W begs Congress for Off Shore DrillingFollow

Of course not! Because the second it's going to cost them more to drill and produce the oil then they can make on the global market, they simply wont drill there.

They wont lose money. They just wont drill and wont make money. Um... Ever consider that's why there's so much land not being used by the oil companies? Sheesh! I've only explained this like 5 times now...




What reasons? What is special about the specific areas they're not allowed to drill in compared to the millions of acres they are allowed to? As a general rule, it's not because one group's environment is more pristine or important then the other. It's because one group has more readily available oil then the other. That's why the environmentalists target those areas for protection and leave the rest as open available land.

How many times do I have to repeat this? Again. Feel free to go research what percentage of land that's economically viable to find oil just happens to have been designated as a protected area Joph. It's not hard to see that there's a pattern here...



Sure. Spread out over so many disparate areas and in such low density that you can't compete on the market even at today's prices with the product you'd get if you drilled there. This is a bogus argument. I've said this before, and I'll repeat it. It's not about the total potentially available. It's about the density/depth/difficulty at any one spot.

You could have a trillion barrels of oil, but if it's spread thinly across tens of millions of acres of land, or is in a form (like shale oil for example) that requires significant pre-processing before refining and therefore costs more per barrel to produce, you're not going to be able to compete in an open market with that product against easier to obtain and produce oil.


That's why the domestic oil production is so low. We've basically priced ourselves out of the market. Why would anyone drill in the US when there area hundred much better spots around the world to drill and where the profit margin will be higher? It's why there aren't enough oil rigs for the US sites, as well. The guy operating the higher profit location will outbid you for the equipment every single time...


It's because of our overzealous environmental movement that we're unable to produce oil domestically *and* why we're paying so much for oil. And that's not really their fault, since that's exactly what they want to have happen. Make oil so expensive that people will find some other way to generate power. Duh! But let's not sit here and pretend that there's anything else happening here. The oil companies are not "at fault". They're responding in logical ways to the market forces around them. If we the people are ok with paying more for oil in return for a cleaner country, then that's the decision we'll make. But let's be honest that this is the actual decision here. It's not about the oil companies. They're just following the market. We need to decide how much environmental issues are really worth to us. And I have a suspicion that most Americans aren't going to think that $5/gallon oil is worth it...


I could be wrong. But I doubt it. What's funny is that Obama kinda accidentally slipped and said something very very valid. If the price of oil had gone up more gradually, it's quite possible that people would have just accepted it and eventually the very objective of the environmentalists would have occurred without the masses becoming alarmed. But because the price went up so quickly, the plan is backfiring. Instead of accepting that oil is just too expensive and looking for alternatives, people are instead screaming to find a way to make oil cheaper.

Support for offshore drilling in California is at a higher level then it's been in like 40 years. Latest polls show the issue is a dead heat among Californians. The point is that this sudden increase in cost is making the environmental movement look like the big bad guy, and *not* the oil companies. No matter how much you argue and twist and turn on this, that's the general perception among most people. I just think that pursuing the "big oil is evil cause they want to drill in environmentally protected areas" argument will get weaker as the summer wears on, and become a boat anchor around any politician who attempts to use it...

*cough*

Don't look at the overall "Obama vs McCain" numbers Joph. Look at the recent polls taken in California asking if they support or oppose offshore drilling here. I believe the most recent ones have it at like 45% in favor vs 45% opposed, with 7% undecided.

This is in the state where opposition to offshore drilling has been so strong that it's basically been a non-issue for most of my lifetime. No one even talks about it as an issue, yet today it *is* one. It's quite possible we may see a referendum appear about the issue. That possibility will become a certainty if gas prices don't come down. Remember, we're paying pretty much the highest price for gas right now. California voters are becoming keenly aware that unlike the voters in most of the states, we can actually do something directly about the issue. And the idea of opening up drilling has suddenly become something that folks are talking about.

Whoops. I read the Captian's post too quickly there.

Oddly, though, I couldn't find his imaginary Capitan poll data anywhere. Alas.


Edited, Jun 25th 2008 10:53pm by Smasharoo

It's really very simple, either you're for american oil companies being allowed to increase their production capacity and decrease the cost of fuel or you aren't.

No idiot. It's very simple to those who don't understand the issue at all. To anyone who knows anything about it, it's very complicated.

I'm for them increasing domestic capacity using lands already leased for that purpose

or increase supply

No, here's why. Oil's a non perishable commodity. If I have 100 billion barrels, there's no benefit to me selling them all for $50 a barrel when I can sell 10 million a week for $150. If this was wheat or something increasing supply might have a real impact. It's not. Add to that the fact that no matter how much drilling we do in North America, we'll never be able to impact supply sufficiently to prevent OPEC from just cutting their supply to maintain pricing.

There's this common misconception that somehow drilling for oil in the US is more beneficial to US gas prices than drilling for oil in Angola. It isn't. There might be a minuscule benefit from reduced transportation costs, but it really would be tiny. End effect of maybe 3 cents per gallon of gasoline.

This whole "we need to drill" thing is misleading. It's not as if the oil found belongs to the US. The companies drilling for it will happily sell it to the Chinese if they pay more.

If you want to discuss nationalizing oil production in the US to maintain regulated pricing for the US market, I'm all for that.

Political bullsh*t aside for a moment, what's driving the oil market right now is primarily the weak dollar and increased demand from "developing nations". Many of whom, incidentally, have their currencies pegged to the US Dollar.

Oil's going to close at $140 today. The S&P is going to break through a critical support level. If oil moves to $150, which is very likely if they hold $140 through next week, we will absolutely see large arbitrage situations that will possibly break markets. We might see GM end the year with a market capitalization of under $5 billion or the like.

The Fed @#%^ed up and overreacted when they cut rates to respond to the sub-prime crisis. I said that then, and it's clear it was the case now. They ABSOLUTELY have to push rates up before we get to $160 oil or we're going to be looking a real possibility of the dollar collapsing to .5 Euros.



Edited, Jun 26th 2008 4:03pm by Smasharoo

Source? Every single "expert" I've heard or seen talking about this has said that it's speculation in the futures market that has accounted for most of the recent increase in oil price. It's not like the world oil demand suddenly increased by 50% over the last six months Smash.

The estimates I've heard range from a very conservative 20% up to a somewhat wild 50% of current market oil prices being purely due to speculation on oil futures. Unless you've got some sources or cite to show otherwise, I'm not sure how anyone can take your conclusions seriously. You're flatly denying a core assumption about the current oil market, but without providing any reasoning or evidence to support that denial.

Edited, Jun 27th 2008 7:44pm by gbaji

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Don't change the subject. We can have that debate later if you wish. Right now, I'd like to know what fairy tale you're repeating to think that oil future speculation isn't affecting current oil prices, when virtually ever economist in the world believes the exact opposite.

Strange, since Your guy Obama seems to think they do



Of course, the Obama response is to simply crack down on the speculators, but that's a whole different issue. The point is that this is hardly the first source I've read that 20-30% figure (the most commonly quoted range btw). As I've said in this thread (and a couple others we've had recently), most sources use that same 20%-30% figure, with some going as high as 50% (Not sure how much weight I put in that figure, but I've seen it).

The difference is what to do about it. I've really not heard much debate on whether this is actually happening.

Edited, Jun 27th 2008 8:37pm by gbaji