The Left and Oil (Reagan, gasoline, environmentalists, independent)
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Just a few years ago it was profitable to drill ANYWHERE for $30 a barrel, don't tell me costs of production have gone up more than 300% in 6 years... to the point where oil has to be at $100 just to make it worthwhile. That's just inventing extra costs where there are none.
A few years ago, $30 was worth a lot more in places that have oil than it is now. The dollar has fell considerably in recent years.
Countries that have large amounts of oil (Russia, Venezuela, Nigeria) have become much more difficult to enter for Western firms, which served to limit the access to oil supplies.
Easy oilfields have become much more exhausted in the last few years, which means that drilling at newer, more difficult ones is naturally going to be more expensive.
Just a few years ago it was profitable to drill ANYWHERE for $30 a barrel, don't tell me costs of production have gone up more than 300% in 6 years... to the point where oil has to be at $100 just to make it worthwhile. That's just inventing extra costs where there are none.
At $30 a barrel, oil companies would need to receive about 10,000 barrels, just to break even on the exploration process. Considering that about 1 in 5 drills strike oil, this means that it cost an average of $1.500,000 to find one good well, meaning at $30 a barrel, they would need to be able to retrieve about 50,000 barrels to break even. Easily doable in areas where mass supply is available, but many oil wells produce hundreds of barrels a day, meaning the rate of return at $30 would never reach the break even point.
It's too big of a jump even if you take into account all the horrible factors going against cheaper oil - the weak dollar, demand, instability. whatever....
It's too big of a jump even if you take into account all the horrible factors going against cheaper oil - the weak dollar, demand, instability. whatever....
The market determines what the jump is. How can the market be wrong?
Why is this the Democrats fault when they didn't control Congress or the Senate for so many years? Why is it that they are now to blame? Is this what passes for intelligence in America? What did the saintly Republicans do all this time? This is hardly a partisan issue.
So you're suffering because it costs more. So what. You could use less, you know. You could have easily predicted this scenario and called up your Republican politicians and had them do something about it. But, no. You're going to wait until the situation is too far gone for simple solutions and blame ANYONE who acts contrary to what you're brilliant solution is. Drilling now will not impact prices for at least five years. And during that time, I'll bet that the oil companies will pass their "increased costs" on to everyone under the guise of "We're drilling for YOU!". Think like a capitalist pig who'd kill your children for an extra buck, THEN come up with some way to combat them because that's the situation we're in. Giving them more business isn't a solution. Developing alternatives is the only choice and will require sacrifices most are uncomfortable with.
So you're suffering because it costs more. So what. You could use less, you know. You could have easily predicted this scenario and called up your Republican politicians and had them do something about it. But, no. You're going to wait until the situation is too far gone for simple solutions and blame ANYONE who acts contrary to what you're brilliant solution is. Drilling now will not impact prices for at least five years. And during that time, I'll bet that the oil companies will pass their "increased costs" on to everyone under the guise of "We're drilling for YOU!". Think like a capitalist pig who'd kill your children for an extra buck, THEN come up with some way to combat them because that's the situation we're in. Giving them more business isn't a solution. Developing alternatives is the only choice and will require sacrifices most are uncomfortable with.
Wow. All kinds of good stuff here.
1) "So you're suffering because it costs more. So what. You could use less, you know. You could have easily predicted this scenario and called up your Republican politicians and had them do something about it."
We do not see people who are simply suggesting a rational approach to a national energy situation complainng about suffering. When you look at the obligatory national news interviews about suffering at the pump why don't you suggest that the interviewer use your approach - "So what. You could use less you know".
2) "Drilling now will not impact prices for at least five years."
Not true. A decision to immediately begin taking concrete steps to drill will have an immediate affect on oil prices because that is what the futures market looks at, the future. To steal a line from Bill Clinton "It's the future stupid".
3) "Think like a capitalist pig who'd kill your children for an extra buck, THEN come up with some way to combat them because that's the situation we're in. "
No comment necessary.
4) "Giving them more business isn't a solution. Developing alternatives is the only choice and will require sacrifices most are uncomfortable with."
OK, who will be developing these alternatives? Might it be business? If not, will the congress set up wind labs to explore alternative. Listen to them. They are all qualified to understand how to develop alternatives.
Location: Sitting on a bar stool. Guinness in hand.
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Quote:
Originally Posted by UpperPeninsulaRon
4) "Giving them more business isn't a solution. Developing alternatives is the only choice and will require sacrifices most are uncomfortable with."
OK, who will be developing these alternatives? Might it be business? If not, will the congress set up wind labs to explore alternative. Listen to them. They are all qualified to understand how to develop alternatives.
Well UPR. If I'm correct most our homes and businesses are powered by coal and nuclear, not oil. So on that front I don't think we are in trouble. But driving is a much different story. I can't remember the exact number maybe you have it. But most of our oil goes into transportation. Now there was a already proven vehicle on the road in the early 1990's the EV-1. Now other than being a commuter car that EV-1 was rather useless. But then again, when do we spend a large proportion of our time and energy in our cars? That right, it's when we are commuting. So basically what I'm saying is we have the technology to make a rather large shift in consumption from oil, well at least in personal/commuter transportation. But hey maybe the plug in hybrids will help alot even if they still use a bit of gas.
Just a few years ago it was profitable to drill ANYWHERE for $30 a barrel, don't tell me costs of production have gone up more than 300% in 6 years... to the point where oil has to be at $100 just to make it worthwhile. That's just inventing extra costs where there are none.
Actually, the costs of production have indeed skyrocketed for several reasons. Enormous amounts of steel are needed to construct drilling rigs and if you look at how high the price of steel has gone recently you will get your answer. The increase in oil consumption over the last few years has also cut into the availability of the "easy to get to" oil. The result is that oil companies are forced to drill in much more difficult places. All of the drilling rigs in the world now are being used at close to maximum capacity meaning the price to use them has gone up because of lack of supply. It is also more difficult to find workers with the skills needed to operate the rigs. On average the price to produce oil may not be quite $100/barrel yet, but it is awfully close.
Well UPR. If I'm correct most our homes and businesses are powered by coal and nuclear, not oil. So on that front I don't think we are in trouble. But driving is a much different story. I can't remember the exact number maybe you have it. But most of our oil goes into transportation. Now there was a already proven vehicle on the road in the early 1990's the EV-1. Now other than being a commuter car that EV-1 was rather useless. But then again, when do we spend a large proportion of our time and energy in our cars? That right, it's when we are commuting. So basically what I'm saying is we have the technology to make a rather large shift in consumption from oil, well at least in personal/commuter transportation. But hey maybe the plug in hybrids will help alot even if they still use a bit of gas.
No disagreement here. As you said, we do have the technology to make dramatic changes. What I was writing about was a comment that seems to be pervasive in most of these discussions. That is the feeling that somehow "alternative" means giving tons of money to research feasibility studies at the university level but objecting to the reality that any group of investors willing to take a larger than average risk to form companies to do these good things should be able to look forward to a larger than average return.
The environmentalist left wants us to cut fossil fuel use period. Problem is alternatives are not ready yet. I agree we need more options, but we can't be forced to not use fossil fuels when we don't have other options. They don't realize that higher gas prices doesn't cause people to drive less, it causes people to spend less on other things such as clothes, movies, restaurants, etc, therefore devastating the consumer economy. Instead of blocking all drilling and adding a 'carbon tax' onto a gallon of gasoline as the left wants to do, a 'carbon tax' should be added to monster SUVs that currently can be tax write-offs due to a Reagan-era loophole. At the same time, reduce taxes on vehicles that get over 30 mpg.
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