To Drill or not To Drill?

http://www.outsidethebeltway.com/archives/2008/06/is_it_worth_drilling_for_more_domestic_oil/

Although I agree with the drilling for oil/natural gas as long as we can do it as eco friendly as possible but that isn't the fix it's only a very short term answer.  What we need is ALTERNATIVE FUEL that needs more attention than drilling for what resources we have.    What little resources we have does not amount to much in the big picture. 

crowny2 - 2008-06-18 2:37 PM I thought I understood that it isn't so much about the availability of oil, but the availability of refined oil and gas.  In other words, our refineries in the US can't keep up or are outdated.  Then again, I could be wrong.  Wouldn't be the first time. 

No you are not wrong.  That is ONE of the excuses they are using.

As I have mentioned before, I have no problem with alternative fuels as long as they are not MANDATED.  That is where my issues with things start. 

As far as how I feel on drilling.  Since everyone is posting links, here is a good example of my viewpoint.

http://online.wsj.com/article/wonder_land.html

I fail to see the downside of the solution to open drilling in coastal areas and then revenue share drilling profits with states providing the coastlines.  This is part of the proposal out of Florida.  It provides local and state governments $$ in their coffers to account for lost income from tax receipts relating to housing property collapsing.

But I agree that the issue is the complancency of the American public when it comes to vehicular usage of these non-renewable resources.  The big downside to economic cars included the fear of being hit by a Gigantic SUV, but when the travelling public becomes mostly smaller cars, the fear is gone.

I say drill because even if they agreed today, it would take about 10 years to realize any benefit and in that time, at least we would have continued to reduce our dependence on oil and started exploiting "alternative" fuel options.

Yeah...I've been thinking more and more that we should. The technology has come a long way, and I'm pretty convinced that it can be done without hurting the environment. ANd actually, open-water platforms actually create habitats.

But, from what I understand, oil supply isn't really the biggest stumbling block; refining capacity is.

 I agree with your statements.   But if we don't continue to explore the alternative options we will be right back in the same position in 10 years with nothing to fall back on this time.  We will be 100% dependent on other countries resources and no body will be able to afford to drive.  On the flip side though.........us cyclists will be happier

 I entirely agree with you.  The Sierra Club has been using the same argument for 40 years.  "Drilling won't do anything for at least 10 years".  Well geniuses, had we started drilling 40 years ago, we would have been pumping oil for the last 20+ years.

I say do not drill and save the crude in the ground as an additional "strategic reserve" for the future.

Regarding refineries: Current US refinery utilization is only 88%,  and hasn't varied by more than 5% over the last 2 years. 10 years ago the US was limited by refinery capacity but  today that is not a limiting factor.

Look at these data, in the summer of 1998 refinery utilization was 100%, today it is only 88%. The Texas gulf coast refineries are running at less than 80% capacity, and refined less crude in March 08 than they did in Oct 07.

Caveat: There may be some mismatch in crude grade (i.e. heavy vs. light) and refinery capabilities that prevent these numbers from reaching 100%, but 88% is still on the low end of the data range.

Besides which, if refining capacity was the limiting factor, crude should be cheap because there should be lots of crude sitting around waiting to be refined. Obviously that's not the case.

this double post is in honor of the double mint twin girls

wow people think like me.. did you get that deja vu feeling typing this  

One thing I thought of since the other thread.. isn't 88-90 % pretty much max for an average?  kind of like if you want to avg 20 on the bike you better be going 22-25 to compensate for the little lules?

good question, I do not know what the refinery folks consider to be their optimal utilization rate. BUT just comparing today to the past 10 years it appears that numbers above 88% are indeed sustainable. I'm guessing something with such enormous capital costs would require a very high utilization rate to create a good ROI.

This is false propaganda/rumors. Certainly the thought of another country siphoning off oil from pools restricted by the US and Florida governments is disconcerting. However, it's simply not happening.

Here is George Will's retraction:

In a previous column, I stated that China, in partnership with Cuba, is drilling for oil 60 miles from the Florida coast. While Cuba has partnered with Chinese companies to drill in the Florida Straits, no Chinese company has been involved in Cuba’s oil exploration that close to the United States.

And Dick Cheney's retraction:

“It is our understanding that, although Cuba has leased out exploration blocks 60 miles off the coast of southern Florida, which is closer than American firms are allowed to operate in that area, no Chinese firm is drilling there,” Cheney’s office told the AP.

I wonder how much the futures market and commodities trading plays in to the price of oil/gas?  Also, our nation's use of larger vehicles (SUVs and such) vs. other nations with way smaller vehicles can't help.  Other countries with smaller vehicles have to have the smaller cars b/c of 1. narrower roads and 2. high gas prices (2 of many reasons, I'm sure).

I also wonder if our government isn't pushing research into alternative fuels b/c our politicians are making money from the oil industry?  I wonder how many politicians trade in commodities and futures?

I don't think we've seen the last of high gas prices, unfortunately, and I don't think drilling is going to solve any problems.  Sure, prices are high, but let's say that increasing oil production actually lowers prices...then what?  We as Americans will probably go back to our old ways: big cars/SUVs and long commutes.  We would naturally increase demand.  I think our solution lies in alternative fuels (hybrids would be good to look into more) and smaller cars with better fuel economy.

I believe that alternative fuel vehicles are going to in the end be the sort of cars we drive and I have no beef with that.  However, currently they are more expensive than they are worth or are in extremely limited production.  I think that this current situation has shown us that there is a need to produce alt. fuel cars, again no problem with that as long as it is not gov't mandated.

I was thinking about this as I was cutting the grass and I had a thought.  I don't remember where I read it, but somewhere I read that even the announcement that we were willing to open the fields and start the process would affect the price.  Again, not sure where I read it.  So if that is the case why not give it at least let companies have either one coast or anwar to start and if in the end it doesn't affect the price substantially then we still have alternate fuel as I stated above.  I just hate the Sierra Club et al excuse that this will take 10 years to affect everything and have been saying it since before I was born.

The Sierra Club doesn't set energy policy for this country. The Sierra Club doesn't lease drilling rights. That is the province of the government. It's the Sierra Club's job to advocate for the environment.  And, if the argument is that we should drill so that oil prices will drop now, then they are correct in making the argument that drilling now will not change things now.

I am skeptical about this talk of opening up drilling off the coast of Florida. Here's why: Republican Jeb Bush was twice elected governor of Florida and promised he would not allow drilling off the Florida coast. The State of Florida cannot prohibit the federal government from allowing drilling off the coast but it can bring political pressure to bear on the federal government. When Jeb was running for reelection, his brother, President Bush, said that the federal government would not allow drilling off the Florida coast. For six years, President Bush had a very amenable Republican Congress to work with. During that period, when we can assume that President Bush could have actually pushed through a policy to allow drilling off Florida's coast, I recall no talk of drilling off Florida's coast.

Now that Bush is on his way out, his brother is no longer governor of Florida, during an election season when Republican fear loss of more seats within the Congress, Bush has decided that we need to drill off Florida's coast.

Maybe he's right. Or maybe he's merely making political hay, casting the Democrats as obstructing access to oil when neither he nor his brother can experience political fallout and hoping that the ruse will work against Democrats come November. It certainly is a convenient time for him to reverse his position.