News and Politics Forum

From what I understand it will take 3-5 years to begin producing if we opened up the "off limits" areas right now.  However, the knowledge that future supply will rise would help to lower the price of a barrel of oil.

Thundersnow wrote:

Ar you suggesting that the negligible increase in oil will satiate world demand?

No, that's counter to basic principles of supply and demand. Is that what you think people are suggesting when they say more oil will lower oil prices?

Thundersnow wrote:

If not then demand (if it is what is driving prices, of which I disagree) will still be out higher than supply.

Interesting.  You don't think that demand is driving up prices, but you're quick to suggest that increasing supply wouldn't lower oil prices.  So either supply and demand is wrong and doesn't work, or there's something off about you analysis.

I think it's important to keep in mind the price elasticity of oil, especially as global supply is tight.

If it's not demand driving up the price, what is it? Please don't say speculators. Please, please, please, please...

The people who explain these things to me also note that here and in Canada these areas also contain lots of natural gas.  So it isn't just oil we are keeping off limits.

Seabird wrote:

STOP IT!!! Stop it right now!!! If you type the word "negligible" one more time, I'm gonna reach through this innarweb connection and throttle you. Grrrr... Your supposition, gained through the media who in turn parrot the most common political talking points, has no understanding of the concepts of possible output, proven reserves, and recoverability with using existing technologies.

My 'supposition' is not through "media talking points". If it was it would not matter regardless as economist and oil experts contribute to those. As for your anger towards the word negligible, I understand that it is not a big 10 gallon hat Texas-style word! It therefore may be scary!

Take the Bakken Oil Shale deposits for instance. Back in 1995, the USGS surveyed the field and determined that there were about 100-150 million barrels of recoverable crude utilizing the technology of the time. During that period, oil was trading for between $10-20/barrel. The margins of oil and gas companies were razor thin and we were barely making any money. Everytime the price fell by more than $4, layoffs came. There was little to no R&D happening within the industry. That has only started ramping up within the last couple of years. I mean really ramping up.

And?

Just this past April, the USGS released a new study that show Bakken can yield as much as 4.5 billion barrels utilizing existing technology. So to recap, in the last few years, we've developed the technology to increase the Bakken Play by 400 times (Is my math correct? I suck at math.).

Some initial surveys suggest Bakken could hold as much as 500 billion barrels - almost twice what the Saudis are believed to have. $150/barrel buys a shit ton of R&D.

Quit being so dogmatic about what is possible and what isn't.

SO why tap ANWR or the Gulf?

North America has more oil and gas than Saudi Arabia and Russia combined.

EscapeVelocity wrote:

North America has more oil and gas than Saudi Arabia and Russia combined.

So let them deplete their resources, drill themselves dry.

Who's your superpower with the most reserves now eh?

I heard someone on talk radio arguing that point today, that all this was on purpose to set the world up to rely on us for resources.

Thundersnow wrote:

SO why tap ANWR or the Gulf?

Because that oil comes out of the ground ready to process...  (Read, cheaper) -- And also, to gain access for it before Russia or China angle drills into if from another location.

Besides, I'm still wondering about this natural resource haven that is ANWR.  For crying out loud, it is frozen tundra, covered with snow about 99% of the time...  Drill the crap out of it and get on with life.  Its not as if the planet is going to come to a halt if we position a few oil wells in that region of the world.   the coastal plain area is about the size of the state of Delaware for crying out loud...  The entire ANWR area is larger than 10 other states (see below).  Take a hundred acres out of that tract of land and let's go! 

For instance, Prudhoe Bay, which produces close to 25% of America's oil is less than 100 miles away.  The coexistance of oil production and wildlide is well established.  None of the dire predictions of the demise of wildlife have come to pass -- and in fact, some wildlife numbers have actually grown.



If ANWR was a state, it would be larger than 10 other states;
Size of ANWR relative to U.S. states:
1. ANWR 19.0 million acres 

Portion of ANWR permanently closed to development (Wilderness & Refuge) 17.5 million 

2. West Virginia 15.5 
3. Maryland  6.6
4. Vermont  6.1
5. New Hampshire 5.9
6. Massachusetts 5.3
7. New Jersey 4.9
8. Hawaii  4.1
9. Connecticut 3.2 
Area proposed for exploration  1.5 million
10. Delaware  1.3
11. Rhode Island .7

Last edited by glfredrick (07-03-2008 02:05 PM)

glfredrick wrote:

Thundersnow wrote:

SO why tap ANWR or the Gulf?

Because that oil comes out of the ground ready to process...  (Read, cheaper) -- And also, to gain access for it before Russia or China angle drills into if from another location.

Sea admitted that we can get viable oil from another source that is projected to be the largest deposit ever found.

Size of ANWR relative to U.S. states:
1. ANWR 19.0 million acres 

Portion of ANWR permanently closed to development (Wilderness & Refuge) 17.5 million 

2. West Virginia 15.5 
3. Maryland  6.6
4. Vermont  6.1
5. New Hampshire 5.9
6. Massachusetts 5.3
7. New Jersey 4.9
8. Hawaii  4.1
9. Connecticut 3.2 
Area proposed for exploration  1.5 million
10. Delaware  1.3
11. Rhode Island .7

What does the size of anwr have to do with anything?

Thundersnow wrote:

glfredrick wrote:

Thundersnow wrote:

SO why tap ANWR or the Gulf?

Because that oil comes out of the ground ready to process...  (Read, cheaper) -- And also, to gain access for it before Russia or China angle drills into if from another location.

Sea admitted that we can get viable oil from another source that is projected to be the largest deposit ever found.

Getting crude out of oil shale is markedly more environmentally unfriendly than your basic drilling rig, so it's not like that's a much easier path to take right now vs. drilling rigs in ANWR.

About this ANWR policy... Do we plan to move there after we've totally destroyed the lower 48? Is it a planned staging area as we wait for a move to Mars?

Yeah, okay. But then Mars, right?

I mean if Mars isn't part of the plan, I don't feel so good about using up all our resources and would likely decide not to put twin-turbos on my Excursion.

Prolly just go with a single.

Thundersnow wrote:

If demand will always outstrip supply, how do you expect the price to go down? The limiting factor currently is what people will pay, and low enough to stave off crazy govt regulation. Cost/benefit

Explain to me how increasing supply does not lower the price of a good.

Thundersnow wrote:

I am not sure how this is confusing or surprising. I thought that I had mentioned this on page one. Regardless, it is accurate. They are not "greedy" in a sense of screw everyone else, they are simply putting money where it will grow.

This is not accurate.

BUT

I would love to hear why you think people who speculate in commodity markets can set the price of the commodity.

Seabird wrote:

Um... Huh? I take exception to your use of the word "negligible" because it's just not accurate.

Not accurate in respect to this perhaps:

The fact of the matter is, we don't know how productive places like ANWR and the eastern GOM are until we actually start looking in earnest.

However, this is the opposite of what those claiming to mine anwr claim. They claim it to be the next big thing, and that it will lower prices.

It's easy for opponents of expanded E&P (exploration and production) to bandy that word around in an effort to make the risks to the environment outweigh the benefits. It's actually a standard economics concept called "diminishing returns". But like I said, it's not true or accurate.

I do not buy into diminishing returns, nor do I find it applicable in this situation. Most economics are bunk.

Do you have any idea just how large the proposed development site in ANWR is, compared to the actual region in question?

Yes.
Bakken is a viable source of supply. It may tougher, and more costly to exploit, but that is the market.

Now pay extra attention here... Even though oil is close to $150 a barrel at the moment, there is enormous fear in the industry that that price is a bubble. Not just from speculators. There are several reasons for the current prices AND SUPPLY IS CERTAINLY ONE OF THEM!!!

If there is a bubble (which this is), as you state, then we should be in no rush to exploit anwr. Supply, which you state is a factor in price, must be projected to go up at some point in the future regardless of anwr (which will lower oil prices, and is scaring the companies). The oil company is not going to exploit anwr to lower prices, deflating its returns on Bakken. Either it is necessary to lower costs (as claimed by others) or it is not as you stat here.  In short: you state that Bakken is expensive (which I have read that it is, and that it is less enviro-friendly), yet oil companies are afraid that the price of crude will drop below what they can make there. Why? If it is supply, and the price is inevitable to drop, then why tap anwr? Simply to allow certain companies to profit? (I apologize for the convoluted nature of this portion of my post. I try to be more clear in most instances, but am off to class shortly).

The fact of the matter is, no one really knows what's going on, least of all the two jackasses running for President. Matter of fact, they seem about the least informed of anyone.

This I can agree with you on. Given the vague nature of energy, we need to focus on renewables.