Livescience takes a look at the domestic drilling issue, noting the US is still the third leading oil producer in the world. Of course, we're also the leading consumer, using 20 million barrels a day while producing 8 million barrels.
"Polls have shown that a majority of Americans want an increase in offshore drilling. In response, Congress let a 27-year-old moratorium on offshore oil drilling expire at the end of last month. This put into play about 16 billion barrels of oil (or about 21 percent of U.S. offshore resources), according to the Department of Energy (DOE). However, this is just a drop in the bucket.
"We have significant oil and natural gas resources here in the United States," said Richard Ranger, a senior policy advisor for the American Petroleum Institute. He quoted government estimates that say federal lands have 116.4 billion barrels of undiscovered technically recoverable oil, which could power 65 million cars for 60 years."
They also point out that new techniques are allowing old wells to continue to produce, such as injuecting water or carbon dioxide into wells, known as EOR (Enhanced Oil Recovery). EOR techniques could put as much as 240 billion barrels into production in the US according to a 2006 estimate. They also point out the potential of unconventional resources such as oil sands and oil shale, which oculd add nearly 2 trillion barrels to domestic supplies.
Showing posts with label Economics - Oil Production. Show all posts
Showing posts with label Economics - Oil Production. Show all posts
Tuesday, November 04, 2008
Thursday, September 25, 2008
No Oil Myth
Great column at The American Thinker by Janet Levy regarding the supply of oil resources in the US. First, energy supply estimates use false methodologies and are consistently understated - predictions of the oil supply running out were been made seven times before the year 1950 alone, even while the US was the world's leading oil producer until 1973, and is still the third largest (if I recall correctly) today.
The primary issue with the numbers are that they do not count actual oil resources, but oil reserves, which is the oil that can be economically and physically recoverable, which changes as new technology is introduced. Resources also include huge amounts of oil from unconventional resources such as oil shale, tar sands, and coal liquification. Reserve calculation also use current prices and production rates, which are also subject to change. In addition, as prices rise, the economic feasibility of more difficult to reach supplies becomes more attractive, and it becomes increasingly feasible to exploit unconventional resources.
Levy discusses some of the changes new technology brings:
"...well depths now approach 30,000 feet on land and, in offshore drilling, water depths to 9,000 feet. The yield from a single well has increased greatly through the use of horizontal drilling techniques. Instead of a single well accessed through one vertical shaft, multiple horizontal shafts are now bored from a vertical shaft, resulting in substantially greater yields. Other new technologies that have increased the efficiency and effectiveness of oil discovery and exploration include:
Hydraulic fracturing - Injection of fluids into a well under high pressure to release oil from rock formations.
Tertiary recovery techniques - Injection of C02 or natural gas into the well to improve oil viscosity and draw more oil into the well bore.
Reservoir simulation technology (RST) - Computer modeling of reservoir properties through mapping and behavior simulation to aid in resource prediction.
4-D seismic imagery - Use of time intervals and dynamic evolution of reservoirs, to lessen guesswork and allow geologists to view reserves below the surface. It also reduces drilling risks and improves recovery by identifying drainage patterns and bypassed petroleum sources.
In addition, technological advances have led to re-tapping of previously capped wells and opening of closed formations to production. It has also dramatically reduced the oil-production footprint. In the 1970s, wells were spaced at least 100 feet apart. Today, with drilling and equipment advances, wells can now be placed 50, 25 and even 10 feet apart. An oil field covering 65 acres thirty years ago would use less than 10 acres today."
Levy also discusses unconventional resources in some depth, the first being Oil shale, of which there is an estimate 1.5 trillion barrels to be found in the American West, a oil supply far greater than the known reserves of even leading oil producer Saudi Arabia. Such oil resources can be profitably extracted at prices over just $30 a barrel. Tar sand supplies in Canada, which exceed 174 billion barrels, already supply about half of that nation's million plus barrel exports to the US, and their total oil producton from such supplies is expected to reach over 3 million barrels a day in the next decade. Canada is the US's leading oil supplier.
And then there is coal liquification, or the conversion of coal into liquid fuels. This technology was pioneered by Nazi Germany during World War 2 and is used today in South Africa to supply 40% of that nation's petroleum needs. This technology is proven economically effective at world oil prices of just $30 a barrel, and the US possesses 27% of the world coal supply - in effect, the US is the Saudi Arabia of coal. The US Airforce is planning to use the tehcnology to supply all its domestic fuel needs by 2016.
Levy then returns to conventional sources of supply to be found within the US, which using 30 year old estimates is thought to be around86 billion barrels in offshore depsoits and 32 billion onshore. However, this estimate does not include new technologies, unconventional resources, or relatively new estimates of recent discoveries like the Bakken formation found under the northern Great Plains states and the Alaskan National Wildlife Refuge. The US Geological Survey increased its estimates of the Bakken formation in 2008 to between 3-4 billion barrels, and oil industry estimates of ANWR believe that area could hold anywhere from 9 to 16 billion barrels.
Unfortunately, at least until Sept. 30th when it is set to expire, we can't even go take a look at 85% of the offshore deposits due to the Congressional moratorium, not to mention develop our oil shale deposits. We shoulod at least examine what we have, shouldn't we?
The primary issue with the numbers are that they do not count actual oil resources, but oil reserves, which is the oil that can be economically and physically recoverable, which changes as new technology is introduced. Resources also include huge amounts of oil from unconventional resources such as oil shale, tar sands, and coal liquification. Reserve calculation also use current prices and production rates, which are also subject to change. In addition, as prices rise, the economic feasibility of more difficult to reach supplies becomes more attractive, and it becomes increasingly feasible to exploit unconventional resources.
Levy discusses some of the changes new technology brings:
"...well depths now approach 30,000 feet on land and, in offshore drilling, water depths to 9,000 feet. The yield from a single well has increased greatly through the use of horizontal drilling techniques. Instead of a single well accessed through one vertical shaft, multiple horizontal shafts are now bored from a vertical shaft, resulting in substantially greater yields. Other new technologies that have increased the efficiency and effectiveness of oil discovery and exploration include:
Hydraulic fracturing - Injection of fluids into a well under high pressure to release oil from rock formations.
Tertiary recovery techniques - Injection of C02 or natural gas into the well to improve oil viscosity and draw more oil into the well bore.
Reservoir simulation technology (RST) - Computer modeling of reservoir properties through mapping and behavior simulation to aid in resource prediction.
4-D seismic imagery - Use of time intervals and dynamic evolution of reservoirs, to lessen guesswork and allow geologists to view reserves below the surface. It also reduces drilling risks and improves recovery by identifying drainage patterns and bypassed petroleum sources.
In addition, technological advances have led to re-tapping of previously capped wells and opening of closed formations to production. It has also dramatically reduced the oil-production footprint. In the 1970s, wells were spaced at least 100 feet apart. Today, with drilling and equipment advances, wells can now be placed 50, 25 and even 10 feet apart. An oil field covering 65 acres thirty years ago would use less than 10 acres today."
Levy also discusses unconventional resources in some depth, the first being Oil shale, of which there is an estimate 1.5 trillion barrels to be found in the American West, a oil supply far greater than the known reserves of even leading oil producer Saudi Arabia. Such oil resources can be profitably extracted at prices over just $30 a barrel. Tar sand supplies in Canada, which exceed 174 billion barrels, already supply about half of that nation's million plus barrel exports to the US, and their total oil producton from such supplies is expected to reach over 3 million barrels a day in the next decade. Canada is the US's leading oil supplier.
And then there is coal liquification, or the conversion of coal into liquid fuels. This technology was pioneered by Nazi Germany during World War 2 and is used today in South Africa to supply 40% of that nation's petroleum needs. This technology is proven economically effective at world oil prices of just $30 a barrel, and the US possesses 27% of the world coal supply - in effect, the US is the Saudi Arabia of coal. The US Airforce is planning to use the tehcnology to supply all its domestic fuel needs by 2016.
Levy then returns to conventional sources of supply to be found within the US, which using 30 year old estimates is thought to be around86 billion barrels in offshore depsoits and 32 billion onshore. However, this estimate does not include new technologies, unconventional resources, or relatively new estimates of recent discoveries like the Bakken formation found under the northern Great Plains states and the Alaskan National Wildlife Refuge. The US Geological Survey increased its estimates of the Bakken formation in 2008 to between 3-4 billion barrels, and oil industry estimates of ANWR believe that area could hold anywhere from 9 to 16 billion barrels.
Unfortunately, at least until Sept. 30th when it is set to expire, we can't even go take a look at 85% of the offshore deposits due to the Congressional moratorium, not to mention develop our oil shale deposits. We shoulod at least examine what we have, shouldn't we?
Wednesday, September 10, 2008
American Oil
Dan Kish at Human Events explains the realities of oil exploration, and the disinformation being endlessly recycled by the media and Congressional Democrats opposed to exploring for domestic energy resources. The biggest myth is that America uses 25% of the world's oil with only 3% of the reserves. But you have no idea of what percentage of the world reserves are within US control if oil companies are forbidden to even look for additional energy supplies, which is currently the case (at least until September 30, when the Congressional moratorium is scheduled to expire).
"We will never increase our oil reserves if we can never look. A huge amount of acres are owned by the federal government off our shores and onshore, principally in the western states, but instead of addressing that problem and helping to bring down energy prices, politicians have been making up stories and trying to fool Americans with wild allegations. The truth is, over 96% of the lands that belong to the taxpayer haven’t even been leased by the government so that energy exploration might occur."
Then there is the other lie that the 68 million acres (of 91 miilion acres total) under lease that aren't producing any energyis because the oil companies are simply sitting on these leases and refuse to drill. The truth is that the lease is only the start of the process, and that 1/3 of offshore leases near the shore actually wind producing energy economically, while only about 1/5 of deep water leases prove to do so. Onshore is actually only about 1/10, so the vast majority of leases never wind up discovering and producign any energy whatsoever.
"So, if the chances of finding oil under leases in various categories of lands are 33%, 20% and 10%, it probably makes sense that they’re only producing oil on 25.6% of the leases they hold. In fact, that’s pretty good, and well within the historic range of lands producing versus lands leased. The problem is the government is leasing much less land than it did several decades ago. If oil explorers could look in more places for oil and gas, the chances are they would find more of it. With more supply, prices would come down."
Then there are the environmental activist convinced they are saving the planet from the evil oil corporations tying up any activity from occuring via their favorite arm of the government, the endless judicial process. Just since 2000, lawsuits relating to energy exploration have increased over 700%. There are over 1.7 billion acres of government controlled areas offshore and another 700 million acres onshore, yet the government allows exploration and leasing of only 91 million acres, less than 4% of the total.
The fact of the matter is, unless we look, we'll never know.
"We will never increase our oil reserves if we can never look. A huge amount of acres are owned by the federal government off our shores and onshore, principally in the western states, but instead of addressing that problem and helping to bring down energy prices, politicians have been making up stories and trying to fool Americans with wild allegations. The truth is, over 96% of the lands that belong to the taxpayer haven’t even been leased by the government so that energy exploration might occur."
Then there is the other lie that the 68 million acres (of 91 miilion acres total) under lease that aren't producing any energyis because the oil companies are simply sitting on these leases and refuse to drill. The truth is that the lease is only the start of the process, and that 1/3 of offshore leases near the shore actually wind producing energy economically, while only about 1/5 of deep water leases prove to do so. Onshore is actually only about 1/10, so the vast majority of leases never wind up discovering and producign any energy whatsoever.
"So, if the chances of finding oil under leases in various categories of lands are 33%, 20% and 10%, it probably makes sense that they’re only producing oil on 25.6% of the leases they hold. In fact, that’s pretty good, and well within the historic range of lands producing versus lands leased. The problem is the government is leasing much less land than it did several decades ago. If oil explorers could look in more places for oil and gas, the chances are they would find more of it. With more supply, prices would come down."
Then there are the environmental activist convinced they are saving the planet from the evil oil corporations tying up any activity from occuring via their favorite arm of the government, the endless judicial process. Just since 2000, lawsuits relating to energy exploration have increased over 700%. There are over 1.7 billion acres of government controlled areas offshore and another 700 million acres onshore, yet the government allows exploration and leasing of only 91 million acres, less than 4% of the total.
The fact of the matter is, unless we look, we'll never know.
Thursday, August 21, 2008
Iraqi Oil Production
Michael Makovsky at the Weekly Standard points out another benefit to the troop surge in Iraq: to note, a 500,000 barrel a day increase in Iraqi oil production - the same amount requested by the US government when pleading with the Saudis to increase their own production. The Iraqis are now back to their pre-war production levels of 2.5 million per day, with 80% of that destined for export. Even better, with just a little investment, the nation could produce quite a bit more - even more than the 3.5 million barrels a day it produced prior to the first Gulf War.
"Iraq has great potential as an oil producer and exporter. It is perhaps the least developed oil exporting country in the world with already the third largest proven oil reserves, and produced as much as 3.5 million barrels per day in 1990 before the Kuwait invasion, the Gulf war, and sanctions. Iraqis have long had plans to reach more than 6 million barrels per day of production, which could be achieved within a decade with security and foreign investment. But despite the obvious potential and recent progress, political factors in both the United States and Iraq continue to constrain Iraq's oil sector."
One obstacle has been the Iraqi govenment itself, given that the legislature has still not formulated an agreement over revenue sharing between the country's various factions, and a lack of expertise in the oil ministry. Another issue is meddling by the American government in the form of Senators John Kerry (D- Mass) and Charles Schumer (D-New York). They disingenously argue that without a revenue sharing arrangement, increased production will lead to more factional conflict in Iraq - even as production has increased with an ebb in factional conflict. They also object to Americna firms getting technical service deals in Iraq, (in their minds, this gives the appearance that we really did go to war in Iraq over oil) even though American pil firms are probably the best qualified to help increase production.
If Iraq were to increase their production another 500,000 barrels a day, it would represent a 20% increase in spare global oil prodcution capacity. I have to wonder what the impact of that would be at the pump.
"Iraq has great potential as an oil producer and exporter. It is perhaps the least developed oil exporting country in the world with already the third largest proven oil reserves, and produced as much as 3.5 million barrels per day in 1990 before the Kuwait invasion, the Gulf war, and sanctions. Iraqis have long had plans to reach more than 6 million barrels per day of production, which could be achieved within a decade with security and foreign investment. But despite the obvious potential and recent progress, political factors in both the United States and Iraq continue to constrain Iraq's oil sector."
One obstacle has been the Iraqi govenment itself, given that the legislature has still not formulated an agreement over revenue sharing between the country's various factions, and a lack of expertise in the oil ministry. Another issue is meddling by the American government in the form of Senators John Kerry (D- Mass) and Charles Schumer (D-New York). They disingenously argue that without a revenue sharing arrangement, increased production will lead to more factional conflict in Iraq - even as production has increased with an ebb in factional conflict. They also object to Americna firms getting technical service deals in Iraq, (in their minds, this gives the appearance that we really did go to war in Iraq over oil) even though American pil firms are probably the best qualified to help increase production.
If Iraq were to increase their production another 500,000 barrels a day, it would represent a 20% increase in spare global oil prodcution capacity. I have to wonder what the impact of that would be at the pump.
Friday, August 15, 2008
10 Years By Today's Rules
John Utley at Reason (HT:RCP) examines the mantra of the anti-drilling forces, which has been "it'll take 10 years" to get any oil out of the ground. In short this is due to the government making it that way due to exessive regulations and litigation by environmental groups.
"In July, CNN repeatedly reported that offshore drilling would take "seven to 10 years" to get into production. Yet Brazil's Petrobras expects its new finds in extraordinarily deep waters to already be producing 100,000 barrels per day in just two years. What is wrong with American oil companies that they would take so long?
In fact, the world oil shortage is political, not geological. In the U.S., the government prohibits drilling offshore."
Utley believes that ANWR in particular holds promise for developing in only 2-3 years - IF laws are changed to fast track leasing rights there and Minnesota Congresswoman Michelle Bachman's proposal (who I'm proud to say I contributed to in the 2006 elections) to create special "environmental courts" to expedite litigation is adopted. Under current rules, the actual drilling and production would take only two to three years, with a year or better for the environmental impact study, a year or two to actually sell the leases from the Dept. of the Interior, and double it all due to courtsuits for the "10 years". This also assumes the concurrent construction of the 75 mile pipeline from the area to the existing line located at Prudhoe Bay, doubtful under the current regime, but certainly possible if we have the fortitude to make the necessary changes in the system.
Utley also notes that France and China can build and put a new nuclear plant online in as little as two years as well. Meanwhile, the US continues to rely on foreign energy sources despite having plentiful resources to potentially develop and draw upon, including natural gas, coal liquification, gas hydrates, nuclear and oil shale, all of which are currently prohibited in most areas of the nation, in some cases (such as shale) the entire nation.
The best thing to come out of all of the pain we are experiencing at the pump is that people are finally waking up and beginning to ask the question - what the hell is wrong in Washington DC?
"In July, CNN repeatedly reported that offshore drilling would take "seven to 10 years" to get into production. Yet Brazil's Petrobras expects its new finds in extraordinarily deep waters to already be producing 100,000 barrels per day in just two years. What is wrong with American oil companies that they would take so long?
In fact, the world oil shortage is political, not geological. In the U.S., the government prohibits drilling offshore."
Utley believes that ANWR in particular holds promise for developing in only 2-3 years - IF laws are changed to fast track leasing rights there and Minnesota Congresswoman Michelle Bachman's proposal (who I'm proud to say I contributed to in the 2006 elections) to create special "environmental courts" to expedite litigation is adopted. Under current rules, the actual drilling and production would take only two to three years, with a year or better for the environmental impact study, a year or two to actually sell the leases from the Dept. of the Interior, and double it all due to courtsuits for the "10 years". This also assumes the concurrent construction of the 75 mile pipeline from the area to the existing line located at Prudhoe Bay, doubtful under the current regime, but certainly possible if we have the fortitude to make the necessary changes in the system.
Utley also notes that France and China can build and put a new nuclear plant online in as little as two years as well. Meanwhile, the US continues to rely on foreign energy sources despite having plentiful resources to potentially develop and draw upon, including natural gas, coal liquification, gas hydrates, nuclear and oil shale, all of which are currently prohibited in most areas of the nation, in some cases (such as shale) the entire nation.
The best thing to come out of all of the pain we are experiencing at the pump is that people are finally waking up and beginning to ask the question - what the hell is wrong in Washington DC?
Wednesday, August 13, 2008
Gold-Oil Price Linkage
John Tamny at Real Clear Markets examines the interesting relationship between the price of gold and petroleum. What is of interest to me is that the rise in prices in both commodities recently has been tied to a weak dollar. A strengthening dollar will go a long ways towards reducing the price of both commodities.
"Looked at over a longer timeframe, from 1970 to 1981 the price of gold rose 1,219 percent, versus a rise in the price of oil 1,291 percent. This wasn’t coincidental. With gold and oil both priced in dollars, and with gold serving as the best proxy for the latter’s value, a jump in the gold price neatly foretold the oil “shocks” of the 1970s that were merely dollar shocks.
Given the strong price correlations between the two commodities, many economic commentators wrote of the gold/oil relationship in terms of a 15/1 ounce/barrel ratio. As the late Warren Brookes wrote in his 1982 book, The Economy In Mind, “In 1970 an ounce of gold ($35) would buy 15 barrels OPEC oil ($2.30/bbl). In May 1981 an ounce of gold ($480) still bought 15 barrels of Saudi oil ($32/bbl)."
Another item of note is that when that 15/1 ratio gets out of whack, it's a good bet that the prices will eventually return around back to that ratio. The ratio was 7.3/1 yesterday, giving oil plenty of room the drop even further.
Nice.
"Looked at over a longer timeframe, from 1970 to 1981 the price of gold rose 1,219 percent, versus a rise in the price of oil 1,291 percent. This wasn’t coincidental. With gold and oil both priced in dollars, and with gold serving as the best proxy for the latter’s value, a jump in the gold price neatly foretold the oil “shocks” of the 1970s that were merely dollar shocks.
Given the strong price correlations between the two commodities, many economic commentators wrote of the gold/oil relationship in terms of a 15/1 ounce/barrel ratio. As the late Warren Brookes wrote in his 1982 book, The Economy In Mind, “In 1970 an ounce of gold ($35) would buy 15 barrels OPEC oil ($2.30/bbl). In May 1981 an ounce of gold ($480) still bought 15 barrels of Saudi oil ($32/bbl)."
Another item of note is that when that 15/1 ratio gets out of whack, it's a good bet that the prices will eventually return around back to that ratio. The ratio was 7.3/1 yesterday, giving oil plenty of room the drop even further.
Nice.
Wednesday, August 06, 2008
Terry Shows He's Serious on Energy
While I've been somewhat critical at times of local Congress critter Lee Terry (on earmarks in particular) he has shown some guts on pending (and hopelessly entangled) energy legislation and issues. From the Congressional record, a partial list of the 106 House members signing the latest in a series of discharge petitions which would force a vote on opening the Outer Continental Shelf to energy exploration and potential production. A House majority of 218 would be required to force the vote over the objections of House Speaker Nancy Pelosi (aka, the Wicked Witch of the West) of California.
I'll also note my guy Adrian Smith (I was a contributor to his campaign after noting he was being supported by the Club for Growth) was also quickly on board.
No Jeff Fortenberry (Mom's Congress critter) sightings yet, I may have to turn up the heat, although siccing Mom on the poor slob is a pretty mean thing to do to a guy on a five week vacation.
via the CR (HT to Amanda Carpenter at Townhall):
"Motion to Discharge a Committee from the Consideration of a resolution
July 30, 2008
To the Clerk of the House of Representatives:
Pursuant to clause 2 of rule XV, I, Jon C. Porter, move to discharge the Committee on Natural Resources, the Committee on Science and Technology, and the Committee on the Judiciary from the consideration of the bill (H.R. 6108) entitled, a bill to provide for exploration, development, and production activities for mineral resources on the outer Continental Shelf, and for other purposes; which was referred to said committees on May 21, 2008, in support of which motion the undersigned Members of the House of Representatives affix their signatures, to wit:
Wednesday, July 30, 2008
1. Jon C. Porter Nevada 03
2. Lee Terry Nebraska 02
3. Bob Goodlatte Virginia 06
4. Dennis R. Rehberg Montana 00
5. Robert E. Latta Ohio 05
6. John Shimkus Illinois 19
7. Marsha Blackburn Tennessee 07
8. John T. Doolittle California 04
9. Phil Gingrey Georgia 11
10. David Davis Tennessee 01
11. Michael T. McCaul Texas 10
12. Peter Hoekstra Michigan 02
13. Bill Sali Idaho 01
14. Mark E. Souder Indiana 03
15. Robert J. Wittman Virginia 01
16. Sue Wilkins Myrick North Carolina 09
17. Roy Blunt Missouri 07
18. Michael K. Simpson Idaho 02
19. Geoff Davis Kentucky 04
20. Mike Pence Indiana 06
21. Howard P. ``Buck'' McKeon California 25
22. Darrell E. Issa California 49
23. George Radanovich California 19
24. Dana Rohrabacher California 46
25. Don Young Alaska 00
26. Thaddeus G. McCotter Michigan 11
27. Adrian Smith Nebraska 03 "
These discharge petitions have gathered as many as 153 signatures so far, do what you can to raise the temperature on your own critter. There would be nothign nicer that I could think of than to give Mrs. Pelosi a nice welcome home gift when she returns to the District.
I'll also note my guy Adrian Smith (I was a contributor to his campaign after noting he was being supported by the Club for Growth) was also quickly on board.
No Jeff Fortenberry (Mom's Congress critter) sightings yet, I may have to turn up the heat, although siccing Mom on the poor slob is a pretty mean thing to do to a guy on a five week vacation.
via the CR (HT to Amanda Carpenter at Townhall):
"Motion to Discharge a Committee from the Consideration of a resolution
July 30, 2008
To the Clerk of the House of Representatives:
Pursuant to clause 2 of rule XV, I, Jon C. Porter, move to discharge the Committee on Natural Resources, the Committee on Science and Technology, and the Committee on the Judiciary from the consideration of the bill (H.R. 6108) entitled, a bill to provide for exploration, development, and production activities for mineral resources on the outer Continental Shelf, and for other purposes; which was referred to said committees on May 21, 2008, in support of which motion the undersigned Members of the House of Representatives affix their signatures, to wit:
Wednesday, July 30, 2008
1. Jon C. Porter Nevada 03
2. Lee Terry Nebraska 02
3. Bob Goodlatte Virginia 06
4. Dennis R. Rehberg Montana 00
5. Robert E. Latta Ohio 05
6. John Shimkus Illinois 19
7. Marsha Blackburn Tennessee 07
8. John T. Doolittle California 04
9. Phil Gingrey Georgia 11
10. David Davis Tennessee 01
11. Michael T. McCaul Texas 10
12. Peter Hoekstra Michigan 02
13. Bill Sali Idaho 01
14. Mark E. Souder Indiana 03
15. Robert J. Wittman Virginia 01
16. Sue Wilkins Myrick North Carolina 09
17. Roy Blunt Missouri 07
18. Michael K. Simpson Idaho 02
19. Geoff Davis Kentucky 04
20. Mike Pence Indiana 06
21. Howard P. ``Buck'' McKeon California 25
22. Darrell E. Issa California 49
23. George Radanovich California 19
24. Dana Rohrabacher California 46
25. Don Young Alaska 00
26. Thaddeus G. McCotter Michigan 11
27. Adrian Smith Nebraska 03 "
These discharge petitions have gathered as many as 153 signatures so far, do what you can to raise the temperature on your own critter. There would be nothign nicer that I could think of than to give Mrs. Pelosi a nice welcome home gift when she returns to the District.
Tuesday, August 05, 2008
Presidential Candidates and Energy
The NY Post editorial section properly takes the presidential candidates to task for their evolving positions on energy issues. However, they correctly point out that while Sen. McCain's position on offshore drilling has changed due to the facts on the ground (high gas prices), Sen. Obama's views have apparently changed due to more political factors. These changed positions include a call for releasing oil from the Strategic Oil Reserve (which is supposed to be for national emergencies, not to manipulate prices) AND now include being "open" to additional drilling if it is coupled with additional subsidies for alternative energy and higher mileage vehicles. He also still wants a windfall profits tax on large energy companies, which is counter productive and leads to higher consumer costs. The Post appears quite suspicious of the Illinois Senator's new views, and spells out the reasons for their skeptism.
"Obama, by contrast, still opposes drilling - but says he'll back it if it leads to a deal on legislation pushing fuel-efficient cars and alternative energy. Right. That might be believable if he hadn't also made popular turnabouts on many other issues, like NAFTA, the terror-monitoring bill and talking to Iran. Obama's new view on drilling, of course, is welcome; environmental concerns pale next to the need for more oil.
His switch on SPR oil, on the other hand, is not. The reserve is meant for national emergencies, not as a tool to ease prices - as even he once noted: "The reserve should only be used in the event of an emergency," he said, not "to provide a small, short-term decrease in gas prices." And he's U-turning on yet a third oil issue: He wants a windfall-profits tax on oil companies, even as he voted to give them breaks in '05. McCain voted against the breaks but is against hikes now....But here's the more important question: What does Obama stand for, besides whatever's popular at the moment?"
Indeed, this has been my question since mcuh earlier in the year. Perhaps due to this issue, Mac has pulled almost even with Obama (only a point or two down, well within the margin of error) in the latest Gallup and Rasmussen temperature checks, and McCain is ratcheting up the pressure on Congress by calling for both houses to return from vacation and address these issues. He is also handing out free tire pressure gauges for a $25 donation (see WSJ article here) after Obama suggested keeping your tires properly inflated as a means of saving energy - which is correct in a sense, but the math he spouted off on how much gasoline it would save was a bit off (he claimed it would save as much as we would ever get from drilling - not likely).
Meanwhile, the House Republican revolt led by Indiana Congressman Mike Pence and Georgian Tom Price Friday against the Wicked Witch of the West appears to be gathering some steam as well, with around twenty Congress critters meeting in the darkened halls of the District on Monday and more likely to join, as witnessed by Human Event's Jed Babbin, article here:
"The Republicans’ action began as a stunt on Friday and by Monday had evolved into a well-organized effort that might just succeed: if enough pressure were brought on Pelosi to force a vote on a comprehensive energy package, she might have to budge either by bringing Congress back in August (admittedly a very long-shot) or by holding a vote when the House reconvenes in September.
Republicans, as Hensarling said, define “comprehensive” as not “drill or, but drill and”, meaning that they would couple conservation measures with opening offshore drilling and on-land oil reserves such as the Colorado oil shale.
By Monday, Pence and Price had gotten about twenty fellow Republicans to come back for the new debate, and more were still being rounded up. As many as one hundred may be back by week’s end. If they are successful in building momentum this week, the debates will go on -- possibly -- all the way into September."
High energy prices and the Democratic leaderships intransigence on the issue may just be the road the Republicans need to turn things around come November.
"Obama, by contrast, still opposes drilling - but says he'll back it if it leads to a deal on legislation pushing fuel-efficient cars and alternative energy. Right. That might be believable if he hadn't also made popular turnabouts on many other issues, like NAFTA, the terror-monitoring bill and talking to Iran. Obama's new view on drilling, of course, is welcome; environmental concerns pale next to the need for more oil.
His switch on SPR oil, on the other hand, is not. The reserve is meant for national emergencies, not as a tool to ease prices - as even he once noted: "The reserve should only be used in the event of an emergency," he said, not "to provide a small, short-term decrease in gas prices." And he's U-turning on yet a third oil issue: He wants a windfall-profits tax on oil companies, even as he voted to give them breaks in '05. McCain voted against the breaks but is against hikes now....But here's the more important question: What does Obama stand for, besides whatever's popular at the moment?"
Indeed, this has been my question since mcuh earlier in the year. Perhaps due to this issue, Mac has pulled almost even with Obama (only a point or two down, well within the margin of error) in the latest Gallup and Rasmussen temperature checks, and McCain is ratcheting up the pressure on Congress by calling for both houses to return from vacation and address these issues. He is also handing out free tire pressure gauges for a $25 donation (see WSJ article here) after Obama suggested keeping your tires properly inflated as a means of saving energy - which is correct in a sense, but the math he spouted off on how much gasoline it would save was a bit off (he claimed it would save as much as we would ever get from drilling - not likely).
Meanwhile, the House Republican revolt led by Indiana Congressman Mike Pence and Georgian Tom Price Friday against the Wicked Witch of the West appears to be gathering some steam as well, with around twenty Congress critters meeting in the darkened halls of the District on Monday and more likely to join, as witnessed by Human Event's Jed Babbin, article here:
"The Republicans’ action began as a stunt on Friday and by Monday had evolved into a well-organized effort that might just succeed: if enough pressure were brought on Pelosi to force a vote on a comprehensive energy package, she might have to budge either by bringing Congress back in August (admittedly a very long-shot) or by holding a vote when the House reconvenes in September.
Republicans, as Hensarling said, define “comprehensive” as not “drill or, but drill and”, meaning that they would couple conservation measures with opening offshore drilling and on-land oil reserves such as the Colorado oil shale.
By Monday, Pence and Price had gotten about twenty fellow Republicans to come back for the new debate, and more were still being rounded up. As many as one hundred may be back by week’s end. If they are successful in building momentum this week, the debates will go on -- possibly -- all the way into September."
High energy prices and the Democratic leaderships intransigence on the issue may just be the road the Republicans need to turn things around come November.
Friday, August 01, 2008
Energy Issue & Congress
Conservative columnist Charles Krauthammer takes House Leader Nancy "I'm trying to save the planet" Pelosi (and the rest of the Democratic leadership) behind the woodshed in a devastatingly logical critique. The primary argument mustered against domestic oil exploration and production is for (largely symbolic) environmental reasons. However, by importing our energy supplies, aren't we effectively damaging the planet in a far more brutal manner? Venezuela, Nigeria, and the rest of OPEC nations have no where near the consciencious and enlightened environmental regulations and legal policy frameworks that have been so effectivley established by our esteemed Democratic rulers.
"The net environmental effect of Pelosi's no-drilling willfulness is negative. Outsourcing U.S. oil production does nothing to lessen worldwide environmental despoliation. It simply exports it to more corrupt, less efficient, more unstable parts of the world -- thereby increasing net planetary damage."
Adding to the damage is the fact that the world's "lungs" the tropical rainforest, is being burned down to plant sugarcane to make ethanol from crops and you really have the spectre of an planetary catastrophe, Nancy.
"The net environmental effect of Pelosi's no-drilling willfulness is negative. Outsourcing U.S. oil production does nothing to lessen worldwide environmental despoliation. It simply exports it to more corrupt, less efficient, more unstable parts of the world -- thereby increasing net planetary damage."
Adding to the damage is the fact that the world's "lungs" the tropical rainforest, is being burned down to plant sugarcane to make ethanol from crops and you really have the spectre of an planetary catastrophe, Nancy.
Thursday, July 24, 2008
Sham Arguments Against US Energy Production
Peter Ferrara covers some of the seriously flawed thinking preventing the US from producing its own energy at the American Spectator. While France safely generates around 80% of its electrical power from nuclear power, the US only generates around 20% - and has not built a new nuclear power plant in almost 20 years due to regulatory delays and litigation brought forth by environmental groups. The last oil refinery built in the US was in 1976. The industry has reacted to an increasing regulatory and litigation burden by simply expanding the capacity of current plants, but this has been met with an ever increasing obstinance from pressure groups.
"BP is constructing a $3.8 billion expansion of its already existing Whiting refinery in that state. But the National Resources Defense Council (NRDC) has now brought suit against BP seeking an injunction against the expansion, and fines of $32,500 for each day construction has been under way. The NRDC is urging the court to adopt a new interpretation of state law that would require BP to get a new state permit first because with the expansion the refinery would supposedly discharge more "pollution" than the current state permit allows. If the NRDC has found a liberal enough judge, it may get its way, to the great detriment of the rest of us."
The there is the drilling for oil issue. It's argued in may take up to ten years for new wells to produce oil to market and effect current prices, but this argument is specious in the extreme. Simply by lifting the executive ban on offshore drilling, the spot price of oil fell almost 14%. Oil executives have also indicated new wells could begin production in as little as a year and a half to four years, and tapped wells off the West Coast could be in production in as little as a few months. All this potential increase in supply would have an effect on current prices IMMEDIATELY.
Another argument against Arctic production is that such oil may wind up in Japan or China rather than the US, but again such objections fall flat. There is a world market (and price) for oil, and if such Alaskan production winds up in foreign locales, it simply means it is more efficient and less costly to ship there rather than here, and frees up other supplies nearer home (such as Mexico or South America) for US consumption. Any additional supply of oil causes a decrease in the world price of oil.
"BP is constructing a $3.8 billion expansion of its already existing Whiting refinery in that state. But the National Resources Defense Council (NRDC) has now brought suit against BP seeking an injunction against the expansion, and fines of $32,500 for each day construction has been under way. The NRDC is urging the court to adopt a new interpretation of state law that would require BP to get a new state permit first because with the expansion the refinery would supposedly discharge more "pollution" than the current state permit allows. If the NRDC has found a liberal enough judge, it may get its way, to the great detriment of the rest of us."
The there is the drilling for oil issue. It's argued in may take up to ten years for new wells to produce oil to market and effect current prices, but this argument is specious in the extreme. Simply by lifting the executive ban on offshore drilling, the spot price of oil fell almost 14%. Oil executives have also indicated new wells could begin production in as little as a year and a half to four years, and tapped wells off the West Coast could be in production in as little as a few months. All this potential increase in supply would have an effect on current prices IMMEDIATELY.
Another argument against Arctic production is that such oil may wind up in Japan or China rather than the US, but again such objections fall flat. There is a world market (and price) for oil, and if such Alaskan production winds up in foreign locales, it simply means it is more efficient and less costly to ship there rather than here, and frees up other supplies nearer home (such as Mexico or South America) for US consumption. Any additional supply of oil causes a decrease in the world price of oil.
House Tries to Move Energy Legislation
Michael Franc over at NRO has a good piece on how a number of Congressional House members are taking action after beginning to feel the heat from their constituents over gas prices. A small but growing rebellion is underway against the wicked witch, Majority Leader Nancy Pelosi. House Republicans are attempting to execute a discharge petition on pro-drilling energy legislation, but need to pick up some of the more conservative Democrats' votes in the process. Franc explains the strategy:
"A discharge petition is a procedural way for disgruntled members to release a bill from legislative limbo and force the entire House to consider it. Should a majority of members (218) sign one, the legislation in question is “discharged” from the committee of jurisdiction and brought immediately to the floor, debated, and voted on. Short of actual floor votes, signing a discharge petition is the most powerful (and potentially meaningful) tool available to a besieged legislative minority.
Not surprisingly, discharge petitions rarely attract the required 218 signatures. House speakers and majority leaders view them the same way vampires view crosses. When members of the majority party sign one, it’s viewed as an act of betrayal worthy of harsh disciplinary measures and a guaranteed end to that member’s advancement in the House.
Quietly, in recent weeks House Republican leaders have adopted precisely this strategy. Rank-and-file Republicans have been filing one discharge petition per week (five thus far), demanding floor action on a far-reaching energy agenda."
The movement has attracted as many as 153 (including one Democratic) vote, with as many as 75-100 more members possible. This count has been tabulated by including members that have publicly supported more energy exploraiton legislation in the past, including as many as 40 Democrats. Let's hope at least one of these efforts succeeeds soon. At stake is an agenda that includes drilling in the ANWR, offshore, constructing new oil refinieries, and opening up unconventional oil sources such as oil shale and coal liquification.
"A discharge petition is a procedural way for disgruntled members to release a bill from legislative limbo and force the entire House to consider it. Should a majority of members (218) sign one, the legislation in question is “discharged” from the committee of jurisdiction and brought immediately to the floor, debated, and voted on. Short of actual floor votes, signing a discharge petition is the most powerful (and potentially meaningful) tool available to a besieged legislative minority.
Not surprisingly, discharge petitions rarely attract the required 218 signatures. House speakers and majority leaders view them the same way vampires view crosses. When members of the majority party sign one, it’s viewed as an act of betrayal worthy of harsh disciplinary measures and a guaranteed end to that member’s advancement in the House.
Quietly, in recent weeks House Republican leaders have adopted precisely this strategy. Rank-and-file Republicans have been filing one discharge petition per week (five thus far), demanding floor action on a far-reaching energy agenda."
The movement has attracted as many as 153 (including one Democratic) vote, with as many as 75-100 more members possible. This count has been tabulated by including members that have publicly supported more energy exploraiton legislation in the past, including as many as 40 Democrats. Let's hope at least one of these efforts succeeeds soon. At stake is an agenda that includes drilling in the ANWR, offshore, constructing new oil refinieries, and opening up unconventional oil sources such as oil shale and coal liquification.
Friday, July 18, 2008
ANWR
Great article at the American Spectator outlining a Congressional field trip to the Arctic National Wildlife Refuge, or ANWR. The environmental lobby has sucessfully prevented oil extraction in the ANWR for over 30 years, most notably by arguing that the area's a beautiful pristine mountain wilderness and that oil production would harm native wildlife such as the caribou herds. However, the ANWR is a huge tract of land, and while beautiful mountains make up quite a bit of it, the section known as 10-02, where oil extraction has been proposed, is NOT one of them. Instead, this area is a swampy tundra on the northern coastal plain abutting the Arctic Ocean.
"At about 19.5 million acres, ANWR is the size of the state of South Carolina. Located in Alaska's northeast corner and stretching from that state's northern coast along the frigid Arctic Ocean to two hundred miles south, ANWR includes a broad spectrum of Alaskan wilderness. The spectacular geography of the southern three-quarters of ANWR is offset by the flat, barren and desolate northern slope along the coast. The two contrasting landscapes are separated by the Brooks Mountain Range running east and west. The section of ANWR known as Area 10-02 is about 1.2 million acres in size and includes a sliver of about 2,000 acres identified for oil extraction."
But I digress, the article goes on to note the 7 Congress critters that went to Alaska and visited not only the ANWR, but Prudhoe Bay, where 750,000 barrels of oil a day is still being produced, and found the area being utilized in a very careful and well thought out manner, with no serious environmental impact. They also visited the locals, and found them extremely in favor of further drilling, as is the State's Governor Sarah Palin.
So why aren't we drilling and producing oil from 10-02 - oh yeah, Bill Clinton vetoed the idea in 1996.
"At about 19.5 million acres, ANWR is the size of the state of South Carolina. Located in Alaska's northeast corner and stretching from that state's northern coast along the frigid Arctic Ocean to two hundred miles south, ANWR includes a broad spectrum of Alaskan wilderness. The spectacular geography of the southern three-quarters of ANWR is offset by the flat, barren and desolate northern slope along the coast. The two contrasting landscapes are separated by the Brooks Mountain Range running east and west. The section of ANWR known as Area 10-02 is about 1.2 million acres in size and includes a sliver of about 2,000 acres identified for oil extraction."
But I digress, the article goes on to note the 7 Congress critters that went to Alaska and visited not only the ANWR, but Prudhoe Bay, where 750,000 barrels of oil a day is still being produced, and found the area being utilized in a very careful and well thought out manner, with no serious environmental impact. They also visited the locals, and found them extremely in favor of further drilling, as is the State's Governor Sarah Palin.
So why aren't we drilling and producing oil from 10-02 - oh yeah, Bill Clinton vetoed the idea in 1996.
Friday, July 11, 2008
How Greens Captured US Energy policy
JR Dunn at The American Thinker has a run down on the way the environmental movement has hamstrung US energy policy since the 1960s, succeeding in ways most political pressure groups do not. The catalyst for the movement was the 1969 Santa Barbara oil platform spill, which left a sizable chunk (35 miles0 of California coastline mired in petroleum. Left unsaid by most environmental groups is that the culprit was that the US Geological survey had allowed the platform owner to ignore mandated construction regulations.
"The public rallied to save the wildlife with some success. Environmentalists rallied alongside them. Within days, an anti-oil activist group, GOO (Get Oil Out) was in operation, calling for boycotts and circulating petitions to end offshore drilling. Ignored in all the uproar was the fact that Union Oil had been allowed to skimp on heavy-duty protective sheathing by the U.S. Geological Survey. If the piping had been reinforced as called for by standard procedure, the rupture might not have occurred, or might well have been contained."
As a result, most offshore drilling was banned over the next 10 years, just as the first 'gas shortage' devloped due to the Iranian hostage crisis. Then the Exxon Valdez incident occured in 1989 where a drunken captain ran an oil tanker aground dumping 11 million gallons of crude into the Gulf of Alaska, confirming the "oil is evil" tautology.
As if this wasn't enough, the Three Mile Island incident, where no radiactivite materials were released took nuclear energy off the table - no new reactors have been built in the Us for over 30 years. Adding insult to injury, this was followed by the much more serious Chernobyl incident in the Soviet Ukraine (note for the record that the Chernobyl reactor design would NEVER had been licensed in the US!).
As Dunn puts it:
"The appropriate response in these cases (Chernobyl being the exception: the only solution there was to tear the system down and start over) would have been to convene a panel of experts, send out investigators, hold hearings, issue recommendations, and see to it that reforms went into effect. This is what occurs following aircraft disasters, large-scale fires, building collapses, or any other catastrophic incident where suspicion exists that things were not being handled according to best practice. (Consider the investigation following the Challenger disaster, for one example.)
But this is not what occurred in these cases. Not in any meaningful sense. Under the new Green paradigm, oil and nuclear energy were not industries to be reformed, but "evils" to be either contained or destroyed. The Greens could have served a useful purpose by pushing for serious reform in management of critical energy industries. Instead, we got the religious impulse, distorted into sheer apocalypticism, with the environmentalists fighting oil and fissionables (plutonium in particular) as products of dark sin, placed on earth to tempt humankind from the path that Gaia intended."
"The public rallied to save the wildlife with some success. Environmentalists rallied alongside them. Within days, an anti-oil activist group, GOO (Get Oil Out) was in operation, calling for boycotts and circulating petitions to end offshore drilling. Ignored in all the uproar was the fact that Union Oil had been allowed to skimp on heavy-duty protective sheathing by the U.S. Geological Survey. If the piping had been reinforced as called for by standard procedure, the rupture might not have occurred, or might well have been contained."
As a result, most offshore drilling was banned over the next 10 years, just as the first 'gas shortage' devloped due to the Iranian hostage crisis. Then the Exxon Valdez incident occured in 1989 where a drunken captain ran an oil tanker aground dumping 11 million gallons of crude into the Gulf of Alaska, confirming the "oil is evil" tautology.
As if this wasn't enough, the Three Mile Island incident, where no radiactivite materials were released took nuclear energy off the table - no new reactors have been built in the Us for over 30 years. Adding insult to injury, this was followed by the much more serious Chernobyl incident in the Soviet Ukraine (note for the record that the Chernobyl reactor design would NEVER had been licensed in the US!).
As Dunn puts it:
"The appropriate response in these cases (Chernobyl being the exception: the only solution there was to tear the system down and start over) would have been to convene a panel of experts, send out investigators, hold hearings, issue recommendations, and see to it that reforms went into effect. This is what occurs following aircraft disasters, large-scale fires, building collapses, or any other catastrophic incident where suspicion exists that things were not being handled according to best practice. (Consider the investigation following the Challenger disaster, for one example.)
But this is not what occurred in these cases. Not in any meaningful sense. Under the new Green paradigm, oil and nuclear energy were not industries to be reformed, but "evils" to be either contained or destroyed. The Greens could have served a useful purpose by pushing for serious reform in management of critical energy industries. Instead, we got the religious impulse, distorted into sheer apocalypticism, with the environmentalists fighting oil and fissionables (plutonium in particular) as products of dark sin, placed on earth to tempt humankind from the path that Gaia intended."
Monday, June 30, 2008
Suadis Ready Plans to Boost Oil Output
via MSNBC, the world's leading oil exporter is working feverishly to ramp up production in its few remaining large untapped oil fields. Saudi Arabia is referring these production increases as the largest expansion of production in history, and if they bear out as expected, they could go a long way toward giving the globe additional breathing space to develop alternatives to the sticky black gold. Unlike most of their existing fields located in the northeastern corner of the nation, these fields are located west of the Suadi capital, Riyadh.
"Saudi Arabia's state-owned oil company, Aramco, is spending $10 billion to build the infrastructure to pump 1.2 million barrels of oil per day by next June from the Khurais field and its two smaller neighbors. That alone would be more than the total individual production of OPEC members Qatar, Indonesia and Ecuador.
The project forms the centerpiece of the Saudi plan to increase the total amount of oil it can produce to 12.5 million barrels per day by the end of 2009 — up from a little more than 11 million barrels per day now."
While there are technical hurdles to producing in this area, including the searing 100 degree heat and the need to pump in as much as 2 million gallons of seawater into the rock formaitons to maintain well pressure into the 5,000 foot deep oil strata, the Saudis believe they will be able to pump as much as 1.2 million barrels a day by next June. In addition, they expect production of up to 500,000 barrels a day from another new field located at Khursaniyah in August of this year, although this field had been expceted to go online at the end of 2007 but ran into equipment and labor shortages. They are also developing their last large oil formation in the Persian Gulf at Manifa.
Now if the morons we've elected to Congress would allow more drilling here at home, maybe we wouldn't be paying $4 a gallon for freaking the stuff the runs (for better or worse) our entire transportation industry. Still, some encouraging news on the subject is better than continued doom and gloom.
"Saudi Arabia's state-owned oil company, Aramco, is spending $10 billion to build the infrastructure to pump 1.2 million barrels of oil per day by next June from the Khurais field and its two smaller neighbors. That alone would be more than the total individual production of OPEC members Qatar, Indonesia and Ecuador.
The project forms the centerpiece of the Saudi plan to increase the total amount of oil it can produce to 12.5 million barrels per day by the end of 2009 — up from a little more than 11 million barrels per day now."
While there are technical hurdles to producing in this area, including the searing 100 degree heat and the need to pump in as much as 2 million gallons of seawater into the rock formaitons to maintain well pressure into the 5,000 foot deep oil strata, the Saudis believe they will be able to pump as much as 1.2 million barrels a day by next June. In addition, they expect production of up to 500,000 barrels a day from another new field located at Khursaniyah in August of this year, although this field had been expceted to go online at the end of 2007 but ran into equipment and labor shortages. They are also developing their last large oil formation in the Persian Gulf at Manifa.
Now if the morons we've elected to Congress would allow more drilling here at home, maybe we wouldn't be paying $4 a gallon for freaking the stuff the runs (for better or worse) our entire transportation industry. Still, some encouraging news on the subject is better than continued doom and gloom.
Thursday, June 05, 2008
Will on Oil Prices
While not one of my favorite columnists, George Will is pretty popular as conservative writers go. In his latest effort, he points out the hypocritical nature of Senators such as Charles Schumer of New York (D) demanding the Saudis pump 1 million more barrels of oil to lower prices when our idiot Congress has put most of the Outer Continental shelf, the Alaskan Arctic Wildlife Refuge, and 85% of all Federal land onshore off limits from even being explored for oil.
"One million barrels is what might today be flowing from ANWR if in 1995 President Clinton had not vetoed legislation to permit drilling there. One million barrels produce 27 million gallons of gasoline and diesel fuel. Seventy-two of today's senators -- including Schumer, of course, and 38 other Democrats, including Barack Obama, and 33 Republicans, including John McCain -- have voted to keep ANWR's estimated 10.4 billion barrels of oil off the market.
So Schumer, according to Schumer, is complicit in taking $10 away from every American who buys 20 gallons of gasoline. "Democracy," said H.L. Mencken, "is the theory that the common people know what they want and deserve to get it good and hard." The common people of New York want Schumer to be their senator, so they should pipe down about gasoline prices, which are a predictable consequence of their political choice.
Also disqualified from complaining are all voters who sent to Washington senators and representatives who have voted to keep ANWR's oil in the ground, and who voted to put 85 percent of America's offshore territory off-limits to drilling. The U.S. Minerals Management Service says that restricted area contains perhaps 86 billion barrels of oil and 420 trillion cubic feet of natural gas -- 10 times the oil and 20 times the natural gas Americans use in a year. Drilling is under way 60 miles off Florida. The drilling is being done by China, in cooperation with Cuba, which is drilling closer to South Florida than U.S. companies are."
He also points out the ANWR consists of a land area larger than five states and the proposed oil drilling area consists of a 1000 acre area the size of a small airport, and that there have been no major oil spills from produciton facilities in the country since 1969. Lousinana, with 3200 off shore oil rigs, is also home to a thriving commercial fishing industry that depends on part on the artificial reefs created by the very same platforms.
Pretty amazing, isn't it?
"One million barrels is what might today be flowing from ANWR if in 1995 President Clinton had not vetoed legislation to permit drilling there. One million barrels produce 27 million gallons of gasoline and diesel fuel. Seventy-two of today's senators -- including Schumer, of course, and 38 other Democrats, including Barack Obama, and 33 Republicans, including John McCain -- have voted to keep ANWR's estimated 10.4 billion barrels of oil off the market.
So Schumer, according to Schumer, is complicit in taking $10 away from every American who buys 20 gallons of gasoline. "Democracy," said H.L. Mencken, "is the theory that the common people know what they want and deserve to get it good and hard." The common people of New York want Schumer to be their senator, so they should pipe down about gasoline prices, which are a predictable consequence of their political choice.
Also disqualified from complaining are all voters who sent to Washington senators and representatives who have voted to keep ANWR's oil in the ground, and who voted to put 85 percent of America's offshore territory off-limits to drilling. The U.S. Minerals Management Service says that restricted area contains perhaps 86 billion barrels of oil and 420 trillion cubic feet of natural gas -- 10 times the oil and 20 times the natural gas Americans use in a year. Drilling is under way 60 miles off Florida. The drilling is being done by China, in cooperation with Cuba, which is drilling closer to South Florida than U.S. companies are."
He also points out the ANWR consists of a land area larger than five states and the proposed oil drilling area consists of a 1000 acre area the size of a small airport, and that there have been no major oil spills from produciton facilities in the country since 1969. Lousinana, with 3200 off shore oil rigs, is also home to a thriving commercial fishing industry that depends on part on the artificial reefs created by the very same platforms.
Pretty amazing, isn't it?
Wednesday, April 30, 2008
Start Drilling Already!
Robert Samuelson at Newsweek (via RCP) says we need to start drilling - now. If we had done this 10-20 years ago, we wouldn't be in nearly the mess we find ourselves today. Most people would be surprised to learn the US is still the third leading oil producer in the world. However, large tracts of potentially available domestic resources, such the the ANWR, are off-limits - largely due to the environmental lobby. The off-limit areas could as much as double US reserves, currently believed to be around 30 billion barrels of oil and 80 trillion feet of natural gas. Why are prices reaching such stratospheric levels?
"The basic cause of exploding prices is that advancing demand has virtually exhausted the world's surplus production capacity, says analyst Douglas MacIntyre of the Energy Information Administration. The result: Any unexpected rise in demand or threat to supply triggers higher prices.
The best we can do is to try to influence the global balance of supply and demand. Increase our supply. Restrain our demand. With luck, this might widen the worldwide surplus of production capacity. Producers would have less power to exact ever-higher prices, because there would be more competition among them to sell."
Another issue is that foreign governments, who aren't terrribly interested in increasing supplies, control over 3/4 of global reserves. While Congressional morons complain about the profits of private oil companies, they then turn around and prevent them from exploring and investing in domestic production.
Investor's Business Daily wieghs in with an editorial (again, thanks to RCP) here. They also point out that US refining capacity, usually running at over 90%, has not been increased with any new facilities since 1976 (they do not mention that existing plants have expanded in that time, however).
There has also been an effective moratorium of the construction of new nuclear power plants, which provide around 20% of our electricity needs - while European nations such as France generate nearly 40% of their needs. while they are expensive, at $3 billion a pop, the electricity they produce ($1.72 per kw/hour)is much cheaper than coal ($2.37) or natural gas ($6.35)plant alternatives.
Added to all that are the threats to increase taxes and the regulatory burden to energy companies, and you have the current recipe for high prices.
"The basic cause of exploding prices is that advancing demand has virtually exhausted the world's surplus production capacity, says analyst Douglas MacIntyre of the Energy Information Administration. The result: Any unexpected rise in demand or threat to supply triggers higher prices.
The best we can do is to try to influence the global balance of supply and demand. Increase our supply. Restrain our demand. With luck, this might widen the worldwide surplus of production capacity. Producers would have less power to exact ever-higher prices, because there would be more competition among them to sell."
Another issue is that foreign governments, who aren't terrribly interested in increasing supplies, control over 3/4 of global reserves. While Congressional morons complain about the profits of private oil companies, they then turn around and prevent them from exploring and investing in domestic production.
Investor's Business Daily wieghs in with an editorial (again, thanks to RCP) here. They also point out that US refining capacity, usually running at over 90%, has not been increased with any new facilities since 1976 (they do not mention that existing plants have expanded in that time, however).
There has also been an effective moratorium of the construction of new nuclear power plants, which provide around 20% of our electricity needs - while European nations such as France generate nearly 40% of their needs. while they are expensive, at $3 billion a pop, the electricity they produce ($1.72 per kw/hour)is much cheaper than coal ($2.37) or natural gas ($6.35)plant alternatives.
Added to all that are the threats to increase taxes and the regulatory burden to energy companies, and you have the current recipe for high prices.
Wednesday, March 05, 2008
Peak Oil Revisited
The Wall St. Journal has an interesting op-ed by Nansen Saleri disputing the "Peak Oil" myth. Fundamentally, he points out that the theory is seriously flawed due to the inherent difficulties in forecasting the four questionable assumptions for which the theory has to define answers.
"The trivial becomes far more complex because the four factors -- resources in place (how many barrels initially underground), recovery efficiency (what percentage is ultimately recoverable), rate of consumption, and state of depletion at peak (how empty is the global tank when decline kicks in) -- are inherently uncertain."
Despite short-term price fluctuations brought on by speculative market forces, (primarily due to political factors rather than supply issues) there are not only huge reserves available, we are drastically improving our ability to recover them, as well as develop new unconventional sources. In fact, the price fluctuations are greatly assisting our ability to do so, giving national oil firms in particular both the incentive and the ability to make technological improvements to improve recovery methods.
Saleri correctly states that we've used around 1 trillion barrels of oil - out of around 12 to 16 trillion barrels of total supply (about half conventional, half not). In addition, the traditional figure of recoverable petroleum from a given well of 33 percent is steadily improving as new technological methods are being brought to bear, and may eventually double. Increasing the amount of recoverable oil even 10% would result in an additional 50 years of supply at current consumption levels. Doing the math, even without a increase in recoverable conventional supplies, we're used only about a quarter to a sixth of recoverable conventional supplies.
This brings the question of how much oil will we need over the coming years. Current consumption is 86 million barrels per day, with consumption forcasts increasing this figure up to 2% per year, leading to a figure of up to 117 million barrels in the next decade. In the event of any economic slowdown, this figure would likely be much less. "Peak Oil" theory holds that the tipping point will occur when 50% of the recoverable oil has been consumed, but with modern extraction methods, this figure is likely to reach a higher figure - and even a 5% increase in total recovery would delay the onset of the "panic" by 20-25 years.
All of this is not to say that research work on alternative sources of energy is misguided or ill founded, simply that the pessimism and alarmism found in some quarters is certainly not justified - at least not at present. Much like the almost crazed religious obesssion in the global warming debate (and I'm fairly certain there is a large degree of overlap between the two schools) the "Peak Oilers" are simply convinced that the end of civilization is coming soon. In my view, a gradual transistion from petroleum will almost certainly take place over the coming century for a variety of technical and other factors, and I'm quite optimistic the forces of civilization and innovation will almost certainly save us from the "impending catastrophe".
"The trivial becomes far more complex because the four factors -- resources in place (how many barrels initially underground), recovery efficiency (what percentage is ultimately recoverable), rate of consumption, and state of depletion at peak (how empty is the global tank when decline kicks in) -- are inherently uncertain."
Despite short-term price fluctuations brought on by speculative market forces, (primarily due to political factors rather than supply issues) there are not only huge reserves available, we are drastically improving our ability to recover them, as well as develop new unconventional sources. In fact, the price fluctuations are greatly assisting our ability to do so, giving national oil firms in particular both the incentive and the ability to make technological improvements to improve recovery methods.
Saleri correctly states that we've used around 1 trillion barrels of oil - out of around 12 to 16 trillion barrels of total supply (about half conventional, half not). In addition, the traditional figure of recoverable petroleum from a given well of 33 percent is steadily improving as new technological methods are being brought to bear, and may eventually double. Increasing the amount of recoverable oil even 10% would result in an additional 50 years of supply at current consumption levels. Doing the math, even without a increase in recoverable conventional supplies, we're used only about a quarter to a sixth of recoverable conventional supplies.
This brings the question of how much oil will we need over the coming years. Current consumption is 86 million barrels per day, with consumption forcasts increasing this figure up to 2% per year, leading to a figure of up to 117 million barrels in the next decade. In the event of any economic slowdown, this figure would likely be much less. "Peak Oil" theory holds that the tipping point will occur when 50% of the recoverable oil has been consumed, but with modern extraction methods, this figure is likely to reach a higher figure - and even a 5% increase in total recovery would delay the onset of the "panic" by 20-25 years.
All of this is not to say that research work on alternative sources of energy is misguided or ill founded, simply that the pessimism and alarmism found in some quarters is certainly not justified - at least not at present. Much like the almost crazed religious obesssion in the global warming debate (and I'm fairly certain there is a large degree of overlap between the two schools) the "Peak Oilers" are simply convinced that the end of civilization is coming soon. In my view, a gradual transistion from petroleum will almost certainly take place over the coming century for a variety of technical and other factors, and I'm quite optimistic the forces of civilization and innovation will almost certainly save us from the "impending catastrophe".
Friday, November 30, 2007
Breakthrough in Heavy Oil Recovery
via ScienceDaily, the story of a fantastic new method of recovering previously difficult (and expensive) to extract heavy oil deposits. This new method, developed in Britain, has been in the works for almost 17 years, with the necessary breakthroughs occuring just in the last 18 months. Called THAI (Toe to Heel Air Injection), it utilizes the injection of air into the ground and then igniting it, heating the material and allowing the oil to be recovered more easily. The method not only uses less energy than previous methods using natural gas and water, it also expands the percentage of oil recoverable from the field.
"THAI™ uses a system where air is injected into the oil deposit down a vertical well and is ignited. The heat generated in the reservoir reduces the viscosity of the heavy oil, allowing it to drain into a second, horizontal well from where it rises to the surface. THAI™ is very efficient, recovering about 70 to 80 per cent of the oil, compared to only 10 to 40 per cent using other technologies."
The exciting prospect behind this is that there is far more of this more difficult to extract oil in areas such as Canada than there is of the usual "light" oil in the entire Arabian penninsula. The process is already being used in a Canadian test site on bitumen deposits (even harder to produce from than oil shale or tar sands) is producing 3,000 barrels a day, and this is expected to more than triple in capacity soon, with the potential to grow as high as 100,000 barrels daily. The bitumen at this particular site alone holds as many as 2.6 billion barrels of oil. The other amazing item is that the THAI system is economical at prices as low as $10 a barrel.
With oil prices currently almost $100 a barrel, and these deposits available in more politically stable locations, this new extraction method promises to help us bridge the gap until better energy alternatives (like hydrogen) become available.
"THAI™ uses a system where air is injected into the oil deposit down a vertical well and is ignited. The heat generated in the reservoir reduces the viscosity of the heavy oil, allowing it to drain into a second, horizontal well from where it rises to the surface. THAI™ is very efficient, recovering about 70 to 80 per cent of the oil, compared to only 10 to 40 per cent using other technologies."
The exciting prospect behind this is that there is far more of this more difficult to extract oil in areas such as Canada than there is of the usual "light" oil in the entire Arabian penninsula. The process is already being used in a Canadian test site on bitumen deposits (even harder to produce from than oil shale or tar sands) is producing 3,000 barrels a day, and this is expected to more than triple in capacity soon, with the potential to grow as high as 100,000 barrels daily. The bitumen at this particular site alone holds as many as 2.6 billion barrels of oil. The other amazing item is that the THAI system is economical at prices as low as $10 a barrel.
With oil prices currently almost $100 a barrel, and these deposits available in more politically stable locations, this new extraction method promises to help us bridge the gap until better energy alternatives (like hydrogen) become available.
Tuesday, March 06, 2007
Tech key to Recovery Old Oil
As if to further make my earlier point about oil production, the OWH helpfully chimes in.
"Within the last decade, technology advances have made it possible to unlock more oil from old fields. At the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach.With plenty of oil still left in familiar locations, forecasts that the world's reserves are drying out have given way to predictions that more oil can be found than ever before."
And yes, the Peak Oilers are finding it hard to convince anyone serious that their pet theory is correct.
"There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading."
Again, as oil prices go up, it becomes feasible to go back into old fields and resume production, as well as explore and produce in difficult terrain. Approximately two-thirds of the oil in older fields has been left remianing in the ground, as it was formerly unprofitable to go to great lenghts to recover it. It also becomes feasible to start producing from deposits like Canadian tar sands.
"Typically, oil companies can produce only one barrel for every three they find. Two usually are left behind, either because they are too hard to pump out or because it would be too expensive to do so. Going after these neglected resources, energy experts say, represents a tremendous opportunity."
The head of reserve management at Saudi Aramco (Saudi Arabia's national oil company) is also noted as saying that the kingdom's true reserves are triple the "recoverable" figure of 260 million barrels, the largest on paper reserves in the world, and that new seismic tools greatly aid in both exploration and energy production.
"Within the last decade, technology advances have made it possible to unlock more oil from old fields. At the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach.With plenty of oil still left in familiar locations, forecasts that the world's reserves are drying out have given way to predictions that more oil can be found than ever before."
And yes, the Peak Oilers are finding it hard to convince anyone serious that their pet theory is correct.
"There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading."
Again, as oil prices go up, it becomes feasible to go back into old fields and resume production, as well as explore and produce in difficult terrain. Approximately two-thirds of the oil in older fields has been left remianing in the ground, as it was formerly unprofitable to go to great lenghts to recover it. It also becomes feasible to start producing from deposits like Canadian tar sands.
"Typically, oil companies can produce only one barrel for every three they find. Two usually are left behind, either because they are too hard to pump out or because it would be too expensive to do so. Going after these neglected resources, energy experts say, represents a tremendous opportunity."
The head of reserve management at Saudi Aramco (Saudi Arabia's national oil company) is also noted as saying that the kingdom's true reserves are triple the "recoverable" figure of 260 million barrels, the largest on paper reserves in the world, and that new seismic tools greatly aid in both exploration and energy production.
Friday, February 23, 2007
Peak Oil
Vaclav Smil @ TCS takes on the peak oil myth.
Peak oil theory is the theory that the production of recoverable oil deposits will hit a high point at some point, then production will rapidly diminish with consequent diasaster to civilization. Obviously, the environmental lobby loves the idea. Personally, I've been researching global oil produciton for a while now to see if there is any evidence of declining production for a couple of years now, and haven't seen anything yet. But of course, evidence to the contrary just makes the true believers postpone the date of the supposed apocalypse.
"Well, the numbers for 2006 are in. And they show that even after OPEC once again cut its production (by 1.2 million barrels a day effective November 1, 2006) in order to arrest yet another rapid fall in prices, the global oil supply for the entire year rose once again, by about 0.85 million barrels a day. That is about 42 million metric tons a year, or more than the annual output of Oman or nearly twice the annual extraction in Azerbaijan, a major oil power on the Caspian Sea. But once we take into account the need to replace worldwide reserve depletion (currently amounting to more than one million barrels a day) this means that some 2 million barrels of new oil found their way on the global market, an equivalent of adding a bit more than UK's entire North Sea production or Iraq's annual extraction."
Proponents of the theory point to the work of their patron saint, geophysicist Dr. M. King Hubbert, who we are told predicted the high point of US oil production from the lower 48 states at around 1970, but Smil examines his work pretty closely and finds a few issues with it. for example, actual US peak production was over a half a billion barrels over the prediction peak, in 1970. He also expected the decline in production to a symmetrical curve of the increases, and his expected US production of 1.2 billion barrels in 2000 was actually 2.8 billion barrels.
To make a long story short, that amazing marketplace indicator, the price level, has raised and lowered oil prices, adjusting both global supply and global demand far from Hubbert's projected levels. Of course, as the price level for oil rises, demand goes down, and both technological innovation and further exploration take place, allowing for the profitable exploitation of alternate supplies (like oil shale), more difficult to reach areas (like deep water wells in the Gulf of Mexico), as well as the possibility of opening formerly unprofitable old wells.
Peak oil theory is the theory that the production of recoverable oil deposits will hit a high point at some point, then production will rapidly diminish with consequent diasaster to civilization. Obviously, the environmental lobby loves the idea. Personally, I've been researching global oil produciton for a while now to see if there is any evidence of declining production for a couple of years now, and haven't seen anything yet. But of course, evidence to the contrary just makes the true believers postpone the date of the supposed apocalypse.
"Well, the numbers for 2006 are in. And they show that even after OPEC once again cut its production (by 1.2 million barrels a day effective November 1, 2006) in order to arrest yet another rapid fall in prices, the global oil supply for the entire year rose once again, by about 0.85 million barrels a day. That is about 42 million metric tons a year, or more than the annual output of Oman or nearly twice the annual extraction in Azerbaijan, a major oil power on the Caspian Sea. But once we take into account the need to replace worldwide reserve depletion (currently amounting to more than one million barrels a day) this means that some 2 million barrels of new oil found their way on the global market, an equivalent of adding a bit more than UK's entire North Sea production or Iraq's annual extraction."
Proponents of the theory point to the work of their patron saint, geophysicist Dr. M. King Hubbert, who we are told predicted the high point of US oil production from the lower 48 states at around 1970, but Smil examines his work pretty closely and finds a few issues with it. for example, actual US peak production was over a half a billion barrels over the prediction peak, in 1970. He also expected the decline in production to a symmetrical curve of the increases, and his expected US production of 1.2 billion barrels in 2000 was actually 2.8 billion barrels.
To make a long story short, that amazing marketplace indicator, the price level, has raised and lowered oil prices, adjusting both global supply and global demand far from Hubbert's projected levels. Of course, as the price level for oil rises, demand goes down, and both technological innovation and further exploration take place, allowing for the profitable exploitation of alternate supplies (like oil shale), more difficult to reach areas (like deep water wells in the Gulf of Mexico), as well as the possibility of opening formerly unprofitable old wells.
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