Tuesday, June 24, 2008

Offshore oil in one year (!)

(Cross posted at TheNextRight)

One Democratic talking point about offshore oil is that it won't be brought to market for many years even if we start now. Eric Bolling, a trader writing for thestreet.com, gives us this interesting bit of information (emphasis added):

A Congressman followed my segment and suggested that drilling wouldn't help for 10 years or more. I know this is absolutely untrue, so I called Transocean, the biggest driller in the world. An officer of the company told me that depending on the location of the drilling, oil could be realized in as little as a year.

Ultra-deepwater fields might produce in 3-5 years. For the most remote locations, without any prior infrastructure support, that barrel may require a 4-6 year window. I suggested 8 years and he said that he could not envision a situation where it would require more than 6 years to bring a barrel out of the ocean floor.


This is a complete deal-breaker for one of the Democrats' favorite talking points.

This is huge.

7 comments:

Frank said...

"Deal-breaker"? Bwaaahahahahahaha. Do you realize that U.S. oil production has been steadily in decline since 1970? That the U.S. nowadays produces only a third of the oil it consumes each day?
And that in six more years you'll be lucky if ultra-deepwater fields will be able to do anything at all beyond replacing some of the decline in existing fields? The U.S. is most certainly not going to drill its way to energy independence. "Energy independence" in regards to oil is a pipe dream. Pass the opium pipe buddy.

Sockless Joe said...

It is a political deal-breaker, as I specifically referred to the Dem talking point. Politically, Democrats are on the wrong side of this issue. There's absolutely no way to spin that.

Additionally, I didn't say anything about energy independence. Rather, it's the Democrats who think that we can be energy independent by waving a magic wand without any 1) real use of coal 2) substantial nuclear build out and yes, 3) increased domestic production.

I have yet to hear a good reason why we can't drill every last drop off the OCS and in ANWR. Marginal production is going to sound pretty good when oil hits $250 a barrel.

Sockless Joe said...

Frank you should also be aware that your user agent string reads like this:

Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; Rabio Search Enhancer (4.2.0.0))

"Rabio Search Enhancer" is considered by many to be useless adware. I am not at all surprised to find out you were some douche from DC with an adware riddled machine that hasn't been updated lately.

Anonymous said...

geek slapdown!

Frank said...

How exactly is it a "political deal-breaker"? Did it say that ultra-deepwater fields are going to lower gas prices? What people aren't considering is that every year the mature fields in the U.S. produce less and less oil, which explains why discovering this or that field over the last few decades hasn't made a dent in the overall U.S. crude production decline. America produces not even half the crude it did when U.S. oil production peaked in 1970. The pissant fields that have been found in the last few decades, fewer and farther between and in increasingly-inaccessable locations have and are going to have an effect on the supply-demand equation that is marginal at best.

And how are the Dems on the wrong side of the issue? It's the assholes at Fox "news" and the other Republican puppets that like to whip Americans into a frenzy of ignorant expectation by framing the issue as one of "If only those tree-hugging Dems would let us drill in ANWR and drill more off the coast in the Gulf of Mexico we would be able to produce enough oil to relieve the supply-demand strain and eventually become energy independent." You don't hear Democrats filling people's heads with this fantasy. They instead look at it far more realistically and realize that no amount of drilling (or oil shale barbecuing) is going to change the issue in any significant way. OK? So you can pretend that lower gas prices are just a few more oil wells away if only the Dems will let you drill them, and that gives you a convenient scapegoat but one that anyone who has bothered to learn anything about the actual situation will see through. With oil as the backbone of the U.S. energy usage we will see nothing in the future but ever-higher gas prices and ever-greater dependence on foreign oil, frequently from countries that hate America's guts and with good reason. Renewable energy feedstocks are the future, for example making ethanol out of wood chips and switchgrass. But nothing is going to help gas prices in the near term. Nothing. At all. So don't get your hopes up. Suck it up and get used to paying $4 or more for a gallon. You can always look at it this way: a few years from now, $4 a gallon will look CHEAP.

Frank said...

P.S.-- Drill all you want to in the ANWR, I don't give a shit. In fact I look forward to it so I can laugh at all you idiots who think it's going to make a difference. THEN who are you going to blame it on? "Oh those Dems made us wait too long and all the oil evaporated!" I can hear it now.

Sockless Joe said...

More oil, even on the margin, is always better for prices. Period. If it is not economical to produce on the OCS or wherever, the oil co's won't do it. The fact that they are chomping at the bit to drill more tells me that it is worth it. No, gas isn't likely to go down, but it will rise at a slower rate. $5 sounds better than $6. Even if it doesn't budge the price, it will be American companies producing that oil and paying taxes on their profits.

Sure cellulosic ethanol would be great. But we don't have it. I'd love to see more R&D money put into it. But no amount of corn ethanol subsidy will change the fact that corn ethanol is a bust.

Similarly with solar. It isn't economical now. You can subsidize it, but that doesn't change the underlying economics. Only by improving the basic technologies so that they are cheaper than oil (without subsidy) will any real progress be made.

And yes, finding or opening new production fields helps the price NOW before a single well has been brought on line because of the scarcity premium built into the price. People are yelling about speculators, but it is the job of speculators to tell the market when a resource is becoming increasingly scarce.

Democrats say that (1) it will take 10 to 15 years to bring oil to market, that (2) drilling is an unacceptable environmental risk, that (3) it won't help prices now, and (4) that the oil co's are ignoring resources on currently leased land despite the overwhelming incentive to bring every last drop of oil to market they can get. Wrong on all accounts.