Thursday, July 03, 2008

Drilling for Oil In North America

Today is a red letter day when I get an email from my congressman and see a piece in the Austin American-Statesman about my US Senate candidate, and both of them tell you the same thing: we should open up all of our offshore continental shelves to oil and gas exploration.

Here is what Nick Lampson (TX 22) said in his email:

“I urged (Speaker Pelosi and the entire Democratic leadership) to allow debate and votes on legislation to increase domestic energy production, including the opening of the Arctic National Wildlife Refuge and Outer Continental Shelf. This legislation should not be blocked from consideration in favor of harmful efforts to increase taxes and stifle production on existing leases.”
So not only is my congressman in favor of opening up all areas of our continental shelf for oil and gas exploration and development, he wants the Alaskan National Wildlife Reserve (ANWR, pronounced AN-wahr) opened up as well.

Something that Republicans in the House and Senate have been whining about for years.

Noriega, however, stops short of supporting ANWR exploration and development:

“Rick Noriega supports lifting the ban on offshore drilling, allowing states to decide for themselves on drilling plans, but knows that we can’t just drill our way out of this problem, because the fact is the U.S. has 3 percent of world oil reserves and 25 percent of demand.”
Now that makes sense. Texas and other Gulf states have no problem having oil rigs drill in the outer continental shelf (OCS). We have hundreds of oil and gas production platforms out there right now. The grand majority of them can’t be seen from the beach because they are so far over the horizon.

The coastal shelf and slope of the Gulf Coast, you see, is very broad. Texas and its neighboring southern states have had an affinity to offshore drilling because of that and the fact that environmental protection was a foreign concept in these states’ governments in the past.

Not so the West Coast. The west coast continental shelf is very narrow. Every single oil production rig in the western OCS is visible from the beach. And not only that, the west coast experienced an oil well blow out in 1968, a blow out caused by poor drilling decisions.

So when Rick Noriega says that each state should be allowed “to decide for themselves on drilling plans,” that sounds good.

It’s just that it doesn’t happen. California opposed offshore federal lease sales in the past, but nothing came of it.

In the case of oil and gas exploration in federal waters, states don’t have bupkus to say about it.

Never did.

Now on this ANWR stuff, I wonder if anyone knows just what is involved here. If Prudhoe Bay is an example, then 10 years is a minimum period of time between spudding in the first exploration well, and turning the valve on the first production. More likely, 15 years. So this isn’t an immediate solution to avoid 5 dollar gas, is it?

But this is exactly what oil companies and their lobbyists will tell you, and the Kool-Aid goes down smoothly for a majority of Americans.

The other thing that always gets my goat about ANWR rhetoric is that its production will go to make the US energy-independent. Truth is, it might help a bit, but only if the production is sold in the US. Truth is, it won’t be. How do I know this? Once a supertanker is loaded with Alaskan oil at Valdez Harbor it can, and does, go anywhere in the world. Alaskan oil is not reserved for American consumption.

So there’s your second cup of Kool-Aid: ANWR oil will make America energy-independent.


But, and I always save the best for last (a journalist I will never be), the best part is the world OCS hydrocarbon exploration infrastructure is totally saturated right now. Every deep water rig that can possibly make hole is out there right now, making hole. Companies are screaming for rigs and crews to explore for new fields and develop existing ones. They just can’t find any. This is driving the cost of leasing rigs through the roof. There is a massive program to build more rigs, but the point is, the infrastructure isn’t there right now.

So, sell all of the offshore leases you want, it will be years before they can be brought online. We don’t have the resources necessarily to explore for oil in additional offshore acreage right now.

I’d say that both Noriega and Lampson scored points today among the gas-guzzling public. It’s really a shame though, that this public demand is being fed by present-day economics rather than by long-term planning.

Wouldn’t it be best to keep this stuff in the ground while we develop an infrastructure based on alternative energy? Fossil fuel is a finite resource that is too precious a thing to waste on soccer moms who want 3 dollar gas to put in their SUVs again.

When it’s gone, it’s gone.


Anonymous said...

Do you think it is really about soocer moms and their SUV's. I promote using alternatives fuels like it will make me a rich man. But the idea that some people need to be punished for because of what they drive is stupid. SUV's have been a part of the car business since the beginning. So why is it their fault. It will take just as long to switch 300 miilion people to alternative fuels as it would to get oil out of the ground.

Why can't we do both. I see americans getting punished for living the life provided for them. Some people give me the idea that america must pay for its greediness. You are a journalist no doubt by passion. Is it wrong for you to rise to the top of your game make as much money as you want and buy what you want. Or since your successful do you think you should have to pay a whole lot extra for that in taxes.

The truth is america is moving toward alternative fuels. But why can't we move toward tapping into our own supply. Maybe in ten years the economy would reap the rewards of producing oil and selling it to someone else.

In summary it sounds like we should force soccer moms and every other american into alternative fuels by making them suffer at the pump. Then when those alternative fuels are available they can't afford them.

We will be so broke by then how will we pay for hybrid and hydrogen technology. We still have to use oil until then. Oil to build this technology oil to transport this technology. What is your solution.

Hal said...

Anon, now where in that posting did I even insinuate that soccer mom's need punishing. No, despite the fact that I have been cut-off and received the one-finger salute from one or two, I bear them no ill will.

No, my reasoning goes like this: a reason to drill up the OCS and ANWR so that we can have cheap gasoline again is sheer stupidity. Not covered in the post is why gas is so high right now (war and oil speculation). The point is, the pressures we are all facing is just a preliminary to what our children and grandchildren will experience. My solution is not to drill it up and consume it as fast as we can while we can, my solution is to keep it in the ground until we can develop the alternative technologies.

In the meantime, until we stop this insane war in Iraq, and until we can curb the activities of a voracious oil speculation market, we'll just have to live with our mistakes.