Oil Company Myths - Page 3 - Tilted Forum Project Discussion Community

aceventura3 · 09-12-2008, 08:22 AM

Quote:

Originally Posted by dc_dux

A recent report to Congress from the Energy Information Administration suggests that ending the drilling moratorium on the Outer Continental Shelf (OCS) would have an insignficant impact on the price on domestic crude production or prices before 2030:

IMO, a better way to reduce the cost before 2030 would be to lower demand through conservation and conversion to alternatives.

I don't dispute the finding above or the idea of reducing demand for oil through conservation and alternative. However, I think we can send a clear message to oil producing nations and minimize wild price fluctuation by committing to drilling now. I like the "all of the above" approach.

dc_dux · 09-12-2008, 08:34 AM

Quote:

Originally Posted by aceventura3

I don't dispute the finding above or the idea of reducing demand for oil through conservation and alternative. However, I think we can send a clear message to oil producing nations and minimize wild price fluctuation by committing to drilling now. I like the "all of the above" approach.

So why dont these facts "send a clear message" by committing to drilling now on current leasehold:

Between 1997 and 2007, drilling permits for oil and gas on public lands increased more than 361%

Since 2004, BLM has issues 28,776 permits to drill on public lands

Offshore, only 10.5 million of the 44 million leased acres are currently producting oil or gas

Combined, oil and gas companies hold leases to nearly 68 million acres of land that are not producing oil and gas....but could produce 4.8 million barrels of oil a day and could cut imports by nearly a third

Majority Report of the House Committee on Natural Resources (pdf)

I'm just tyring to understand why we need to open up more areas for drilling..when millions of on and offshore acres are already permitted and leased but not under production.
-----Added 12/9/2008 at 12 : 47 : 29-----

IMO....Psycho-babble

YouTube - President Bush: Drilling Will "Change The Psychology"

YouTube - President Bush: Drilling Will "Change The Psychology"

Baraka_Guru · 09-12-2008, 09:02 AM

Wait a minute. Aren't they saying the market is oversupplied? Isn't this why the prices may have fallen recently? Further oversupplying the market will drive prices down to far, making drilling, extraction, and refinement financially unviable. One reason why we're in such a mess with price is because it's getting more expensive to get the oil in the first place. And now we're talking about trying to get more from new sources when the market's oversupplied? Bad idea.

roachboy · 09-12-2008, 09:11 AM

i don't think the drill baby drill mantra operates in any rational connection to the state of the oil market past present or future. it is more about an illusion of control over oil markets which plays on the kind of nationalism that the right mobilizes when it comes to things like "the war on terror" and ignores when it comes to things like the trans-nationalization of industrial production---in other words, it is an example of an instrumentalized nationalism which uses oil as a signifier. as an instrumentalized term, a tactic, it links to other things---the notion of being-persecuted by some phantom Left, in this case the Evil Environmentalists who seem at times to lurk about populist rightwing discourse the way the black helicopters lurk around the fever-dream world of the militia set---signifiers which condense anxiety about loss of control and which direct it toward a semi-definite Other and so serve a therapeutic effect. the Evil Environmentalist is understood to think less of the petit bourgeois american's "right" to tool about in an enormous 10 mog pickup or suv or maxivan than he or she does of animals far away-----and in this there is another index of percieved (or manufactured, depending on your viewpoint) victimization--which emerges pretty obviously in the obsession with drilling in anwar in the face of all reason, and in particular in the "drill baby drill, petro inferno" slogan at the rnc, which i thought a kind of genius creation insofar as it allowed you to peer into the strange but seemingly endless tunnel of conservative resentment.

similarly, i don't think this thread is about oil at all, really: the data is not systematic, there is no effort to actually talk about the international petroleum market or system and there's no need for it, given how the thread is framed.

just saying.

Baraka_Guru · 11-12-2008, 10:20 AM

If you've tapped into the media lately, you'll get an interesting picture.

Oil's dipped to as low as $59 recently, and now you have the IEA giving another peak oil scenario: There will be a supply crunch because of forecasted demand increases and the fact that cheap oil will discourage companies from making new investments.

This is what global economic meltdowns do: they twist and turn in on themselves and create environments where potential economic growth is stunted. This is why I believe governments should play a role in these things. They need to open up their coffers and offer incentives to companies to ensure supply doesn't become a problem.

An alternative would be to hit a brick wall.

Fun times.

aceventura3 · 11-12-2008, 11:40 AM

In my life time oil prices have followed a consistent pattern and the foundation is supply and demand. Given those two factors when supply is impacted in a negative way prices go up and when demand is peaking prices go up. Given the clear pattern our nation should have a clear energy policy that is consistent through changes in supply and demand. Generally we exploit prices when they are low and take low prices for granted and we panic when prices are high. When prices are high we try a number of quick fixes and we generally fail to follow through. This pattern has been true since the early 1970's. In my view we should develop our own sources of oil to the highest degree possible, develop cost efficient alternatives, and engage in policies that encourage stability in supply and demand. Given the length of time it takes from exploration to production we need to make sure capacity is available when needed. When demand begins to peak after the economy recovers and supply/demand is at a fine balance, having the additional capacity our own drilling can provide, may make the difference between normal pricing and speculative pricing in the market. A sound energy policy based on the above is not psycho-babble or political paranoia.

sapiens · 11-12-2008, 11:51 AM

Quote:

Originally Posted by aceventura3

...having the additional capacity our own drilling can provide, may make the difference between normal pricing and speculative pricing in the market.

My understanding is that "our own drilling" usually involves oil companies selling the oil extracted from American soil on the international petroleum market, resulting in very little if any effect on oil prices for Americans.

aceventura3 · 11-12-2008, 12:14 PM

Oil is a commodity. A drop of oil is a drop of oil in the world market for oil. There are a few subtleties, for example some types of oil require a specific type of refining capacity that may be concentrated in certain areas. but outside of that fact, like I said above we need a consistent policy regardless of the current price. When demand is peaking any issue with supply can trigger an "explosion" in price. When the market is on that margin, smaller amounts of marginal production can prevent that "explosion" in price.

Keep in mind that I am not talking about financial speculators, but for example if you are an industry that needs 100 million barrels of oil, and you fear that the supply is going to be disrupted in the future or that prices will be 50% higher in the future, what do you do? You try to lock in your supply. How much over current real market price are you willing to spend for that "insurance"? If the market is stable and you anticipate stability, the premium you would pay for that "insurance" would be less or zero.

dc_dux · 11-12-2008, 03:27 PM

One of Bush last EOs that I hope Obama quickly overturns is the one that will authorized the BLM to open up thousands of new acres to oil and gas drilling in the most sensitive areas in Utah adjacent to the Canyonlands National Park and Moab desert and close to the Grand Canyon....particularly when there are already millions of acres of public land in Utah already under lease.

It was one final bone thrown to his oil buddies and it will have little or no impact on the price of a barrel of oil.
-----Added 12/11/2008 at 06 : 32 : 09-----

Do we really need to "drill baby drill" here:

Bureau Proposes Opening Up Utah Wilderness to Drilling - washingtonpost.com

ASU2003 · 11-12-2008, 04:09 PM

Quote:

Originally Posted by aceventura3

Oil is a commodity. A drop of oil is a drop of oil in the world market for oil. There are a few subtleties, for example some types of oil require a specific type of refining capacity that may be concentrated in certain areas. but outside of that fact, like I said above we need a consistent policy regardless of the current price. When demand is peaking any issue with supply can trigger an "explosion" in price. When the market is on that margin, smaller amounts of marginal production can prevent that "explosion" in price.

Keep in mind that I am not talking about financial speculators, but for example if you are an industry that needs 100 million barrels of oil, and you fear that the supply is going to be disrupted in the future or that prices will be 50% higher in the future, what do you do? You try to lock in your supply. How much over current real market price are you willing to spend for that "insurance"? If the market is stable and you anticipate stability, the premium you would pay for that "insurance" would be less or zero.

The price may factor in the contracts that big consumers (airlines/power companies, etc...) will lock their rates in at and will pay a known price today if they are afraid of it going up higher next month.

But, I see no real fluctuation in demand to warrant the price swing over the last few months and the profits the oil companies made because of it. I don't see 20 million electric cars or 5 million bicyclists out there not using gas now to cause demand to fall. There are just as many airlines in the sky now as last summer, and people haven't started to take mass transit and carpool in big enough numbers to justify the 'lower demand' the media is talking about. Maybe the lower demand from big banks because they aren't investing in oil anymore is causing it...

I'm sure all the free market people will get upset, but if oil was a product sold at a set price that rarely changed, but attempted to match real world demand and actual supply, it would work out better for consumers. You would cut out the middle man who doesn't do anything but wants the price to go up, and if they buy up most of the oil and aren't willing to sell unless the price goes up higher, it's not a good deal for the consumer or other businesses. The thing is that there may be gas shortages if the gas companies set the price instead of the market and the people who are willing to pay 5, 6, 7 dollars a gallon might not be able to get it.

aceventura3 · 11-13-2008, 09:01 AM

Quote:

Originally Posted by dc_dux

....particularly when there are already millions of acres of public land in Utah already under lease.

Why do you ignore the complexity of the issue? Why do you seem to assume every acre under lease is capable of efficiently producing oil? Why do you seem to assume that leased land without an oil derrick is not being explored?

If you were an oil company and there is land under lease at spot "A" that costs $x dollars to develop but risk/reward ratio is less than land at spot "B" and you have limited capital to invest - where would you put your money?

There are hundreds of issues like this that can be put on the table, yet you don't seem to consider them. In addition the foot print of modern drilling is very different from the days of having what amounted to oil derrick fields. An oil company could drill in areas and people would not give it a second thought with the pristine character of natural areas maintained.
-----Added 13/11/2008 at 12 : 13 : 39-----

Quote:

Originally Posted by ASU2003

But, I see no real fluctuation in demand to warrant the price swing over the last few months and the profits the oil companies made because of it.

Perhaps some one is going to issue a formal study on the price fluctuations over the past 2 years to give us a more detailed understanding of what happened. It seems Congress's primary concern were financial speculator (They were not the cause of the spike in price) and oil company profits and CEO salaries. However, there is a fundamental price for oil (cost of production, plus reasonable profit), and then there are risk premiums built into the price. Secondarily, there is demand, which also affects price. Perhaps, there was a "perfect storm" in these factors that drove prices up and now there is a near "perfect storm" driving prices down.

Quote:

I'm sure all the free market people will get upset, but if oil was a product sold at a set price that rarely changed, but attempted to match real world demand and actual supply, it would work out better for consumers. You would cut out the middle man who doesn't do anything but wants the price to go up, and if they buy up most of the oil and aren't willing to sell unless the price goes up higher, it's not a good deal for the consumer or other businesses. The thing is that there may be gas shortages if the gas companies set the price instead of the market and the people who are willing to pay 5, 6, 7 dollars a gallon might not be able to get it.

We have been living with OPEC for decades as they try to set the price for oil. they have an impact but can not set the price. No entity or government can do it. Also, when we look at the actions of OPEC, they don't always want the prices to go up, in many circumstances they try to balance maximizing their income over the long-run, while keeping a lock on the market. If prices are too high, alternatives become more cost effective - that is bad for their business.

dc_dux · 11-14-2008, 05:16 AM

Quote:

Originally Posted by aceventura3

Why do you ignore the complexity of the issue? Why do you seem to assume every acre under lease is capable of efficiently producing oil? Why do you seem to assume that leased land without an oil derrick is not being explored?

ace....perhaps I should use your preferred method of simplistic analogies.

Instead, I'll just share a video of Utah's Nine Mile Canyon, home to one of the most important and extensive collections of prehistoric rock art panels in the world.

YouTube - Utah's Nine Mile Canyon is at Risk

You dont think increasing industrial traffic by over 400% alone might adversely impact these priceless treasures in a federally protected historic preservation area?

If you want to talk about the complexity of the issue...it is more than just oil derricks.

The fact is that BLM is bypassing environmental reviews by using a loophole in the '05 energy bill to get quick approval before a change in administration. The GAO is investigating why the Bush BLM has waived environmental review procedures nearly 500 times for oil and gas project in Utah alone last year.
-----Added 14/11/2008 at 08 : 24 : 49-----

Quote:

Congressional investigators are looking at a federal government agency's quick approvals for oil and gas drilling in Utah, a development applauded by environmental groups but condemned by industry executives as political posturing.

Two Government Accountability Office investigators are in Utah as part of a probe into the federal Bureau of Land Management's practice of approving some drilling projects without a full environmental study of the consequences.

The practice, authorized by the 2005 Energy Act, has been used thousands of times in Utah, New Mexico and Wyoming, said GAO officials.

On Tuesday, investigators visited eastern Utah's Nine Mile Canyon, where three environmental groups are fighting plans by Denver-based Bill Barrett Corp. to drill more than 800 new gas wells in the area.

The canyon is home to thousands of panels of rock art created by Native Americans some 1,000 years ago.

The groups argue that a chemical used to keep down dust from truck traffic corrodes the art panels. The Bill Barrett Corp. denies that it has harmed any panels, but says it's testing less abrasive chemicals.

In August, the Southern Utah Wilderness Alliance, the Nine Mile Canyon Coalition and The Wilderness Society sued to block government approval for the first 30 of Bill Barrett Corp.'s wells on a plateau above Nine Mile Canyon.

The wells were approved by the BLM under a "categorical exclusion" provision, which allows certain projects to move ahead without an in-depth examination of potential environmental impacts.

"We just follow the policy that's been established. I don't feel we've inappropriately used any categorical exclusions," said Mike Stiewig, a BLM field manager.

"The larger question has to do with the policy issues, which are way above the chain from me," he said Tuesday. "I don't make the rules, I just live by them."

The GAO investigators were expected on Wednesday to visit a Utah BLM office that has waived environmental scrutiny 491 times in fiscal year 2007 for oil and gas projects. Bill Stringer, the field manager at that office, didn't return a phone message left by The Associated Press. Nor did field managers in Wyoming and New Mexico.

"When it comes to those exclusions, we're confident we applied them correctly," said Megan Crandall, a spokeswoman for BLM operations in Utah.

A staff lawyer for the Southern Utah Wilderness Alliance counters that the bureau and the industry has treated the exclusions as a loophole in environmental regulation.

"Congress established categorical exclusions to streamline the process, not to eviscerate it, but that's how the Bush administration has interpreted it," attorney Stephen Bloch said Tuesday. "We certainly think there are some abuses happening, and we're pleased GAO is going to look into it."

The House Natural Resources Committee and its Subcommittee on Energy and Mineral Resources requested the GAO investigation. Both are chaired by Democrats.

An executive for Bill Barrett Corp. called the inquiry "political grandstanding" by the congressional panels.

"You have a couple of congressmen that know little to nothing about oil and gas and even less about public land management ordering an investigation into categorical exclusions by an agency that knows less than nothing about oil and gas and public lands management," said Duane Zavadil, the company's vice president for government affairs.

The company expects to receive government approval by year's end for the 800-plus gas wells.

GAO opens probe into gas, oil drilling in Utah

aceventura3 · 11-14-2008, 07:00 AM

The above is interesting but I don't know where you want the information to lead us regarding a national energy policy. If you want all new domestic oil production/exploration stopped because of what may be inadequate regulation, I don't agree. Understand that I am not a person who suggests that there be no regulation or consideration for the environment. I think we can develop our oil resources and be good stewards of the environment. I would be the first to agree that an oil company will exploit loop holes and take short-cuts if they can get away with them, that is why I think we need to thoroughly understand the issues from both points of view.

09-12-2008, 09:02 AM	#83 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Wait a minute. Aren't they saying the market is oversupplied? Isn't this why the prices may have fallen recently? Further oversupplying the market will drive prices down to far, making drilling, extraction, and refinement financially unviable. One reason why we're in such a mess with price is because it's getting more expensive to get the oil in the first place. And now we're talking about trying to get more from new sources when the market's oversupplied? Bad idea. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

09-12-2008, 09:11 AM	#84 (permalink)
roachboy Super Moderator Location: essex ma	i don't think the drill baby drill mantra operates in any rational connection to the state of the oil market past present or future. it is more about an illusion of control over oil markets which plays on the kind of nationalism that the right mobilizes when it comes to things like "the war on terror" and ignores when it comes to things like the trans-nationalization of industrial production---in other words, it is an example of an instrumentalized nationalism which uses oil as a signifier. as an instrumentalized term, a tactic, it links to other things---the notion of being-persecuted by some phantom Left, in this case the Evil Environmentalists who seem at times to lurk about populist rightwing discourse the way the black helicopters lurk around the fever-dream world of the militia set---signifiers which condense anxiety about loss of control and which direct it toward a semi-definite Other and so serve a therapeutic effect. the Evil Environmentalist is understood to think less of the petit bourgeois american's "right" to tool about in an enormous 10 mog pickup or suv or maxivan than he or she does of animals far away-----and in this there is another index of percieved (or manufactured, depending on your viewpoint) victimization--which emerges pretty obviously in the obsession with drilling in anwar in the face of all reason, and in particular in the "drill baby drill, petro inferno" slogan at the rnc, which i thought a kind of genius creation insofar as it allowed you to peer into the strange but seemingly endless tunnel of conservative resentment. similarly, i don't think this thread is about oil at all, really: the data is not systematic, there is no effort to actually talk about the international petroleum market or system and there's no need for it, given how the thread is framed. just saying. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

11-12-2008, 10:20 AM	#85 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	If you've tapped into the media lately, you'll get an interesting picture. Oil's dipped to as low as $59 recently, and now you have the IEA giving another peak oil scenario: There will be a supply crunch because of forecasted demand increases and the fact that cheap oil will discourage companies from making new investments. This is what global economic meltdowns do: they twist and turn in on themselves and create environments where potential economic growth is stunted. This is why I believe governments should play a role in these things. They need to open up their coffers and offer incentives to companies to ensure supply doesn't become a problem. An alternative would be to hit a brick wall. Fun times. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

11-12-2008, 11:40 AM	#86 (permalink)
aceventura3 Junkie Location: Ventura County	In my life time oil prices have followed a consistent pattern and the foundation is supply and demand. Given those two factors when supply is impacted in a negative way prices go up and when demand is peaking prices go up. Given the clear pattern our nation should have a clear energy policy that is consistent through changes in supply and demand. Generally we exploit prices when they are low and take low prices for granted and we panic when prices are high. When prices are high we try a number of quick fixes and we generally fail to follow through. This pattern has been true since the early 1970's. In my view we should develop our own sources of oil to the highest degree possible, develop cost efficient alternatives, and engage in policies that encourage stability in supply and demand. Given the length of time it takes from exploration to production we need to make sure capacity is available when needed. When demand begins to peak after the economy recovers and supply/demand is at a fine balance, having the additional capacity our own drilling can provide, may make the difference between normal pricing and speculative pricing in the market. A sound energy policy based on the above is not psycho-babble or political paranoia. __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers." Last edited by aceventura3; 11-12-2008 at 11:43 AM..

11-12-2008, 12:14 PM	#88 (permalink)
aceventura3 Junkie Location: Ventura County	Oil is a commodity. A drop of oil is a drop of oil in the world market for oil. There are a few subtleties, for example some types of oil require a specific type of refining capacity that may be concentrated in certain areas. but outside of that fact, like I said above we need a consistent policy regardless of the current price. When demand is peaking any issue with supply can trigger an "explosion" in price. When the market is on that margin, smaller amounts of marginal production can prevent that "explosion" in price. Keep in mind that I am not talking about financial speculators, but for example if you are an industry that needs 100 million barrels of oil, and you fear that the supply is going to be disrupted in the future or that prices will be 50% higher in the future, what do you do? You try to lock in your supply. How much over current real market price are you willing to spend for that "insurance"? If the market is stable and you anticipate stability, the premium you would pay for that "insurance" would be less or zero. __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

11-12-2008, 03:27 PM	#89 (permalink)
dc_dux Location: Washington DC	One of Bush last EOs that I hope Obama quickly overturns is the one that will authorized the BLM to open up thousands of new acres to oil and gas drilling in the most sensitive areas in Utah adjacent to the Canyonlands National Park and Moab desert and close to the Grand Canyon....particularly when there are already millions of acres of public land in Utah already under lease. It was one final bone thrown to his oil buddies and it will have little or no impact on the price of a barrel of oil. -----Added 12/11/2008 at 06 : 32 : 09----- Do we really need to "drill baby drill" here: Bureau Proposes Opening Up Utah Wilderness to Drilling - washingtonpost.com __________________ "The perfect is the enemy of the good." ~ Voltaire Last edited by dc_dux; 11-12-2008 at 03:33 PM.. Reason: Automerged Doublepost

11-14-2008, 07:00 AM	#93 (permalink)
aceventura3 Junkie Location: Ventura County	The above is interesting but I don't know where you want the information to lead us regarding a national energy policy. If you want all new domestic oil production/exploration stopped because of what may be inadequate regulation, I don't agree. Understand that I am not a person who suggests that there be no regulation or consideration for the environment. I think we can develop our oil resources and be good stewards of the environment. I would be the first to agree that an oil company will exploit loop holes and take short-cuts if they can get away with them, that is why I think we need to thoroughly understand the issues from both points of view. __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."