Need for drilling becoming clearer

Waterbury Republican-American ^ | February 26, 2012 | Editorial

[Graybeard58]

As he kicks his re-election campaign into high gear, President Obama has sought to portray himself and his Democratic allies as the champions of the common person against Republicans who couldn't give a hoot about non-millionaires. While this might seem like a winning talking point, Democrats have failed average Americans in a big way.

Their party's adherence to the environmental lobby has resulted in missed opportunities for oil and gas exploration. Had Democrats been tethered to reality, Americans struggling with unemployment and increased gasoline prices would be in better shape today.

In his Jan. 24 State of the Union address, Mr. Obama said his administration has been hospitable to oil and gas exploration. His record suggests otherwise. As we pointed out in our Oct. 13 editorial "President blind to opportunity," Continental Resources, the 14th-largest U.S. oil company, discovered and initiated drilling in the Bakken oil fields of Montana and North Dakota, generating jobs and tax revenue in those states. Harold Hamm, Continental's CEO, said he got a chilly reception when he told the president of his company's success and pushed for further exploration. Mr. Obama said policy should be geared toward "green" energy development. (Like Solyndra?)

The Obama administration has obstructed Keystone/XL pipeline construction. This project would bring hundreds of thousands of barrels of oil into the United States each day from Canada, and create thousands of short- and long-term jobs.

The administration's lethargic pace in lifting the moratorium on drilling in the Gulf of Mexico after the 2010 oil spill resulted in the loss of hundreds of thousands of barrels of oil each day, and billions of dollars in lost wages. In late 2010, the president imposed a seven-year ban on on drilling in the vast Outer Continental Shelf, leaving an estimated 86 billion barrels of oil and 420 trillion cubic feet of natural gas untapped. Then-President George W. Bush had allowed limited drilling there in July 2008.

Then there is Alaska's Arctic National Wildlife Refuge (ANWR). The refuge is estimated to contain 5.7 to 16 billion barrels of oil. According to ANWR's Web site, opening it to drilling would create 250,000 to 735,000 jobs and, the Congressional Budget Office has estimated, would generate $2.5 billion in new revenue for the federal government over the next decade.

Yet it long has been a badge of honor in Democratic circles to take a "hands-off" stance on ANWR, even though only 1.5 million of the refuge's 19 million acres would be considered for exploration.

In 1995, then-President Bill Clinton vetoed a measure pushed by the GOP-controlled Congress that would have opened ANWR to oil and gas drilling, saying, "I want to protect this biologically rich wilderness permanently." Seven years later, Senate Democrats killed a proposal by Mr. Bush to open ANWR, arguing that even if it were opened immediately, oil wouldn't be produced for nearly a decade. (So much for thinking about the future.)

In 2008, the eight major candidates for the Democratic presidential nomination, including Mr. Obama and Vice President Joe Biden, opposed ANWR drilling, saying that going forward with it would, among other things, fail to reduce dependence on foreign oil, contribute to global warming, decimate the environment and remove incentive for developing "green" energy. Additionally, the two most influential Democrats in Congress today, Senate Majority Leader Harry Reid of Nevada and House Minority Leader Nancy Pelosi of California, are longtime opponents of ANWR exploration.

CBS News (not exactly a conservative outlet) reported the current average cost of gasoline, $3.58 cents per gallon, is a record high for this time of year, and there is speculation that it could reach $5 by summer. As Americans struggle with the cost, as well as the still-high unemployment rate, they should keep in mind which party has a history of opposing energy proposals that would keep the cost to a minimum and supply working Americans with job opportunities.

[Graybeard58]

Ping to a Republican-American Editorial.

If you want on or off this ping list, let me know.

[kingu]

The only lasting method to lower gas prices is to lower the massive deficit spending. If you go by the ‘big bang’ theory that the universe is 15 billion years old, this year's spending deficit is as if you spent $100 each and every day since the first moment. And that's JUST the deficit, not the massive size of the federal budget.

The dollar is falling. No amount of drilling can compete with the spendfest in Washington and elsewhere. Cut the spending, you'll cut the free fall.

I'm not saying ‘don't drill’ - drill as much as you can, get off the dependence on foreign oil, stop feeding those who want to kill us. But if your goal is to lower the price per gallon of gasoline, drilling won't do it. There's no lack of supply right now, just a lack of common sense in Washington.

[Captain7seas]

Restricting access to our natural resources (petroleum is just one) follows the U.N. Agenda 21 poicies that have been implemented since 1994. The U.N. defined at the ‘92 Rio “Earth Summit” that the use of fossil fuels was “not sustainable”. We are reaping the effects of Agenda 21: collapsed economy, escalating prices.

[eyeamok]

You be correct, I have been telling this to people for a long time. Your Money is being Stolen right before your eyes, the fraudsters call it inflation.

[muawiyah]

At $7.00 per gallon EVEN DEMOCRATS will abandon Obama and his idiots. At $8.00 per gallon EVEN ESTABLISHMENT REPUBLICANS will give up the idea that Obama can't be beat ~ so save the Senate seats.

Bush ~ one of 'em ~ might even say something.

[Smokin' Joe]

I recall gasoline at .20/gallon. Of course, that $0.25 was silver. Doing the math, .20*.72(the number of ounces in a dollar of US pre-'65 silver coinage)*$35.51 (Kitco spot price for silver) equals $5.11

I'd say the price has gone down, if you use the value of silver for a comparison.

Or more simply put, the value of a dollar has gone down, not that the price of gasoline has gone up.

Note, too, that the Obama administration has also put stumbling blocks in the way of domestic production on land, and shut down Federal Leases in Utah, Wyoming, Colorado, and elsewhere, not just offshore and Alaska.

The activity in North Dakota and Montana can be partly credited to this action by the Feds (aside from the Bakken being one heck of a reservoir), because the majority of the land in Eastern Montana (and mineral rights) are held not by the Government, but by private landowners and mineral rights owners (the surface ownership and rights can be separated and sold separately from the mineral rights in the subsurface).

While the Government has been seeking ways to impede that progress, a State Government amicable to oil and gas development has made a difference.

The Feds even went so far as to conduct helicopter and vehicular surveys of producing locations and found 28 birds (on 6,000 producing locations), they then prosecuted seven oil companies for the deaths of these migratory birds, seeking not only $15,000 per bird in 'damages', but jail time for 'responsible parties'.

When asked about bird kills at windfarms, they question was ignored.

They have gone after hydraulic fracturing (fracking), even though the FederalGOvernment was a participant in a study carried out by eight oil companies and the government to see just how far a frac goes in the subsurface. The study involved drilling three horisontal wells, parallel to each other, and monitoring the frac job done on the central of the three wells using pressure and seismic monitoring in the adjacent wells and a host of instrumentation in shallower near-surface wells.

The Feds KNOW there is no threat to groundwater in the region, and yet they persist in pushing the meme.

They even tried via the EPA to file complaints about 'haze', CO2 from flaring gas at producing locations, and just about every other gimmick they have been able to muster, but none have worked.

So now, with the opposition to the Keystone pipeline, their buddies are making money off of railhead trasnportation of oil, (Buffet is savvy, and that has been a going development for years because there was not enough pipeline capacity--Obama just cinched his profits, much as he guaranteed there would be deepwater offshore rigs available for the Brazillian ventures Soros is tied up in).

Keep in mind that higher profits do not necessarily translate to more jingle in the long run. The costs of drilling have increased considerably since we drilled the first Bakken Wells (about 3 million in 2000 to 10 million today, and the leases to drill have increased in price significantly as well).

All of this activity has sorely taxed the available personnel, infrastructure, etc., and while the region is prosperous, the formerly $400.00/month two bedroom apartment now rents for $2000.00 or more. The numbers might seem huge on the 'profit' end, but the investments are far bigger. As a percentage return on investment, for instance, oil companies are knocking back profits of 7-10%. By contrast, beverage bottlers (soft drinks) commonly take in 20% profits, and no one gripes about that.

[muawiyah]

At the same time back when gasoline was twenty cents a gallon computers cost tens of millions of dollars.

I'd say the price of computers has dropped and the value of the dollar has gone through the ceiling!

[Hojczyk]

A strong dollar will also help to bring down the price of oil

[Mike Darancette]

Drill Baby Drill? We can’t do just that alone we’ve got to make sure what we drill stays here. Any excess crude production will be bought up by the Chinese and if they can’t use it now they will store it as an investment.

[Gilbo_3]

hey guys, riddle me this please...

lately ive been trying to piece the puzzle together and it seems that the decades long assault on our own resources has past the tipping point...it seems that everytime we even speak of ramping production, and for many other reasons, the arab oil states can turn up/down the flow and more or less make our production in the CONUS unprofitable/undesirable whenever they desire...

combined with the regulatory, and probably most importantly, the weakening of the currency, and we really seem to be unable to really make 'drill here, drill now' either business or politically appatizing...

it seems that established fields and companies are able to adjust, but the game is over as far as our own resources go...thats not even addressing refining capacity that appears to be declining and increasingly subject to the whims of weather in the gulf...

what can/should be done ???

[thackney]

and it seems that the decades long assault on our own resources has past the tipping point...it seems that everytime we even speak of ramping production,

We are past the talking stages. We have stopped the decline in production and have started increasing the total US production rate, mostly due to increases from Texas and North Dakota.

and for many other reasons, the arab oil states can turn up/down the flow and more or less make our production in the CONUS unprofitable/undesirable whenever they desire.

They would have the discipline to keep it low for an extended period of time, assuming they have the ability to produce that much oil, plus they would need the coordinated discipline to hold the price low for quite a long time. I don't believe they have much more than the ability to handle short term swings.

and we really seem to be unable to really make 'drill here, drill now' either business or politically appatizing...

True on Federal land and water, but on private land in states that want the business, we are going gang-busters in drilling right now.

North American Rig Report for 2/24/2012 (historical charting)
http://files.shareholder.com/downloads/BHI/1713657606x0x545359/2114654C-6275-498F-9AEB-2A755005C9B0/na_charts_022412.pdf

thats not even addressing refining capacity that appears to be declining and increasingly subject to the whims of weather in the gulf...

Refinery capacity has increased a great deal over the years due to upgrades and expansions of existing refineries. We now refine more product than our country consumes making us a net exporter of refined product (while still importing a lot of crude oil).

And refining has rarely had any lasting weather impacts of magnitude. I believe you are thinking of Gulf of Mexico Offshore oil production.

what can/should be done ???

Educate yourself on reality and learn to use the shift key to capitalize and not look like a texting teenager.

[thackney]

Any excess crude production will be bought up by the Chinese

We have got a long, long ways to go to reach a point of excess crude oil production. We import more than we produce ourselves.

[Gilbo_3]

just wow thackney...i pinged ya and got a good lesson, and still dont understand how anything in the real world will lower our costs, since production and supply seems to be doing well according to your info...

so it looks to be all monetary policy problems, and in effect, we will only see the continuing upward trend of prices...

now having said all that, i wont bother to 'ask the expert' in the future, as obviously i should just read the msm enlighten myself with the resourses at my fingertips on informal forums... Educate yourself on reality and learn to use the shift key to capitalize and not look like a texting teenager.

because pettiness like that just lowered my respect for you to where gas prices *could* be...

[thackney]

still dont understand how anything in the real world will lower our costs, since production and supply seems to be doing well according to your info...

Global demand has climbed at the same time. You cannot look at only one side of the economic picture to determine price.

the resourses at my fingertips on informal forums

Perhaps I have higher respect and expectations of Free Republic than you. Your questions were based upon so much false claims it sounded like a seminar caller to Rush Limbaugh. Sorry if hurt your feelings.

[Gilbo_3]

Perhaps I have higher respect and expectations of Free Republic than you. Your questions were based upon so much false claims it sounded like a seminar caller to Rush Limbaugh. Sorry if hurt your feelings.

well, with so much false info out there, i thought asking somebody who always has a good grasp of the real situation was in order, to educate myself and others on the real world stuff, rather than chase multiple leads to the same falsehoods...

as i said, the *respect* that you earned over the years, in my eyes anyways, doesnt seem to mean squat to ya, if informal typing ettiquette is yer yardstick of my intellect... same goes for my inability to read the tea leaves on subjects of my own limited knowledge...

so sorry to have burdened you with my feeble attempts to better understand the true dynamics of oil recovery and production, and the impact of policies concerning the worldwide industry...i thought thats what this forum was designed to accomplish...

dont waste bandwidth in reply, as i wouldnt want you to spend that or yer precious time dealing with unwashed and uninformed peasants like myself...

[thackney]

I took the time to answer each of your questions and provide links to the source of the information.

It is a shame you don’t care as much in communicating with others on this forum, intentional disregarding methods of effective written communication.

If you prefer informal chat rooms, maybe you should ask your questions there.

[Smokin' Joe]

I recall ground beef at .19 a pound, too.

You can't eat computers, the old ones will work a while longer.

You can even buy refurbished computers, but I'd be leery of 'refurbished' corn...

The reality is that while computers can achieve market saturation, food and fuel aren't likely to do so any time soon, unless the market goes to hell in a handbasket, and that wouldn't be a good thing...

[thackney]

I guess the intentional “dumbing” down of communication of Free Republic pushes my buttons. I apologize for the harsh choice of words.

[Smokin' Joe]

I recall ground beef at .19 a pound, too.

You can't eat computers, the old ones will work a while longer.

You can even buy refurbished computers, but I'd be leery of 'refurbished' corn...

The reality is that while computers can achieve market saturation, food and fuel aren't likely to do so any time soon, unless the market goes to hell in a handbasket, and that wouldn't be a good thing...