The Not-So-Great Energy Debate
To drill or not to drill -- that is the question. More precisely, that's the question that has set the terms of the debate on whether to lift the ban on oil exploration in the Outer Continental Shelf (OCS) and ANWR. It's also exactly the question the oil companies and their political proxies want us to debate. The fact that those of us who'd like to protect the ban have accommodated them is extremely unfortunate because it's the wrong question.
You see, big oil et al are not really the "drill" team; it's just a land grab, orchestrated while they still have friends in very high places. And it won't do a damn thing to the price of gas at the pump, certainly not in your aged granny's lifetime, and probably not in yours either.
If the oil companies wanted to drill for new oil, they could easily do so right now on the millions of acres of land currently available to them for leasing. As Joseph Romm, editor of the Climate Progress blog pointed out to me, there are thought to be 34 billion barrels of undiscovered oil under lands currently open to drilling, multiple times the amount that might be under the OCS or ANWR.
While big oil demonstrably has no pressing urge to drill, they very much want to lock down access to more leasable lands. What with those crazy leaders running around Russia and South America nationalizing the energy sector, and crazier environmentalists running around this country supporting bans and moratoria, the share of land in which American Big Oil Inc can poke holes is shrinking. And they'd like to close the deal before Bush/Cheney leave the building.
Isn't this just rhetoric? Even if they really plan to take their time about it, if at some point down the road they try to find more oil, what's wrong with the "drill" mantra? And why should those of us on the other side of the debate stress the "lease" point?
Because our only hope of turning this debate around, and it's a thin reed, is to convince the public that lifting the moratorium today would not affect prices at the pump tomorrow (or probably ever, according the EIA--see the blog link above). We can't get them to change their rhetoric from "drill, drill, drill," as Larry Kudlow regales me with regularly, to "lease, lease, lease." But we want to do everything we can to educate the public such that when big oil says "drill," we all hear "lease."
The reason this is so critical is because our only hope of winning this debate may lie in helping people to unconnect the dots between lifting the moratorium and the price of gas. Yes, it's hard to convince folks that drilling today won't lower prices tomorrow. But how about NOT drilling today? Because that's what we're talking about here.
The stakes are very high. Sources on Capitol Hill tell me that the only thing holding the line on the bans right now is Pelosi's ability to block the vote. With the R's pressing this as their sole issue, and the majority of the public solidly in the "lift the ban" camp, she may not be able to control this one, and sources tell me if it comes to a vote, the ban is toast, certainly on the OCS and maybe ANWR too.
If that does occur, our best move may be to go for something like the "gang of 10" compromise. That's a bipartisan group of 10 Senators who propose a limited expansion of OCS leasing with a quid pro quo that both repeals a big tax break from big oil and makes them finally pay royalties they've been avoiding for drilling on public lands.
I'd go further and also hit 'em with a windfall profits tax. ExxonMobil alone cleared almost $12 billion in profits last quarter. Just because they, their lobbyists, and their political puppet troop have bamboozled the public into believing that they'll be spared from $4 a gallon gas, we're supposed to hand them the keys to the OCS and ANWR? If that's where this is headed, then I'd like to see some pretty juicy quids for any quos.
Things could change if the price falls back this month while the Congress is back in their districts, but the more likely scenario is that these pols get an earful about energy prices and come back insisting on a vote.
At that point, the only thing protecting the ban is the spine of the Democrats. Most of them have been holding the line, bless 'em, but the line will break unless public sentiment changes enough to create a lot more support for the keeping the ban intact.
Perhaps there's a rich philanthropist somewhere who cares enough about the planet to sink some serious bucks into a massive information campaign to convince the public that A) these guys don't really want to drill, they just want the leases, and B) even if they did, drilling won't bring down the price today, tomorrow, next week, or next year. Maybe next decade by a few cents...maybe not.
I know. You're thinking: silly man, you still think facts matter. Guilty as charged. I can't help it. And there's got to be a more of us? Right? Hello? Anyone out there...?
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
And there's got to be a more of us? Right? Hello? Anyone out there...?
..........
There are, theres plenty of us that do, the problem is, like me i believe most of us that do care have no money to help because we are getting our Ash Wholes kicked by the Energy companies with High Electric, High Natural Gas, and High Gasoline and High Diesel prices pulling extra hundreds and hudreds from our wallets just to survive each month.
It's our own fault as consumers for being so thick. We're getting exactly what we pay for, even if the price fluctuates "unexpectedly". If it's not clear to anyone by now that allowing this debate to be dominated by these two parties is a continuation of the status quo, then we're getting what we deserve as well.
Let them lease...bu
1) Time limits. Produce withing x months or lose the lease.
2) Pay Royalties to citizens in the states where oil is pumped as they do in Alaska. After all it is under public domain so why should private oil companies be allowed to take public property for private profite without paying us for the oil? They have to pay OPEC for oil don't they? Are we equally entitled ?
3) Require that fuel prices will factor in local cost per barrel, not the OPEC price.
4) Establish a fixed "profit margin" over cost for the fuel they sell.
TO Everyone:
Reelect NO ONE...Thro
DO NOT VOTE FOR JOHN MCCAIN....
Tell Congress that the four ideas, above, should be put into the new energy bill. Congresswoman Nancy Pelosi and Senator Harry Reed have already told the oil companies USE IT OR LOSE IT....But the legislation needs to be passed and enforced.
If you are fed up with $4.00 a gallon gas, Go To:
http://www
AND SIGN THE PETITION
OBAMA 08
1. Oil companies do buy leases with fixed terms, they are called primary terms. Produce within X mos is impossible, it takes years to develop a prospect to the pt of drilling, by the way the lease terms is are for 5 or 10 years depending on water depth, with annual rentals paid during the term of the lease.
2. Pay royalties to the citizens in the states where oil is pumped asthey do in Alaska- the problem isthe Federal OCS belongs to all 50 states. No companies take oil without paying for it.
3. Require that fuel prices will factor in local cost per bbl, not the OPEC share. Oil is a world commodity, the cost of crude is the biggest single determinant in the gasoline price. How can the refiner get crude cheaper that the mkt price?
4. Establish a fixed "profit margin" over the cost for the fule they sell- whatdo you suggest that should be- the pennies on a gallon too much?
Agreed. You have elucidated this end of the dichotomy - there is another possible end to this. The outcome of this election for the oil industry will determine the course of action for this current drilling dilemma, Here is why. We have been conditioned by big oil to believe that we could not do without oil, and that the day when oil dries up will be like Armageddon. This just isn't so. Things have always changed and one day soon we will discover we were never reliant on oil. It was something that fit the times being convenient for use and readily available. Folks in the oil company know that oil will not be able to compete with wind and solar should manufacturing costs of wind and solar continue to fall - hence, the move by Pickens to wind and solar. This leads to the great change. For oil, the greater the demand the higher the price. For wind and solar, demand spurs development and lower manufacturing costs and hence the greater the demand the LOWER the costs. Incredible demand from India, China brings the demise of oil.
The other outcome for oil companies is diversification. When tobacco took a big downturn the tobacco companies began moving into other products. Thus, there would be a land grab and/or an industry grab. This election determines when the oil downturn will happen. Will we milk planet Earth of every drop of oil it possesses?
I totally agree with Mr. Bernstein. I would add only two things. First, don't sell the American public short. Many know that this new fervor for offshore oil drilling is all about the money and friends of Bush and Cheney who are already making money from oil profits in the Middle East. Second, if the Republicans can convince Americans of the need for offshore oil drilling, the so called war in Iraq could quickly end because the real reason we are there is because of the oil. Halliburton and others could then come home and get more illegal contracts which will surely be handed out again to those in favor.
Another factor one must take into consideration (when assessing the reason for high gasoline prices) is the effect of deficit spending on the economy. Right now, the dollar is weaker than it has ever been in its history. The reason for this disparity is the unprecedented / unparalleled amount of deficit spending the government has undertaken. In order to spend money it does not have the government must borrow money. The more money we borrow the more the value of the dollar depreciates. Why are we borrowing so much money right now? To allay the 2 billion dollar per week cost for the war in Iraq – which we should never have been involved with in the first place. If you lived in a house and neighbor “A” who lived on your left came over and sucker-punched you in the face, would you sucker punch neighbor “B” (who lives on your right) to get back at neighbor “A”? Of course not! It is a non sequitur. So was our invasion / occupation of Iraq. We should have concentrated all elements on Afghanistan. That was a major blunder on the Bush administration's part. You want to lower gas prices? Then let's get out of Iraq and put an end to this deficit spending. The stronger the dollar is the fewer dollars it takes to purchase a barrel of oil.
Here is the problem: people like Sean Hannity, Bill O'Reilly, and Rush Limbaugh use the “politics of loud” to convert free thinkers into “sheep” to be herded in their flock. Their tried and true technique: yelling. The louder the better. Their vociferousness gets ordinary people to listen; thinking that if they are yelling about something – they must be upset about something, and if they are upset enough to yell, then it must be the truth. Hannity, O'Reilly, and Limbaugh would label themselves purveyors of truth, when in reality they are merely promoting the conservative agenda. Case in point: belief about the (lack of) damage done during Hurricanes Katrina and Rita. here they have three classifications of Spills: Minor (1-1,000 barrels) Medium (1,000 – 2,000 barrels) and Major (anything over 2,000 barrels). This is conducted on a per rig basis – not a complete tally. So what happens is a conservative will take this data, note that there was no Major spills and then translate that into: not a drop spilled. This is called Spin (I would call it lying). When ordinary people start bleating the mantra “DRILL, DRILL, DRILL” they have been hoodwinked and have fallen for the conservative agenda hardcore. .
All of this hype about drill or no drill seems to come from a segemnet of our population who are stuck in a technological Jurrasic era. Wake up a see the future. It is very bright. No fossil fuels, No caro emissions. The US is the world's leading EXPORTER of renewable energy.
But, No! Let's focus on oil, gas and coal. It's the only thing we know about. It's all that commodity brokers and Cheney's energy advisors know about. To CHANGE to new forms of energy might require them to use their limited brain capacity.
Guess what, if you diddle-dick around much longer, the 30% of students studying engineering and science who are native born, will dwindle to zero in the next 20 years and the world will have to go to China and India for that expertise. What do you think the market value for them will be? We have the energy resources, they have the tallant ... you tell me. Let's convert to renewable wind and solar ASAP and we can have them both
My comments below should not be misconstrued to mean I support excessive carbon emissions. However, I wanted to point out some practical realities. . .
I would tend to disagree. Fossil fuels are still much cheaper dollar for dollar without a carbon tax. China and India are not going to be signing up for such a tax for quite some time. I don't think we're in danger of losing out on this to them yet.
While I concur that we need to do a lot to stimulate technical degree attainment here in the USA (including working to increase the number of visas for the best and brightest foreign students from around the world), I don't think proposals to mariginally increase domestic drilling are going to shoot us in the foot.
We also have unprecendented opportunities to export our fossil fuel expertise throughout the world (bringing tax dollars back to the US and opening up growth opportunities for domestic oil and gas and service companies). Current oil prices make upstream oil development very attractive for any country with reserves of some kind. Also, the growth of the global auto market mean refinery expansion throughout the globe.
Also, I recruit for an oil and gas company. Every other student I talk to wants to hear what we do with alternative energy. I think we have more enthusiasm out there from domestic science and engineering students than opportunities. I hope the next President can get open up some more opportunities for us in
so you claim to be against carbon emissions and yet you support the proliferation of a technology that is the main source of carbon emissions? that makes your arguments very compelling.
anyways, you said it. marginally. the risk to the environment does not even begin to outway the benefit of offshore drilling. the oil in those wells won't even be available to us for another 17 years, and by that time if we really need that oil than we're screwed anyways, considering it's barely a drop in the bucket compared to the oil already available to us.
not to mention the fact that we had better be well on our way with renewable energy sources by then.
What if the Democratic congress were to give out some new leases ONLY to NEW companies? They could pick out a few of the most coveted oil rich lands the top 10 corporations are after and freeze out the exxonl/mobil, chevron, etc. Big Oil executives and only give them to smaller, more America friendly businesses. GOP mouth pieces would be silenced because the "drill, drill, drill" crowd would lose their cause. Drilling would be started and the big shots would lose big time.
The Republican leaders would go balistic. They would not only lose their talking points, but at the same time, they would reverse their cry for drilling so fast you would be speechless.
Will you subsidize me to make a new oil company oil company? Will you pay gas statiosn to switch to my brand of fuel?
I am untainted with any knowledge of what it takes to find oil, refine it, distribute it and market it. I am simon pure, so I must be thae absolute best person to get oil.
The enxt step is to let me design airplanes for you to fly in. Boeing has way to much business.
What does "America" friendly mean? Exxon employs tens of thousands of Americans, pays stock dividends to millions of Americans, and pays $ billions in US tax dollars each year.
Also, in my experience, smaller companies cannot afford to operate with nearly as much care for the environment and for safety as the major oil companies. Imagine if you Joe and Jan Oil Company. If you cut a few corners, you might risk getting caught, and if you don't the pay off may be pretty big in proportion to the lower amount of capital you have to put up to do things the way you should. If you're Exxon, you can't cut corners everywhere and expect to not make a mistake somewhere. And when you make a mistake, you bet the public will be knocking on your door (regardless of court settlement results, oil in the water is not good for Exxon's bottom line). As a result, Exxon can afford, and it is in their best interest to be overly safe and overly cautious when it comes to environmental matters.
The gov't does not "give out" leases. They are competitively bid. So you somehow disqualify existing companies who have the technical expertise and wherewithal to drill for, find and produce hydrocarbons in favor of non-existent "new" companies without the technical expertise and financial wherewithal to do the job. You think this somehow makes sense?
You don't know just whole about the subject do you?
"Anyone out there...?"
me, but I'm lonely. Thanks for pointing out the truth on this confusing issue.
As long as there are fines and criminal prosecution for dealing with Iran (who has 15% to 17% of the known reserves), we will not have lower energy prices. But any American oil company that invests over $20 million in Iran is subject to both of the above.
Everyone here that doesn't buy into the drill for more oil crap should write letters to Pelosi and their senators and representatives and let them know there are plenty of voters who support holding the line. Word your letters to reflect that they should not be responding to an ignorant public that doesn't have a clue to the issues but the the better informed public that has rw=easons that will withstand the test of time.
The currently supportive group for change will recognize both caving in and steadfast support for what it is, I believe democrats will be far better off bucking ignorant public support in favor of well informed opposition to big money pressures.
Along with the backbone I'm talking about is the need for impeachment of Bush and Cheney on the cut and dried refusals to support and respond to constitutional requirements to respond to oversight actions. Democrats don't seem to get that we want aggressive oversight and accountability changes. Without an impeachment they are approving abusive executive privelege claims by failure to defend the constitution. Future breaches will be defended by proof of a past administration not being held accountable.
Yes i think there are 25% of you that want to "hold the Line" while there are 75% of "us" that want to "drill for more oil crap".
I think that the idea of land grabbing is accurate and not without precedent. During the 1800s when the transcontinental railroad line was being built by the two large rail companies, the U.S Government awarded a contract to the two rail companies that not only gave them Thousands of dollars in subsidies but at least 33 million acres of public land. This essentially made them wealthy. These lands were in future years used for exploiting mineral assets as well as lumber. Those lands that they wanted to sell so as to establish communities alongside the rail lines sold to pioneers for whatever they could get for them. In addition it benefitted the rail companies financially to encourage growth alongside their railways . In essence they were able to make themselves richer at the publics expense. This is what the oil companies would like to do too.
Ok, let's see here, we have an energy crisis, an economy in decline, a balooning trade deficit, an increasing national security threat and you think the oil comapnies are lining up for a land grab which somehow relates to the railroad companies in the 1800's. Forgive me but I do not see the connection.
Oil companies buy leases to explore, they do not buy them for amusement. If you have some special insight as to why companies would spend millions of dollars on leases in order to not drill wells I am sure we would all be greatly illuminated.
To the Republican dimwits who insist that it's all about the fact that liberals won't let them drill and had Clinton done so earlier we wouldn't be in this fix, let me just say this.
One, our economic problems today stem from George Bush having started this war. This war has had a major impact on causing our gas price surge. We are in this fix because of this Republican administration and nobody else. Now you can try to pin it on Democrats or Liberals (I am a liberal Progressive but not a Democrat) but it just won't fly. Your guys are either one of two things, failures and incompetents or they are schemers. which one is it? Your choice.
The second most truthful thread running through these comments is that it is difficult to get down to the factual informatio
A good source is the government regulators. I work offshore in the Gulf of Mexico, and I can assure you that we are strictly regulated and that misreporting spills is not tolerated.
MMS, main regulator for safety, spills, permitting, etc. has a great website with lots of information. In addition to regulating industry safety, they employ marine biologists who ensure the safety of marine mammals, and geologists who ensure the safety of chemosynthetic communities around thermal vents in the ocean floor.
http://www
Another good source is the NRC. Their website is not as friendly, and it takes some digging to get down to spill reports specifically related to Upstream oil production.
http://www
However, it is important to note that in the Gulf of Mexico we report spill volumes out to the ten thousandth of a barrel. This results in a lot of reporting, and we do our best to learn from each incident to prevent similar things from happening in the future. The oil field is made up of real people, with morals, who by and large have a tremendous amount of respect for the environment they work in.
I'm skeptical of the Dem claims because my family has actually leased mineral rights to production companies twice, and I have a little knowledge of how some of these leases work. (BTW, they never found oil or gas in economically recoverable amounts, but we made a lot of money off the leases.)
If the Dems want to convince me of their argument, they'll get some GIS poeple together and work up some maps of all the acreage they're talking about. I want to see detailed maps with info about the nature and status of the various leases, and the underlying geology.
The Dems are blowing smoke, and they're depending on the ignorance of the general public on how these things work.
As part of the "unused" leases talking pts, the politicos are asking for information from the larger oil companies as to exactly what they are doing with the millions of acres of "unused" leases. THis information is being provided in detail as to numbers of leases, acreage under lease, daily production, wells drilled, seismic purchased, exploration budgets, future plans, etc. You have not (and will not) seen a "do over" by the Dems where they re tract their talking points. They would much rather make un substantied claims to flame the political flames than let the truth ever come out.
You must be logged in to comment. Log in or connect with
