The Big Oil Drilling Swindle!

You are being lied to....again.

:shk:

Bush calls on Congress to lift offshore drilling ban

US President George W. Bush on Wednesday urged Congress to lift a decades-old ban on offshore oil drilling to reduce dependence on foreign imports and offset sky-high energy prices.

Calling the federal ban "outdated and counterproductive," Bush asked the Democratic-controlled Congress to take action to expand access to the nation's Outer Continental Shelf.

"Congress must face a hard reality. Unless members are willing to accept gas prices at today's painful levels or even higher, our nation must produce more oil, and we must start now," Bush said in a news conference in the White House Rose Garden.

More...

Really?

ISSUE #1: Has anyone told you about the existing unused drilling leases Big Oil is sitting on?

A report by the U.S. House Committee on Natural Resources...states that oil and gas companies hold leases to 68 million acres of federal land and waters, spread out all across the country, that are not producing anything. An additional 4.8 million barrels of oil could be produced daily if the land was utilized, the report says.

...

Utilizing the 68 million acres would nearly double domestic oil production, the report concludes. It could also produce 44.7 billion cubic feet of natural gas each day, increasing production by 75 percent.

Oil production on these lands has the potential of cutting U.S. oil imports by more than one-third, according to the report.

...the Bureau of Land Management has issued 28,776 permits for public drilling in the past four years, though only 18,954 wells were actually drilled. That means oil and gas companies have stockpiled nearly 10,000 drilling permits.

Link.

ISSUE #2: Has anyone told you about our current refinery capacity and utilization problems?

Refinery utilization was lower than typical in first quarter 2008. Actual first-quarter 2008 utilization averaged 84.7 percent, compared to the average of 89.1 percent during first quarter 2001 through 2005 (years where first quarter volumes were not significantly impacted by hurricanes). In April and May, utilization remained low, averaging 86.1 compared to an average of 94.1 for the two months during 2001-2005.

While petroleum product prices are continuing to break new records, why is refining capacity utilization low?

...

Market conditions are the driver behind the discretionary cutbacks in crude inputs. Gasoline prices have risen in 2008 mainly from increases in crude oil prices. Refiners purchase that crude oil and sell product at wholesale prices. The wholesale gasoline price spread (the difference between spot gasoline and crude oil price), where refiners operate, has narrowed, indicating plenty of gasoline supply has been available to meet demand. Supply was outpacing demand in January and February, and inventories built substantially (Figure 1), resulting in very high stock levels and very low wholesale (e.g., spot) gasoline price spreads. Indeed, at some points in March 2008, the gasoline wholesale price was actually cheaper than crude oil. In addition, refiners have been blending more ethanol into gasoline, further reducing the need for gasoline from crude oil. As summer demand has been picking up, inventories have been drawn down from their very high levels at the beginning of March, but gasoline spreads have not increased much. If U.S. refinery utilization increased, gasoline prices might decrease some, but probably not by much, since wholesale gasoline spreads are already low, and crude prices remain high.

Link.

So leave alone the fact that it takes 6 or more years to build a refinery, we can't even fully use the ones we've got.

And as if the first two issues were not problem enough, there is:

ISSUE #3: Has anyone told you about the shortage of drilling ships?

As President George W. Bush considers repealing a ban on drilling off most of the coast of the United States, a shortage of ships used for such drilling promises to impede any rapid turnaround in oil exploration.

...

"The crunch on rigs is everywhere," said Alberto Guimarães, a senior executive in charge of developments in the Gulf of Mexico at Petrobras, the Brazilian oil company that has discovered some of the most promising offshore oil but been unable to get at it.

"Almost 100 percent of the oil companies are constrained in their investment program because there is no rig available"...

... the tightness in the rig market could last several more years.

Link.

A lot of motion and no destination, don't you think?

It's almost funny.

Too bad I don't feel like laughing.


[edit on 19-6-2008 by loam]

I almost always agree with you. I think you have some of the most thoughtful and earnest posts on ATS. But in this case, although I know your two main points are accurate, I think it's imperative to fly a finger high to the International Oil Cartel and the Speculative Banksters and support off-shore drilling as well as all other forms of energy independence.

Intellectually, I know we won't see any benefits for a while AND that we need to pursue renewable energy sources - but, in the mean-time, we need to get off the crack pipe of foreign oil for strategic/geo-politcal purposes.

reply to post by kosmicjack


Thank you for the compliments.

I understand your desire to get off the crack-pipe. But the President's strategy will not accomplish that.

If the current unused drilling leases amount to nearly 100% of our current domestic oil production, then who is gonna be doing the drilling in these new locations off-shore and in ANWAR???

Given the barriers to entry, I don't think there are going to be that many new domestic drilling entrants. So who is the President, et al, doing this for?

At best this is meaningless political theater... At worst, it's a gift to some as of yet unidentified beneficiaries.

What I am certain of is that this has nothing to do with helping consumers in the short or long term.

Let's call a spade a spade.

What I am certain of is that this has nothing to do with helping consumers in the short or long term.

On this we can certainly agree.

No matter what the source of energy or commodity, we can rest assured that the CorpGov will manipulate it, market it, tax it and otherwise use it to guild their SuperClass lifestyles.

heres one for you why is our govrment giving oil subsities to europe as tho it isn't hard enough i believe it was to the tune of 66billion dollars. when we have farmers fixing to go bust.

when the oil goons testified b4 congress,,, they said utilizing our own oil would only reduce prices by maybe 10 cents a gallon,,, so that's not much relief,,, a little but not much,,,,,is it as some say,,,,our weak dollar,,, and speculation causuing most of this?????? most say no supply shortage,,, and as u stated earlier,,,,, the oil barrens b4 congress blamed that 86.1 output,,,, to needed repairs and shutdowns for routine repairs,,, and also because they didn't need that peak output
at say 94%

so who is screwwing us and who is getting super rich of our broken, empty wallets????


another point we get like 80% of our oil from canada apparently,,,,,however with that numkber is canada getting it overseas and then we get it from them,,,,,or is it all right from canadian soil,,,,

also even if we get american oil,,,,,i would be leary these same companies are gonna screw us as well and charge the going rates we pay from overseas anyway,,


we are just sh-t out of luck all around in my view

I'm going to try to dissagree with you politely, please respond to me in the same manner.


Issue #1: Has anyone told you about the existing unused drilling leases Big Oil is sitting on?

First, you act like "Big Oil" is an evil component of a Dictatorial Regime. Let's be honest here, the Oil companies employ hundreds of thousands of americans, supporting thousands of homes with good salaries, insurance, and other benefits. When Oil Companies do well, our 401K earn better money. When Oil Companies do well, they can invest in more forms of energy resources. When the do poorly, they lay off people and don't invest. To think that we need to punish "Big Oil" for making a profit is counter productive to fixing this current economic downturn.

More to the point of your issue; however, you site an article in a tiny local paper in Charleston West Virginia. In the article, the reporter basically regurgitates what Congressman Nick Rahall (D-W.Va) said in a house report. The reporter did not take the time to follow up on the Congressman's assertions, nor did he provide any opportunity for opposing viewpoints.

Since the Democrat majority in Congress and the Senate began this assertion, I've looked all over the web for actual statistics and proof. I can't find it. I am intersted in knowing if it's true, of course, and more importantly, why.

My expectation is that it is partially true--we all know how politicians work: espousing a half truth surrounded by a pack of lies. I also expect that when we get down to the root cause of the "non-utilization" issue, we will find that the Oil Companies have not been allowed to develop those lands due to existing court cases brought against them by environmental advocacy groups.

Again, these are my expectations, since I have not been able to first confirm the assertion and second determine a root cause. Does anyone know where I can find proof of their assertions?



Issue #2:Has anyone told you about our current refinery capacity and utilization problems?

I read an interesting article from the Herald Tribune, published May 14th. here This article, produced by a reporter for the Global Edition of the New York Times, informs us that refiners are caught in a double bind.

"The price of their raw material, oil, is rising because of strong global demand. At the same time, consumption of gasoline in the United States is falling as a result of slower economic growth and consumer efforts to conserve."

I recommmend reading this article, because it sheds some light on the challenges businesses have when competing in a global market.

Just a note on "Full Utilization." Full utilization of any production facility is like driving your car down the road at 90mph in Overdrive. Sure, you get there faster, but you are wasting huge amounts of energy and causing significant wear and tear on the drivetrain.


Issue #3:Has anyone told you about our current refinery capacity and utilization problems?

This is an awesome find! It brings to light yet one more place where we as a nation have failed to anticipate energy and infrastructure needs over the past 30 years. Democrat, Republican, Oil Executive, and Consumer are all to blame. I do hope my 401K manager is investing in Asian Shipbuilders, though.


[CONTINUED...]

I'm going to try to dissagree with you politely, please respond to me in the same manner.


Issue #1: Has anyone told you about the existing unused drilling leases Big Oil is sitting on?

First, you act like "Big Oil" is an evil component of a Dictatorial Regime. Let's be honest here, the Oil companies employ hundreds of thousands of americans, supporting thousands of homes with good salaries, insurance, and other benefits. When Oil Companies do well, our 401Ks earn better money. When Oil Companies do well, they invest in more forms of energy resources. When the do poorly, they lay off people and don't invest. To think that we need to punish "Big Oil" for making a profit is counter productive to fixing this current economic downturn.

More to the point of your issue; however, you site an article in a tiny local paper in Charleston West Virginia. In the article, the reporter basically regurgitates what Congressman Nick Rahall (D-W.Va) said in a house report. The reporter did not take the time to follow up on the Congressman's assertions, nor did he provide any opportunity for opposing viewpoints.

Since the Democrat majority in Congress and the Senate began this assertion, I've looked all over the web for actual statistics and proof. I can't find it. I am intersted in knowing if it's true; of course, and more importantly: why.

My expectation is that it is partially true--we all know how politicians work: espousing a half truth surrounded by a pack of lies. I also expect that when we get down to the root cause of the "non-utilization" issue, we will find that the Oil Companies have not been allowed to develop those lands due to existing court cases brought against them by environmental advocacy groups.

Again, these are my expectations, since I have not been able to confirm the assertion or determine a root cause. Does anyone know where I can find proof of their assertions?



Issue #2:Has anyone told you about our current refinery capacity and utilization problems?

I read an interesting article from the Herald Tribune, published May 14th.

www.iht.com...

This article, produced by a reporter for the Global Edition of the New York Times, informs us that refiners are caught in a double bind.

"The price of their raw material, oil, is rising because of strong global demand. At the same time, consumption of gasoline in the United States is falling as a result of slower economic growth and consumer efforts to conserve."

I recommmend reading this article, because it sheds some light on the challenges businesses have when competing in a global market.

Just a note on "Full Utilization." Full utilization of any production facility is like driving your car down the road at 90mph in Overdrive. Sure, you get there faster, but you are wasting huge amounts of energy and causing significant wear and tear on the drivetrain. Operating at peak efficiency provides the best profit margin and return on investment.


Issue #3:Has anyone told you about the shortage of drilling ships?

This is an awesome find! It brings to light yet one more place where we as a nation have failed to anticipate energy and infrastructure needs over the past 30 years. Democrat, Republican, Oil Executive, and Consumer are all to blame. I do hope my 401K manager is investing in Asian Shipbuilders, though.

[CONTINUED...]

[edit on 19-6-2008 by faight]
grammer fix...

[edit on 19-6-2008 by faight]

COMMENTARY:
I firmly believe that there needs to be a comprehensive solution to our energy problem.

1. We need to be more efficient:
a. Gas Mileage Fleet Averages need to be adjusted, and Detroit needs to figure out how to do it without laying off hardworking Americans. Please note that the industry is doing this naturally due to customer demand. I don't think we need a law to mandate it--we do however as consumers let the companies know they have a market for electric and hybrid vehicles.
b. Radiant Barrier and Insulation installation – Homes and Corporations that install a Radiant Barriers and Improved Insulation can see as much as a 70% reduction in energy consumption.
c. Electrical Furnace Upgrades – Installing High efficiency heating and air conditioning can significantly reduce energy costs. Moving from Oil / Gas heat to Electrical heat could reduce our US oil consumption by 5 – 15%. I believe the government should provide larger tax incentives and rebates for homes that upgrade.

2. We need to increase energy production.
a. Environmental Groups need to work with Oil Companies to ensure we can get the Energy we need to prosper in a Global Economy with the least impact to the environment. Notice the "Work Together" concept here. We need to Produce More, both on current leases, and on new leases; with the goal of being off oil by 2038.
b. We need to build more Nuclear Power Plants. The US only produces 19% of its power through the use of Nuclear Energy. France produces over 70%. Shame on us! Nuclear Energy, coupled with spent fuel recycling, can reduce our petrochemical consumption by 50%! Nuclear energy is the cleanest, most efficient form of energy production there is. In my opinion, not investing in Nuclear Power in our country is criminal negligence.
c. Home Renewable Energy Solutions (wind, solar, and thermal). By installing these energy production facilities, homeowners and businesses can significantly reduce or eliminate their consumption. Some systems can even produce enough power to add energy back to the grid, increasing supply and reducing costs. I believe the government should provide larger tax incentives and rebates for homes that install renewable energy.

3. We need to continue to research alternatives.
a. The President should mandate that 50% of all combat vehicles operate petrolium free by 2030. This would cause Defense Advanced Research Projects Agency (DARPA) to research alternative fuels. Some of our best minds and most talented engineers work for Defense Companies, and many of the things we currently enjoy have come from the coffers of DARPA. Congress should fund it.
b. Stockholders in Oil companies should call for the executives to find alternative markets to diversify into--since we know that petrolium products are going to run out eventually. Oil companies will not be a good investment when that starts to happen, believe me, unless they are prepared to make money doing something else... maybe they could get into some other form of power generation and transmission.
c. We should create a "P-Free challenge", like the X-prize challenge that fueled the most recent private space race. This was a prime example of how american ingenuity can succeed without the interaction of government.


A few numbers here for the geeks amoung you:
ANWR could produce 5% of the US Energy Needs for 16 - 36 years; more if we can improve Energy Efficiency.
Offshore Drilling could produce another 10%.
Moving from Oil based Electrical Generation to Nuclear Power could reduce our reliance on foreign oil by 50%.
Moving from oil/gas based heating units could reduce oil consumption in the us by 5 - 15%.

CONCLUSION
1. Support Expanding Leases into ANWR and Offshore.
2. Stop giving charitably to any group that opposes Ecologically Friendly energy reclamation.
3. Stop giving charitably to any group that opposes Nuclear Energy.
4. Install a net monitored Wind Generator, or Solar Panel on your home.
5. Install an Electrical Furnace if you are currently running Natural Gas or Oil.
6. Support Nuclear Power.
7. Support Wind Power.
8. Add a radiant barrier in your attic.
9. Don't fall into the trap of "Big Oil" or "Big Government" propoganda. If you see someone saying that about "Big Oil" or this about "Yadda conspiracy Group" its probably fear mongering.


Please be kind to the conservatives. We just want to be left alone, watch football, and stay safe from Terrorism (whether it's foreign born, or government instituted).

People, people drilling in America is not going to fix the unregulated practices of the speculators in the markets.

Now wait when the salivating wildcatters take hold of the land speculations

We are going to pay an arm and a leg for gas. Oil companies do not control the prices of oil they just profit from it.

OPEC is not directly influency the prices of oil as oil exchanges in the world that are all doing just that.

They are the New York Mercantile Exchange (NYMEX,
www.nymex.com...),

the International Petroleum Exchange in London (IPE, www.ipe.uk.com...)

the Singapore International Monetary Exchange (SIMEX, www.simex.com.sg...).

the Paris-based International Energy Agency (IEA, www.iea.org...)

and the US Energy Information Administration (EIA, www.eia.doe.gov...),

And, our oil do not come solely from Saudi Arabia either.

Canada, first in the list, Mexico, second in the list, Saudi Arabia, third in the list, Venezuela fourth in the list.

It seems tha we have been geared and manipulated to forget our two oil selling neighbords, our first and second.