Offshore Drilling Comes Up Empty

As Sen. John McCain gears up to give a speech in Houston, repeating his call to lift the moratorium on most drilling off America's shores, MSNBC's First Read suggests, "McCain's call for lifting the ban could ... be seen as a pragmatic, short-term solution to high energy costs that could play well in places like Michigan..."

Pragmatic, short-term solution? Only if the media doesn't report on how little oil is off our coasts and how long it would take to get it into people's gas tanks.

Last month, I noted that President Bush's push to drill in the Arctic National Wildlife Refuge -- where an estimated 10 billion barrels of oil lie -- would only reduce the price of crude oil per barrel by about 50 cents, 17 years from now, according to Bush's own Energy Department. My colleague Isaiah just pointed me to a new Department of Energy analysis, adjusting that estimate to 75 cents.

The price of crude oil per barrel has jumped 100 dollars in the Bush Era, leading prices at the pump to more than double. Shaving the crude oil price 75 cents by 2025 amounts to no savings at the gas station.

That's what we would get for ANWR's 10 billion barrels. What about the moratorium areas off continental America's coastlines?

McCain's speech today estimates that there 21 billion barrels in the moratorium areas. That seems a touch high. The Energy Department put it at 18 billion a few years ago. Popular Mechanics reports an estimate of 19 billion.

Regardless, it's about double of what's estimated in ANWR.

So, if lifting the moratorium on most offshore drilling has double the impact on price as lifting the ANWR ban would, that's only $1.50 off the price of crude per barrel. Combined with ANWR, it's $2.25.

Again, by 2025. Again, little to no impact on the price at the pump, today or tomorrow.

Not pragmatic. Not short-term. There is simply not enough oil.

Originally posted at the Campaign for America's Future blog

Comments

[NL207]

"Not pragmatic. Not short-term. There is simply not enough oil."

This is an entirely negative, defeatist view of the oil supply problem. There ARE no short term solutions for this problem. Continued widespread governmental prohibition of exploration and production is not going to solve anything but it will deepen this crisis.

This supply crisis is entirely the product of wrong-headed government regulation of oil exploration and refining. The policies of the last 20 years have been little more than "not here,,not there, not now, and most important, not in my back yard". This is how the electricity supply crisis in California was created: decades of negligence by government stooges beholden to various special interest lobbies.

[AllenD]

From a study by the US Government's Energy Information Administration http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html

Some conclusions: "The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030."

"Although a significant volume of undiscovered, technically recoverable oil and natural gas resources is added in the OCS access case, conversion of those resources to production would require both time and money. In addition, the average field size in the Pacific and Atlantic regions tends to be smaller than the average in the Gulf of Mexico, implying that a significant portion of the additional resource would not be economically attractive to develop at the reference case prices."

[NL207]

And of course, standing idly by and doing nothing will cause these resources to NEVER have an impact on prices.

To what end did you post this information about the lengthy lead times necessary to develop new sources of petroleum? This isn't any different than developing any other new deposits of oil. The plain fact is: no new development + depletion of existing supplies = higher prices OR shortages.

[mamacat]

McCain's call to let States decide whether or not to drill offshore their land does not seem like such a big deal to me, as long as the people of the States are allowed to have their voice. In that case, there will be no change from what is going on today. The people of California overwhelmingly do not want an increase in drilling off their coast. Given that there are already many oil derricks offshore of California, and that the people just don't want anymore, McCain's statement amounts to almost a non-statement.

If put on the ballot, any move to build even more off-shore oil wells be voted down, in California and Florida.
On the other hand, any move to further increase mandated fuel economy standards for vehicles, or to remove tax subsidies for Exxon, or to radically increase alternative energy production, will be blocked in the Senate by McSame and the other Republicans.

[noneIn2008]

Depends upon the objective. If our objective is to cut consumption, no need to drill. Let the price go up and consumption will go down. Objective achieved.

[marijam]

If we don't do it, then China is going to get to it first. Do you think China is going to look out for our environment? Are you unaware that Cuba has given China rights to off-shore drilling just off the tip of Florida? With American companies, at least we would have some control over environmental considerations.

[mamacat]

The U.S. is one of the few nations left that does not have diplomatic relations with Cuba (or with Iran, for that matter), but because of that problem, it is not likely that American corporations will be allowed to negotiate contracts with the Castro brothers.

Normally, corporations would love to deal with dictators, as long as they are somewhat stable and willing to take graft. Makes it easier to rape the resources of a country, when the citizens have no power.

[noneIn2008]

China locked up vast African oil resources at $80/barrel. Travel around Africa and you'll find numerous Chinese engineers working on developing African resources for China.
China cares deeply about the environment, the economic environment of China.

[montestruc]

Why should Americans not be allowed to drill offshore? It is not like offshore drilling is not growing by leaps and bounds in other nations, and world wide construction of offshore oil rigs is not at an all time high.

Nor is is not like offshore oil pollution is a factually real issue since the '70s. Offshore oil drilling and production have been going on in the US Gulf of Mexico for ~50 years now, the pollution issues are no basically solved, and have been for a long time.

I can understand if you want to limit carbon emissions, but what penalize Americans when people all over the world are doing it.

A treaty that would require all oil coal or other fossil fuels pay for carbon offsets would be a much better approach and would deal with the issues world wide.

My take is that you seem to only care about undercutting an industry you see as being associated with Bush, but which is actually pretty diverse. That some people and firms in that industry may have profited from sweetheart deals with the Bush administration does not mean all or even most did.

[sculptor]

It's not Americans drilling for oil, it's oil companies. The oil will go to the highest bidder (i.e. China in all likelyhood.)

[montestruc]

Actually *drilling* companies/contractors drill for oil. Oil companies employ geologists and production technical people to *produce* a well once one with actual oil in it is found. Most wells drilled are dry holes. That arrangement (oil firms vs drilling firms) has been true for most of 60-70 years, as in oil companies (western ones not national outfits owned by tin horn dictator governments) divested themselves of their drilling divisions starting in the 1930s. It makes a lot more economic sense to concentrate the expertise in drilling in a drilling contractor firm and pay them by the hour or day to drill and have the expertise to find the oil in the oil company. That way oil companies can share drilling contractors w/o sharing trade secrets.

Anyway, nearly all the drilling contractors that would be drilling offshore of the USA would be American owned, and employ 90% + American employees, as would the oil companies that would own the wells and produce them and 90% + of their employees working on those wells and the pipelines and the refineries would be Americans, so yes you are screwing Americans out of a job.

[MajorKong]

"We're running out, so let's use it up faster!"

[NL207]

There are only about 2 trilion recoverable bbls in the Wyoming oil shales. That's not much, is it?

[BlackbirdHighway]

Even if there is significant oil out there, I have to ask one question that no one else seems to be asking.

Shouldn't we leave SOME oil for future generations? Is it really the god-given right of this generation to burn up every last drop of oil the Earth has provided for us, and leave absolutely nothing for our children, grandchildren and all the generations to follow?

It really bugs me that not only do people act like it IS their right to all the oil, they also seem to think they have the right to get it all dirt cheap.

We can develop alternatives. There are so many things that can be done, andwe have done almost nothing, and yet people seem to think that the only way out is more of exactly what got us into this mess.

[leduck]

i said the same thing on a different post within the last several days

i said thanks but no thanks to ksa increasing production

[UnbiasView]

We can develop alternatives but you would naive to believe that we won't need oil for the next 30-40 years. Bottom line, they aren't ready yet and never will be if we can't have a bridge to get there.

[MKJeeves]

Good point. I am hoping they will not need it , but I remember during the 70s I was hoping WE would not need it here in the future . . .

[research]

Great article!

It's faster and cheaper to pump 1 trillion dollars into wind and solar over the next 10 years to totally eliminate coal, nukes and imported oil.

http://www.huffingtonpost.com/users/profile/research

[UnbiasView]

Solar isn't the magic bullet, if you think it is you are a fool.

[leduck]

i don't like pv so much but i love themal


mirros focusing on a container of water

[KillTheMessenger]

Solar is not a magic bullet but it is the long term answer. In the short term the answer is conservation. And that bullet is actually quite magic. All you have to do is to pull the trigger. Why don't you?

[Sumocat]

The sun is the greatest source of energy in the solar system. Wind is generated by the rotation of the Earth, making it the greatest terrestrial source of energy at our disposal. Instead of chasing after shrinking sources of fire-based energy, I think we should be researching better ways to tap some of that nigh-infinite energy around us. I see nothing foolish about promoting technological advancement as a means to overcome our reliance on primitive power sources. I believe that was one of the themes of the industrial age.

[MajorKong]

It isn't the magic bullet. Neither is ANWR.

[BannedFromCommenting]

Prove your point... if you can say that to the previous poster, then back up why you think they are a fool... You are a fool for not supporting your argument. At least they linked to some research

[ObamaSupporter]

McCain and GOP forced and shoved the now failed Energy Policy upon Democrats against strong objections! Now McCain and GOP want to pretend that "New" solutions are needed and want to forget their GOP INSISTENCE to rape and pillage the Country! McCain and GOP wanted Democrats to just lay back and enjoy being raped as Big Oil pocketed record profits!

The McCain and GOP Energy Policy failure has now come home to roost and now the GOP pretends that they had nothing to do with it! McCain says "OH go drill more oil for Big Oil and everything will be OK again!" The total abject failure of the McCain GOP Energy policy must be squarely tied around McCain"s and GOP necks! It is completely OUTRAGEOUS for McCain now to ignore the blatant failed Energy Policy they insisted on and now claim in their BIZARE IMAGINATION that it must be the Democrats fault! NOT THIS TIME! McCain and the GOP ARE RESPONSIBLE FOR THIS ENERGY FAILURE AND MANY OTHERS AND MUST BE HELD ACCOUNTABLE BY THE MEDIA!

Gore and Democrats pushed hard for responsible Global Climate Change legislation to increase conservation and alternate energy efficiency and reduce oil consumption that McCain, Bush, Cheney, and GOP JUST LAUGHED AT! Now we have 500 years floods and $140 oil going to $200! The Media must hold McCain and GOP accountable and responsible for the TOTAL ABJECT FAILURE of the Energy Policy, except of course for the record BIG OIL PROFITS! FOLLOW THE MONEY!

[UnbiasView]

People are going to hold the Democrats responsible because like it or not we need oil now and for a long time into the future and they are the only ones to stand in the way.

The majority of Americans have now reached a point where they are in favor of drilling.

[ImmanuelGoldstein]

I'm not worried since it's easy to show that the available oil won't be meeting our needs 'for a long time in the future' or very long at all.

Conservation is the only way American can deal with the energy situation. We cannot drill our way out of this problem PERIOD>

[KillTheMessenger]

Looks like you will be a very sore loser comes 2009... you sound sore, already.

[ImmanuelGoldstein]

World consumption is at approx. 85 million bbl/day

ANWR reserve= max (though probably much less) 10 billion bbl2= 118 days world usage
Offshore moratorium areas =21 billion bbls= 247 days world usage

Total reserve = 365 days . Coincidentally almost exactly one year world usage.
Short answer=WE ARE RUNNING OUT OF FREAKING OIL!

[NL207]

This is a myopic view.

In actual production, ANWR would produce, at peak production in the 2025 time frame, between 780,000 and 870,000 bbls per day. The field will produce for 30 years or more. Source: http://www.freerepublic.com/focus/f-news/2021980/posts

The ANWR reserve contains a MEAN expectation value of 10.4 B bbls. Your statement to the effect it is probably much less is simply not supported by the facts. It is an outright falsehood. source: http://www.eia.doe.gov/oiaf/servicerpt/anwr/pdf/sroiaf(2008)03.pdf

[ImmanuelGoldstein]

Baloney. Page 11 of the report you quote gives a total mean resource estimate of a measly 4.2 billion barrels. Actually 10.4 billion is only the 5% probability figure. Are you even reading this stuff?

[montestruc]

"Proven Reserves" are oil that has been found and "proven".

People are still finding oil fields in the Gulf of Mexico which has been being drilled for 50 years. No one has even explored in much of the areas off limits as they were made off limits in the early days of offshore oil exploration, and it cost a lot of money to explore for oil. Probably oil can be gotten from the off-limits areas in amounts proportional to the area of the off limits areas set next to where drilling has been allowed in the Gulf of Mexico.

[leduck]

maybe there's a whole ghawar out there