About Time!!!

[Acumen]

McCain will push for oil exploration as a short term answer to gas hikes.

http://www.politico.com/news/stories/0608/11127.html

[metis]

McCain will push for oil exploration as a short term answer to gas hikes.

This will not likely have any significant short-term effect, but could have some long-term effects-- it simply takes quite a few years to go from finding, drilling, shipping, and then refining oil.  Some say ANWAR would take up to 20 years, although Thorolf says he read that it would take more like 15.  Either way, this is not exactly "short-term".

[WorldWarrior]

How long does it take from the time one begins choosing a drilling site until the first barrel of crude reaches the refinery?

[metis]

How long does it take from the time one begins choosing a drilling site until the first barrel of crude reaches the refinery?

It's generally quite variable because there's all sorts of factors that must be taken into consideration.  For example, building a new oil rig is very expensive and time consuming versus drilling in Saudi Arabia or Kuwait whereas the oil is quite close to the surface. 

Then there's also the Beverly Hillbillies... 

[WorldWarrior]

Metis--could we say that it won't happen within a few months? That drilling results wouldn't appear at the pump for oh say at least a year?

[metis]

Metis--could we say that it won't happen within a few months? That drilling results wouldn't appear at the pump for oh say at least a year?

I've read that about the shortest it could take in even the best of situations would be about 5 years.  However, I cannot remember where I ran across that figure.

[TENAC]

McCain will push for oil exploration as a short term answer to gas hikes.

http://www.politico.com/news/stories/0608/11127.html

(shakes head)  Agreed.

Look we have a flip flopper, they have a flip flopper.  As long as our ff lies flopped on the correct side, whew....ok.

This is no way to have an election for the leadership of this country.

[Acumen]

I've read that about the shortest it could take in even the best of situations would be about 5 years.  However, I cannot remember where I ran across that figure.

Vern,

Most articles I've read estimated 8-12 years for reaping the benefits of ANWR.  I have yet to see one that posited a time line at 15 to 20 years.  However, let's keep in mind that this is the time line for ANWR, not the continental shelf. 

As far as I know, McCain is still opposed to drilling in ANWR because it's a wild life refuge.  In that vein, McCain has been consistent.  So I'm not sure I agree with Tenac that McCain has flip-flopped on this issue.

[TENAC]

I've read that about the shortest it could take in even the best of situations would be about 5 years.  However, I cannot remember where I ran across that figure.

Vern,

Most articles I've read estimated 8-12 years for reaping the benefits of ANWR.  I have yet to see one that posited a time line at 15 to 20 years.  However, let's keep in mind that this is the time line for ANWR, not the continental shelf. 

As far as I know, McCain is still opposed to drilling in ANWR because it's a wild life refuge.  In that vein, McCain has been consistent.  So I'm not sure I agree with Tenac that McCain has flip-flopped on this issue.

Shale oil, I understand we can get to it within 18 - 36 months.  Obviously much quicker than Anwr.

McCain's schizophrenic oil policy votes:

    With the price of gasoline surging past $4 a gallon in many parts of the country, Senator John McCain called today for the lifting of the federal moratorium on offshore oil drilling for states that want to permit it.

    He said that he also favors giving states incentives to allow exploration, part of an energy proposal that he said would be “very helpful in the short term for resolving our energy crisis.”

    Mr. McCain, the presumptive Republican nominee, said the impact of high fuel prices was hitting Americans, not only at the pump, but also in the form of rising food prices and threats of inflation.

    “We must embark on a national mission to eliminate our dependence on foreign oil and reduce greenhouse gases through the development of alternate energy sources,” Mr. McCain said, adding that he continues to support a summer gas tax holiday.

    Mr. McCain has a mixed record on the issue in the Senate. In 2001 and 2006, he voted in favor of offshore oil drilling in Florida, but in 2003 he voted against it in Florida and other states. Mr. McCain has consistently opposed drilling in the Arctic National Wildlife Refuge.

So make of it what you will.

But this is McCain.

[Thorolf]

The benefits of allowing expanded drilling and recovery offshore (and/or in ANWR, the Rockies, etc...) would be felt at the pump within a matter of months, if not sooner.

Notice I don't say a single word about how long it will take to get that oil to market?

[TENAC]

The benefits of allowing expanded drilling and recovery offshore (and/or in ANWR, the Rockies, etc...) would be felt at the pump within a matter of months, if not sooner.

Notice I don't say a single word about how long it will take to get that oil to market?

If you get the ban lifted, only lifted, and per barrel prices begin to drop, you will know it was a large degree of speculators that were driving the price.

Speculators are trend followers.  If the US determines to take control of its energy future, whether it involves oil, coal, nuclear, or wind, the trends will change and speculators will go elsewhere, as this current upward spiraling trend is coming to an end.  Once we decide as a country to get govt out of the way and take care of a problem, no other nation is better equipped to do so.

Oil isnt going away as the number one global energy source.  Not anytime soon.  We should determine to compete.

[Thorolf]

I don't think demand has really changed all that much - if anything it has gone down as winter ends and people are shellshocked by gas prices. Not enough to make any REAL changes, but globally, people are feeling the crunch.

Supply has been an issue, as the OPEC countries have fiddled with it - but there is hardly a shortage...

Futures trading is certainly having a significant impact, so even just the step in the direction of affecting the current structure of oil supply and energy independence, I think, will create a fairly significant drop in the price of a gallon of gasoline.

[metis]

Futures trading is certainly having a significant impact, so even just the step in the direction of affecting the current structure of oil supply and energy independence, I think, will create a fairly significant drop in the price of a gallon of gasoline.

Not according to some experts.  Let's say that there is drilling with success in tapping into reservoirs, which is a distinct probability.  How does that relate to lower oil/gas prices?

Here's part of the problem.  Those doing the drilling will be large oil companies (unless you want to nationalize some of the drilling), and why would they pump significantly higher volumes when it will reduce prices and, therefore, reduce their profits (notice that in the last quarter, Exxon/Mobil made more profit than any company in world history at the same time consumers saw a significant increase at the pump)?  If there's plenty of oil out there now, which there is, then why don't they pump and refine more now, which they easily could do? 

[Thorolf]

Not according to some experts.  Let's say that there is drilling with success in tapping into reservoirs, which is a distinct probability.  How does that relate to lower oil/gas prices?

The ability of American companies to produce enough American oil to take a significant step towards energy independence and control our own production levels is critical to managing price at the pump. Even before a single drop of oil is actually drilled, simply being ABLE to expand and increase our production capabilities will have a virtually immediate effect on futures prospecting. Since a large portion of the price of a gallon of oil is based on this prospecting, we'll see a noticeable and swift drop in prices at the pump.

Here's part of the problem.  Those doing the drilling will be large oil companies (unless you want to nationalize some of the drilling), and why would they pump significantly higher volumes when it will reduce prices and, therefore, reduce their profits (notice that in the last quarter, Exxon/Mobil made more profit than any company in world history at the same time consumers saw a significant increase at the pump)?  If there's plenty of oil out there now, which there is, then why don't they pump and refine more now, which they easily could do?

For one, they would prefer to stay in business. The higher oil prices are forcing the entire world to move rather quickly toward alternative energy sources that will, in a relatively short period of time, cut so dramatically into those profits that many of the oil companies will have trouble staying solvent. It is in their best interest to reduce the price at the pump... they've made their quick buck (although it's worth noting that their margins have not changed - just the price at the pump as brought more pennies in for those same margin percentages).

For another, employees of oil companies and their families also live here, and are also feeling the pinch of the rising gas prices. For that matter, every country (except the oil producers themselves... and Brazil) are experiencing some painful results of the price at the pump.

Finally, they will not have to deal with (and pay) the countries where they are currently drilling, or handle the same level (and cost) of transportation. In actuality, they could theoretically achieve a drop of prices at the pump and actually make MORE by tapping into the resources we have available. Of course, the government will insist on dipping its fingers into the barrel... but if things are managed well, such a move could actually be better for pretty much everyone involved...

[metis]

Thorolf, these are multi-national corporations with their fingers in a great many countries worldwide, and their main reason for existence is for profit.  And since most oil investments are made internationally, don't expect that we somehow will dictate what they do, and oil is bought and sold on that same international market. 

We can cry and scream all we want, but that's simply the way it is.  If we want significant control, then we would either have to regulate or nationalize, both of which present major problems. 

[Thorolf]

I presented an argument that there would likely be little change in their bottom-line profitability, and that said profit could CONTINUE indefinitely... but without making the move to drill here, the handwriting is on the wall. Many of those corporations won't be around in 15 years if we don't work to bring back down the price of oil, and those that survive the bloodletting will be much less profitable.

Their status as multi-national corporations is, IMO, completely irrelevant to anything I posted. The GLOBAL market is drying up as people become increasingly motivated to consume less oil, and since the US is a *HUGE* component of that global market, even if it was just us that took steps away from oil dependence, it would go a long way toward decimating the industry.

And it won't be "just us." Heck, Brazil is already there, moving toward 100% ethanol and increasing production to sell ethanol around the world to alleviate some of the burden of expensive oil (and make some money!) We have hydrogen fuel cell cars hitting the US market next in the next few months...

These oil companies simply can't afford for that trend to pick up more momentum... and the only way to stem that is to reduce the price... and the best way, IMO, to do that is to increase supply while decreasing ancillary costs - and the best way to do THAT, IMO, is to drill here.

[metis]

Many of those corporations won't be around in 15 years if we don't work to bring back down the price of oil, and those that survive the bloodletting will be much less profitable.

No way, Jose.  With greater demand globally the oil companies are well here to stay through several decades at the least.

Their status as multi-national corporations is, IMO, completely irrelevant to anything I posted. The GLOBAL market is drying up as people become increasingly motivated to consume less oil, and since the US is a *HUGE* component of that global market, even if it was just us that took steps away from oil dependence, it would go a long way toward decimating the industry.

Only a small number of countries proportionally are in a good position to seek alternative fuels.  As the general wealth of the planet expands, the demand for oil has and will continue to increase indefinitely simply because it is a readily available product.  International demand is climbing and is likely to continue doing so unless there's a major collapse of international economies.

And it won't be "just us." Heck, Brazil is already there, moving toward 100% ethanol and increasing production to sell ethanol around the world to alleviate some of the burden of expensive oil (and make some money!) We have hydrogen fuel cell cars hitting the US market next in the next few months...

That's a long and very slow process, and there's simply no indication that either of these will be successful in putting much of a dent in the world's demand for more oil.

...and the best way, IMO, to do that is to increase supply while decreasing ancillary costs - and the best way to do THAT, IMO, is to drill here. 

Actually, I am in favor of looking into doing more off-shore drilling, but with caution.

[Thorolf]

No way, Jose.  With greater demand globally the oil companies are well here to stay through several decades at the least.

I didn't say they would ALL go out of business... but there *isn't* going to be greater demand globally. The entire planet is looking for a realistic alternative, and the higher oil prices are, the harder they are looking. Demand *will* drop off dramatically in the next few years as we rush for new technologies and fuel alternatives. The precipitous freefall in demand will force some of the oil companies out of business, or at least to merge in the effort to remain solvent.

Only a small number of countries proportionally are in a good position to seek alternative fuels.  As the general wealth of the planet expands, the demand for oil has and will continue to increase indefinitely simply because it is a readily available product.  International demand is climbing and is likely to continue doing so unless there's a major collapse of international economies.

That simply isn't true. Brazil is already exporting significant amounts of biofuel, and we have the capacity to do the same. Countries are clamoring for cheaper alternatives. They don't have to develop them by themselves to move away from crude oil. As hydrogen comes down in cost, people all over the world will be clamoring for fuel cell vehicles. It may take a few years, but it will happen if oil continues to rise.

The oil companies should be afraid... unless, of course, they're happy making the quick buck and understanding that they may not be around in their current form in a dozen years.

That's a long and very slow process, and there's simply no indication that either of these will be successful in putting much of a dent in the world's demand for more oil.

That's also simply not true. Brazil is energy independent because of their ethanol, and they believe they can produce plenty to export. With the variety of materials that are able to be converted into ethanol, and as technology improves, it is apparent that biofuel has the capacity to dramatically impact global crude oil demand.

That's not to say that I think it's a good idea... there are some huge problems with biofuel, such as the effect it will continue to have on the price of food. But as oil prices rise, so will ethanol production, as well as other alternatives.

And it is neither long, nor slow. On average, people buy new cars every, what? 3 or 4 years? Mandate that those cars have to handle flex fuels, and we could have a huge percentage of the population on E85 or higher within half a decade. Do you seriously think that wouldn't put a *HUMONGOUS* dent in the world's demand for oil? Are you aware just how much of that demand is *us?*

Actually, I am in favor of looking into doing more off-shore drilling, but with caution.

Caution against what?

[metis]

I didn't say they would ALL go out of business... but there *isn't* going to be greater demand globally. The entire planet is looking for a realistic alternative, and the higher oil prices are, the harder they are looking. Demand *will* drop off dramatically in the next few years as we rush for new technologies and fuel alternatives.

The demand is going up and it will continue to do so as I mentioned: http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/dem_image_consumption.htm

Brazil is already exporting significant amounts of biofuel, and we have the capacity to do the same...As hydrogen comes down in cost, people all over the world will be clamoring for fuel cell vehicles. It may take a few years, but it will happen if oil continues to rise.

Not enough to handle the increased demand.

That's also simply not true. Brazil is energy independent because of their ethanol, and they believe they can produce plenty to export. With the variety of materials that are able to be converted into ethanol, and as technology improves, it is apparent that biofuel has the capacity to dramatically impact global crude oil demand.

Yes, my close friend's brother-in-law actually worked in Brazil on that project back in the 70's-80's.  Again, the impact outside of Brazil will be no where near as dramatic as you imply, by all indications.  However, there still should be further development along those lines, imo.

Caution against what?

Environmental concerns.

Sorry to be so brief.  Gotta go.

[Thorolf]

The demand is going up and it will continue to do so as I mentioned: http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/dem_image_consumption.htm

Actually, since the costs spiked more recently, demand has been dropping. It hasn't simply fallen off the edge of a cliff, but demand *IS* dropping.

The most recent dates in the figure you posted are from 2003... a lot can happen in 5 years.

Not enough to handle the increased demand.

Again, demand is dropping... and yes - it can and I think WILL be enough to handle the increased demand. Biofuels alone have their problems, but the potential is there. Hydrogen, though, will be pretty easy to satisfy demand once the hardware is on the streets.

Yes, my close friend's brother-in-law actually worked in Brazil on that project back in the 70's-80's.  Again, the impact outside of Brazil will be no where near as dramatic as you imply, by all indications.  However, there still should be further development along those lines, imo.

The impact Brazil's ethanol has TODAY outside of the country, and even INSIDE the country for that matter, was all but inconceivable a decade ago. Brazil is talking big now... they have plenty of ethanol for themselves, and they are still exporting an impressive amount - with a lot of room to expand the cane fields... their technology has improved dramatically in recent years, which also helps.

Environmental concerns.

Sorry to be so brief.  Gotta go.

Understood... brevity is a good thing.

As for environmental concerns, I believe that offshore rigs generally take a good bit of caution there...