Coastal Drilling - For or Against?

[Smiling JOe]

Oil is fungible and no matter who we sell the oil to, it increases supply which will lower prices.

I disagree. Oil is priced in US $, and until alternative fuel sources are readily available with engines to use them, we won't see prices going down. India and China are growing exponentially, and demand for oil will increase exponentially. Add more supply and it won't change much, IMO.

No one is talking about the unexplored oil in the US being "strategic reserves." What happens to our economy if we use that oil to theoretically lower the price, use it all, and then get cut off from other sources of oil? So much for reserves. I know a hiker who used to carry dog biscuits for his emergency food source. He did so in order to have them for emergencies only. If he used peanut m&m's for the emergencies, he would never have them on hand when an emergency rolled around.;-)

 

[30A Skunkape]

I don't care one way or the other about more drilling, but does it matter in the grand scheme of things if we don't have more refineries to process the petroleum?

 

[traderx]

I disagree. Oil is priced in US $, and until alternative fuel sources are readily available with engines to use them, we won't see prices going down. India and China are growing exponentially, and demand for oil will increase exponentially. Add more supply and it won't change much, IMO.

No one is talking about the unexplored oil in the US being "strategic reserves." What happens to our economy if we use that oil to theoretically lower the price, use it all, and then get cut off from other sources of oil? So much for reserves. I know a hiker who used to carry dog biscuits for his emergency food source. He did so in order to have them for emergencies only. If he used peanut m&m's for the emergencies, he would never have them on hand when an emergency rolled around.;-)

Whether the end result is lower prices or prices that don't rise as fast as they otherwise would have, when you increase supply it has an impact.

 

[scooterbug44]

I don't care one way or the other about more drilling, but does it matter in the grand scheme of things if we don't have more refineries to process the petroleum?

This also why ANWR doesn't work - per someone who spent years in Alaska working for the oil companies, there isn't a good way to get the oil to market/refineries FROM there.

A hurricane takes out a refinery or reduces its production and we'll wish for $4 a gallon gas!

 

[traderx]

Link is to a 1998 ANWR feasibility study by the USGS. It is interesting to note that they were centered on $24 per oil barrel. My, how times have changed. Even at $24, their conclusion was that ANWR drilling, recovery and distribution were economically feasible. Just imagine at $140 or $200 per barrel.

Included are the costs of finding, developing, producing, and transporting oil to lower 48 West Coast market based on a 12 percent after-tax return on investment all calculated in constant 1996 dollars. The chart is read as follows: At a market price of $24 per barrel, there is a 95 percent probability of at least 2.0 BB of economically recoverable oil and a 5-percent probability of at least 9.4 BB. The mean or expected value is at least 5.2 BB of economically recoverable oil at $24 per barrel.

http://pubs.usgs.gov/fs/fs-0028-01/fs-0028-01.htm

 

[scooterbug44]

Yes, the oil/reservoirs are there, the infrastructure to get it out isn't!

The pipeline has already outlived its projected lifespan, the decreased flow over the last several years has added wax buildup to the list of maintenance issues, and 50% of the trained personnel who maintain the pipeline are retiring soon.

 

[Smiling JOe]

As skunky says, increasing supply doesn't do anything to prices in the near-term. Without more ways to refine the oil into gasoline (and that costs $$$$$), we won't see prices fall. If you want to make a real difference, decrease demand -- ie- find ways to stop burning so much oil. That can happen immediately, where increasing supply will take years, and then, is still only limited. Renewable sources and free sources seem much more versatile.

 

[traderx]

As skunky says, increasing supply doesn't do anything to prices in the near-term. Without more ways to refine the oil into gasoline (and that costs $$$$$), we won't see prices fall. If you want to make a real difference, decrease demand -- ie- find ways to stop burning so much oil. That can happen immediately, where increasing supply will take years, and then, is still only limited. Renewable sources and free sources seem much more versatile.

I have no issue with decreasing demand so long as the government does not mandate it.

BTW, some great photos you have posted.

 

[Smiling JOe]

traderx, we agree in that I, too, don't think the gov't needs to start mandating cuts. That is just wrong. It is we individuals who need to take action on finding ways to decrease our consumption, and when we do, the demand can change immediately.

 

[scooterbug44]

I think the $4 - $5 a gallon gas is "mandating" cuts in demand just fine without government help!

It is unfortunately hurting some folks who can't afford the increased costs, but IMO there are worse things than people buying cars with better mileage, reducing their commute distances, using public or alternate transportation, and being conscious of a need to conserve.