look at all the pieces of the puzzle.
As we work to combat high gas prices and establish a long term energy plan, we also must recognize the role of the private sector in this effort. Our energy crisis is a supply and demand problem. While the government can provide incentives for the private sector to develop alternative energy and energy efficient products, the private sector, not the government, ultimately will bring stability to the market. Also, we must work to improve our economic outlook. Oil is priced in U.S. dollars, and as the price of the dollar increases in value, the cost of oil will go down.
In the end, there are many challenges and opportunities before us when it comes to our energy needs. The answers may seem overwhelming, but we have the tools to regain control of our energy future if we utilize our greatest resource: the innovative spirit of the American people. The energy crisis requires all of us working together toward a comprehensive plan that addresses our immediate energy problems and ensures that our energy needs are met for generations to come.
Sincerely,
F. Allen Boyd, Jr.
Dear Friends,
At gas stations across Florida, the consequences of our addiction to foreign oil are becoming painfully clear. Family budgets are being strained under the weight of skyrocketing gas prices. Local farmers are struggling with the high cost of diesel. Small businesses are feeling the gas price pinch also, which has resulted in higher business costs and less money in the pockets of hardworking Floridians.
Gas prices have soared in recent months due to many factors, including the falling value of the U.S. dollar, a drastic boom in oil consumption by developing nations like China and India, and a tighter supply of oil. Gas prices have soared in recent years, however, because the U.S. has failed to develop a balanced, forward thinking approach to our energy needs.
Unfortunately, no silver bullet solution will immediately lower gas prices, and those who think drilling directly off Florida’s coast is the answer may not have all the facts. History has shown that drilling alone will solve neither our short term nor our long term energy problems. Since 2000, drilling has increased dramatically—climbing about 66 percent—while gas prices also have increased, from $1.47 per gallon in 2001 to the current price of over $4 per gallon.
But don’t get me wrong—domestic oil and gas exploration should be a component of any multifaceted energy plan; it just can’t be the only component, and it must be done responsibly. In 2006, I supported allowing oil and gas exploration in a 5.9 million acre-area in the Gulf of Mexico, 125 miles off the coast and outside the military mission region. The area is known to have about 1.26 billion barrels of oil. This agreement struck a balance between those who want to build oil rigs directly off our shores and those who want to protect our beaches and Florida’s billion dollar tourism industry. At the same time, this agreement maintained the military training areas in the gulf, which are critical to Tyndall and Eglin Air Force Bases.
I also support opening up areas of the Arctic National Wildlife Refuge (ANWR) in Alaska to drilling. According to the U.S. Geological Survey, ANWR could hold between 5.7 and 16 billion barrels of oil.
However, proponents of drilling must realize that oil deep in the ground has no direct link to today’s gas prices. While we have seen a significant increase in domestic drilling in the past few years, it will take about 10 years for this oil and gas to reach the market. Also, the long term effects of increased domestic drilling are dubious. According to a recent study by the Energy Department, additional oil production resulting from the opening of ANWR would be only a small portion of total world oil production and would likely only bring oil prices down by 75 cents a barrel, which is currently at a staggering $131 a barrel.
The bottom line: we cannot drill our way out of the energy crisis. We must develop a long term plan that makes us less dependent upon foreign nations for our energy needs.
This Congress is making some inroads in this effort by implementing short term solutions to bring down gas prices and by working towards a long term strategy to make our nation energy independent. For example, in May, I voted to temporarily suspend the filling of the Strategic Petroleum Reserve (SPR), the nation’s emergency supply of crude oil. The SPR is already at 97 percent capacity. Experts have concluded that by stopping shipments to the reserve we can add 70,000 barrels of oil a day back into the market, which is estimated to reduce gas prices from 5 to 24 cents a gallon.
Also, my fellow Blue Dogs and I have outlined key energy principles that offer a comprehensive approach to our nation’s long term energy policy. The principles focus on domestic energy production, renewable energy sources, and technology development. These principles recognize that, when it comes to our energy policy, we must look at all the pieces of the puzzle.
As we work to combat high gas prices and establish a long term energy plan, we also must recognize the role of the private sector in this effort. Our energy crisis is a supply and demand problem. While the government can provide incentives for the private sector to develop alternative energy and energy efficient products, the private sector, not the government, ultimately will bring stability to the market. Also, we must work to improve our economic outlook. Oil is priced in U.S. dollars, and as the price of the dollar increases in value, the cost of oil will go down.
In the end, there are many challenges and opportunities before us when it comes to our energy needs. The answers may seem overwhelming, but we have the tools to regain control of our energy future if we utilize our greatest resource: the innovative spirit of the American people. The energy crisis requires all of us working together toward a comprehensive plan that addresses our immediate energy problems and ensures that our energy needs are met for generations to come.
Sincerely,
F. Allen Boyd, Jr.
beats on hood
According to Bookman, "China and its booming economy account for a lot of that growth in demand. China's oil consumption tripled between 1990 and 2006." Because of the strong factors driving an increase in demand (their booming economy and their growing population), even if demand in the U.S. is reduced, the forces are in place for China to be a major player in the growing global demand, on which our imported oil prices are based.
Beach Fanatic
Scooterbug, can you email Allen Boyd's letter to Charlie Crist?
Beach Fanatic
my opinion on it is undecided, but did read a fascinating artile on the subject in USAToday and that Chevron is paying, over $600,000 a day to rent an oil platform for Gulf drilling.
No way that cost is going to bring down the price of gas.
No way that cost is going to bring down the price of gas.
Edited
SoWal Insider
But don?t get me wrong?domestic oil and gas exploration should be a component of any multifaceted energy plan; it just can?t be the only component, and it must be done responsibly.
I don't believe any drilling proponent thinks it's the end all be all solution. It's part of the solution. We need a comprehensive long term solution which includes drilling in ANWAR and potentially off our coast, research funding in alternative energy, robust development of nuclear power plants, solar, wind, etc. etc.. Basically all of the above.
I'm not convinced either Obama or McCain intend to approach it this way. I see partisianship in both their policy initiatives which I find very frustrating.
SWGB
Everyday that I wake up in South Walton I feel like I'm living a dream and have hit the lottery. This is what I know most days will be like:
Having said that I feel that even the slightest chance that this could happen is completely unacceptable:
I don't know about everyone else, and I am a gambling man, but the odds involved are just too close for my tastes.
Keep in mind that not only would an oil spill destroy the beaches of South Walton it would destroy a lot of other things. Dune Lakes would be digusting waste lands, property values would drop over night, and the local economy would literally go belly up.
In the event of a crude oil spill it would not just be the beach affected. If you can smell the beach now you would have a lovely aroma of crude oil and fumes. No one is going to vacation or live in that environment.
As for clean up, I just have to laugh, anybody been to Alaska lately? There is still oil from the Valdez spill, pick up any rock. I'd rather pay $20/gallon for gas than see this paradise make the Jersey shore look like an untouched preserve.
All in IMHO.
Having said that I feel that even the slightest chance that this could happen is completely unacceptable:
I don't know about everyone else, and I am a gambling man, but the odds involved are just too close for my tastes.
Keep in mind that not only would an oil spill destroy the beaches of South Walton it would destroy a lot of other things. Dune Lakes would be digusting waste lands, property values would drop over night, and the local economy would literally go belly up.
In the event of a crude oil spill it would not just be the beach affected. If you can smell the beach now you would have a lovely aroma of crude oil and fumes. No one is going to vacation or live in that environment.
As for clean up, I just have to laugh, anybody been to Alaska lately? There is still oil from the Valdez spill, pick up any rock. I'd rather pay $20/gallon for gas than see this paradise make the Jersey shore look like an untouched preserve.
All in IMHO.
SoWal Insider
In a sane world, the leadership of the US would peg the price of a barrel of oil to a bushel of US-exported grain...
1 Bushel of Wheat, Corn or Soybeans = 1 Barrel of Oil.
Not happy about it Sheikh Mohammed?...eat sand!
A new twist on the Econ 101 Guns and Butter Curve
.
1 Bushel of Wheat, Corn or Soybeans = 1 Barrel of Oil.
Not happy about it Sheikh Mohammed?...eat sand!
A new twist on the Econ 101 Guns and Butter Curve
.
Edited
Beach FanaticAuthor
You are right, shelly. Painful as it is to suffer high-priced oil, starving is probably a wee bit worse.
SoWal Expert
Shelly, my dad (corn, wheat, and peanut farmer) thanks you.
Beach Fanatic
In a sane world, the leadership of the US would peg the price of a barrel of oil to a bushel of US-exported grain...
1 Bushel of Wheat, Corn or Soybeans = 1 Barrel of Oil.
Not happy about it Sheikh Mohammed?...eat sand!
A new twist on the Econ 101 Guns and Butter Curve
.
Please keep posting stuff like this so I can try to justify to myself that real estate will be coming back soon.
SoWal Insider
Please keep posting stuff like this so I can try to justify to myself that real estate will be coming back soon.
...only if that real estate comes with mineral rights to the oil field below. (Or is primo corn-producing land that's not on a flood plain.)
.
Edited
SoWal Insider
I just might be voting for Obama instead of McCain. Obama is on CNN right now saying that there is absolutely no evidence that offshore drilling will lower gas prices and that he is against offshore drilling.
I remember emailing Jeb Bush a few years ago stating my opposition to offshore drilling in the Gulf. His return email said that he was against it as well. I guess his big bro disagrees.
To clarify, McCain has said lift the federal ban, but leave the decision up to the state involved. Now that's what I call a true conservative agenda.
Banned
.
beats on hood
To clarify, McCain has said lift the federal ban, but leave the decision up to the state involved. Now that's what I call a true conservative agenda.Who in the state of Florida would make that decision if the decision were left up to the state? I imagine the state legislators?
Beach Fanatic
Very interesting editorial by Jay Bookman in the Atlanta paper yesterday. Here's a summary.
1. THE PROBLEM
The main problem is the sharp fall of the dollar with respect to other currencies.
2. THE CAUSE
Demand for oil is rising rapidly whereas the supply is rising slowly.
3. SUPPLY AND DEMAND
"The United States is the third-largest oil producer in the world, trailing only Saudi Arabia and Russia. We produce more than twice as much oil every day as Iran, the fourth-largest producer. Yet the 8.3 million barrels of oil we produce every day don't come close to meeting our demand of 21 million barrels a day."
4. WE DEMAND, THEY SUPPLY
To meet U.S. demand, we pay almost $2 billion per day for imported oil.
5. FALSE SOLUTION A
"The rising price of gasoline is blamed by some on the fact that no new refinery has been built in this country since the 1970s. As the story goes, environmental regulations have made it impossible to build needed new facilities."
"However, both claims are exaggerations. While no new refineries have been built, that is the result of market-based decisions by private investors, not government agencies. Until very recently, we actually had a glut of refining capacity in this country."
6. FALSE SOLUTION B
"Would opening the Arctic National Wildlife Refuge and other coastal areas to oil drilling have any effect on gasoline prices, as many politicians claim? No. Let's take ANWR as an example. Many Americans would be surprised to learn that oil produced in ANWR would be sold to Americans at whatever the global price for oil happened to be. There's no "hometown discount" ? U.S. consumers would pay 100 percent of the global price for ANWR oil."
"According to the federal Energy Information Administration, if drilling began in ANWR this year, oil production from that region would peak around 2027-2030. This would only lower the world price of oil by about 1 percent. If gasoline is selling at $5 a gallon in 2030, that would amount to 5 cents a gallon."
"The EIA predicts that as ANWR oil came on the world market, OPEC would simply reduce its production, thus keeping the global oil supply ? and the global price ? unchanged. So in the end, drilling in the wildlife refuge and offshore areas would have little or no impact on oil prices."
7. THE HARD TRUTH
"Analysts believe that world oil production is now peaking, and today's historically high petroleum prices will seem like a bargain by 2018."
8. FUTURE SHOCK
"There are no outs. Overall, an economy and lifestyle built on cheap oil will be forced to undergo wrenching changes in a fairly short period of time."
Here's the link to the full article:
http://www.ajc.com/search/content/opinion/stories/2008/06/22/oiloped.html
Jay Bookman is an editorial page writer, not an economics wizard. Not one I would rely on for predictions or pronunciations regarding supply/demand/oil prices.
He doesn't even mention the HUGE oil reserves buried in Colorado, Utah and Wyoming oil shale. If tapped to the fullest potential, these reserves would last hundreds of years.
Beach Fanatic
Jay Bookman is an editorial page writer, not an economics wizard. Not one I would rely on for predictions or pronunciations regarding supply/demand/oil prices.
He doesn't even mention the HUGE oil reserves buried in Colorado, Utah and Wyoming oil shale. If tapped to the fullest potential, these reserves would last hundreds of years.
Oil shale is another thing altogether. It is sedimentary rock.
It might be worth attempting, but extracting the crude is no minor undertaking.
And once extracted, it is not oil. It is this stuff called kerogen. These guys seem to have it all figured out:
http://www.petroprobe.com/index.php?sc=4
Ah, well, it will be interesting to see how this all ends: perhaps new jobs would come of it.
I just wish we could come up with an elegant, creative solution which did not necessarily line the pockets of oil executives.
beats on hood
Jay Bookman is an editorial page writer, not an economics wizard. Not one I would rely on for predictions or pronunciations regarding supply/demand/oil prices.That's true -- he's an editorial writer. He backed up most of his statements with data from the U.S. Energy Information Administration and Reuters. The link doesn't show all of the charts that were in the newspaper.
He doesn't even mention the HUGE oil reserves buried in Colorado, Utah and Wyoming oil shale. If tapped to the fullest potential, these reserves would last hundreds of years.
It'll be interesting to get home from the beach and catch up on my AJC's to read the responses to his editorial.
Edited
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