Why Drill, Baby, Drill Isn't Working

1. 81

   kerrygposted 13 years ago

   Contrary to what has been suggested in several posts here over the last few weeks, Obama's supposed imposition of "regulation after regulation, roadblock after roadblock" is not what's holding up domestic oil drilling, it's the oil companies themselves holding out for higher profits.
   
   This is what has happened to domestic oil production since Obama took office:
   
   
   
   Meanwhile:
   
   * The oil and gas industry has failed to use more than two-thirds of the offshore leases they hold in the Gulf of Mexico and more than half of those they hold onshore.
   
   * The industry has almost 7,200 drilling permits on federal lands that it hasn’t used yet.
   
   * In Wyoming alone, the oil and gas industry has idled nearly 12,000 productive natural gas wells. The cause? A "downturn in pricing"
   
   * The United States has 1,738 drill rigs actively exploring for or producing oil and gas right now, a 20 percent increase over a year ago. That’s more than the rest of the world has combined, not including Russia and China where reliable information is not available.
   
   * Opening up more federal lands to oil drilling will have at best a marginal impact on gas prices and even if there is a reduction it could be erased by OPEC cutting production.
   
   The truth is that drilling and production are largely dictated by world energy markets and the industry drills and produces when it thinks it can make the most profits.
   
   When prices are down, the industry counts on pro-oil politicians allowing them to stockpile leases and drilling permits until prices rise. Americans will only stop being harmed by spiking gas prices when they are no longer hostage to the oil industry.
   
   Source

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2. 61

   lady_love158posted 13 years ago

   Same lies I have debunked before. Oil production has risen under Obama ad a result of Bush policies. Obama has since shut down wells but we have yet to feel the effects of his policies but we are experiencing the effects in the price we're paying for gasoline.
   
   http://www.nationalreview.com/articles/ … cey?page=1

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      kerrygposted 13 years agoin reply to this

      Did you read anything past the chart?

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         lady_love158posted 13 years agoin reply to this

         I suggest you read this for an explanation of the president's lies and misleading statements. Some leased land contains no oil so of course companies wont drill there. Those leases were included in Obama's remarks. Obama wants to tax companies for not drilling in thosed leased lands which of course will be passed onto you in the form of higher prices. Obama WANTS energy prices to " necessarily skyrocket" (his own words) and is doing what he can to make that happen.
         
         http://yidwithlid.blogspot.com/2011/03/ … eases.html

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            kerrygposted 13 years agoin reply to this

            That was in reference to cap and trade, not drilling. I strongly oppose cap and trade, which I've made clear many times in forums and hubs.

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               lady_love158posted 13 years agoin reply to this

               I guess you didn't read the link. Oh well. Yes when Obama said that he was.talking about addressing global warming. Whatever your feelings on cap and trade Obama is committed to implementing a program even if he has to use the EPA to go around congress to do it. Still his agenda includes raising the cost of energy and there's no reason to think that his policies are designed to do the opposite of what he's stated as his goals.

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               1. 81

                  kerrygposted 13 years agoin reply to this

                  Sorry, my husband needed the computer for awhile, so I couldn't respond in full.
                  
                  As Jim and I established elsewhere in this post, oil and gas companies feel that the current prices are too low to provide appropriate return on investment from the domestic leases they possess. Therefore, they are not likely to increase domestic production regardless of what Obama does, until oil and gas prices increase enough to make it worthwhile for them.
                  
                  Taxing them on unused leases would actually encourage them to increase domestic production sooner because it would make it less profitable to just sit on leases until the prices go high enough to justify drilling.

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                  1. 61

                     lady_love158posted 13 years agoin reply to this

                     Again you still didn't read my link. Leases are issued for drilling and exploring. No one is going to drill on a lease that doesn't contain oil no matter how much you tax them.

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                        John Holdenposted 13 years agoin reply to this

                        1. Why take out a lease on a none oil bearing concession
                        
                        or
                        
                        2. How do they know that it's none oil bearing without drilling.

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                           lady_love158posted 13 years agoin reply to this

                           I urge you to read the link. The leases are for drilling and exploring and not a guarantee that oil will be found.

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                              John Holdenposted 13 years agoin reply to this

                              Well, I've read the link a second time and the second didn't answer my question either.
                              Of course there is no guarantee that oil will be found when they drill. Of coarse it is guaranteed that without drilling they will find no oil!

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                              1. 61

                                 lady_love158posted 13 years agoin reply to this

                                 
                                 
                                 Once you find one that produces there is an abundance of paperwork to be filed before you can tap the well. That paper work has been expanded under the Obama administration note that this administration dragged their feet on issuing a drilling permit for one rig even after the owner won a court order to be issued a license. It just is not reality to claim that Obama is doing all that can be done to tap the resources of this country.

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                     2. 81

                        kerrygposted 13 years agoin reply to this

                        Then it is what is known as a bad investment. Normal companies have to eat their losses when they make a bad investment. Why shouldn't oil companies?

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                           lady_love158posted 13 years agoin reply to this

                           Okay but no one is suggesting they shouldn't nor is that anyway related to your OP.
                           Your claim, and that of Obama that the oil companies aren't drilling in their current leases is simply false. This administration is doing all that it can to prevent drilling because that is the Obama policy his agenda.

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   2. 61

      John Holdenposted 13 years agoin reply to this

      Funny that! Oil production rises as a result of Bush policies, but nothing negative has happened as a result of Bush policies!

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   3. 85

      I am DB Cooperposted 13 years agoin reply to this

      I'm not seeing how this article debunks anything. The argument being made by the OP is that oil production is stagnant or declining because of capitalistic forces (it's not profitable to drill for more oil because the market price isn't high enough). Jim Lacey says we need to decrease our reliance on foreign oil by exploiting the sources we have. As already stated, this is something oil companies are reluctant to do without a strong profit motive (understandably so).
      
      Lacey seems to imply that oil prices triggered the recent economic downturn. I would call that assertion dishonest at best. Oil prices didn't help anything, but it was not the major factor he makes it out to be.
      
      When he starts talking about the Green River Basin, he's talking about land that has been regulated by the federal government for 70 years and contains many important resources. There already is some mining there, and to introduce large-scale oil drilling to the region could threaten a massive aquifer along with many other vital industries in the region. That's not worth it just so we can save $.20/gallon at the pumps. That oil isn't going anywhere, so why not wait until it's really needed? If the world oil resources really were running out, wouldn't we want to be the last ones holding a reserve?

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3. 59

   Jim Hunterposted 13 years ago

   Some wells are shut down because it cost too much to get the oil out of the ground.
   
   Return on investment is always a consideration for capitalists.
   
   Weird huh?

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      kerrygposted 13 years agoin reply to this

      "Return on investment is always a consideration for capitalists."
      
      Indeed. So perhaps you can explain why Obama is getting blamed because the companies are holding out for better return on investment?

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         Jim Hunterposted 13 years agoin reply to this

         Lets try this again.
         
         Not every well that has been drilled will produce enough oil to make it profitable.
         
         Not every well that has been drilled will produce any oil at all.
         
         So they sit.

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            kerrygposted 13 years agoin reply to this

            Note that the article specifically says that the wells that were shut down were productive. So perhaps you can explain why Obama is getting blamed because the companies are holding out for better return on investment?

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               Jim Hunterposted 13 years agoin reply to this

               Obama is being blamed because of his resistance to allow domestic drilling.
               
               Just like anything else a lack of a product will increase the price of buying the product.
               
               The question is why would Obama or any politician want to see the people they represent suffer because of high prices.
               
               By the way, The Center for American progress is headed by John Podesta (your source) therefore it should be dismissed out of hand.

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                  kerrygposted 13 years agoin reply to this

                  "Obama is being blamed because of his resistance to allow domestic drilling."
                  
                  But we've just established that if prices go down, companies won't drill domestically because they won't get adequate return on investment, so again, I really don't see why Obama is being blamed.
                  
                  "By the way, The Center for American progress is headed by John Podesta (your source) therefore it should be dismissed out of hand."
                  
                  I cut out about half the editorializing from the original article. The sources for the facts they quote are reliable.

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                     Jim Hunterposted 13 years agoin reply to this

                     "But we've just established that if prices go down, companies won't drill domestically because they won't get adequate return on investment, so again, I really don't see why Obama is being blamed."
                     
                     I told you why Obama is being blamed, if you don't understand then blame the public education system.
                     
                     "I cut out about half the editorializing from the original article. The sources for the facts they quote are reliable."
                     
                     Nothing that John Podesta is in control of would be reliable or worth reading.
                     
                     Unless you like to be lied to.

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                        kerrygposted 13 years agoin reply to this

                        "I told you why Obama is being blamed, if you don't understand then blame the public education system."
                        
                        Ooh, a personal attack, thanks for conceding defeat!
                        
                        I was homeschooled, by the way.
                        
                        "Nothing that John Podesta is in control of would be reliable or worth reading."
                        
                        John Podesta controls the Energy Information Administration, the Department of the Interior, the Bureau of Land Management, the Wyoming Oil and Gas Conservation Commission, and Baker Hughes Incorporated? How interesting.

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   logic,commonsenseposted 13 years ago

   The first deepwater permit since the BP incident has been awarded.  The company that received it said they had to jump through unprecedented bureaucratic hoops.
   
   Even the oil companies admit that there is plenty of oil and gas available, that it is the speculators in commodities that are driving up prices.  Same way with livestock and grains.
   Speculators, speculators, speculators!  Buy a clue people!  Contact your legislator.  Commodities are mostly run up and down by people who neither produce not process the commodity they are speculating in.  The trades are poorly regulated.  Many on the inside admit to this yet nothing is done.  Guess why.  Donations to political campaigns.  Both parties. Until a crack down on the wild speculation is made, we will continue to pay and pay for the gambling on the commodity markets.
   The price of gas is not based on the cost, rather it is based on futures prices.  Traders run this up and down so they can make money both ways and the consumer is stuck in the middle.  Time to rein the speculators in. Can't do it until we bitch long and loud to legislators.  Then vote them out if they ignore us.

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      kerrygposted 13 years agoin reply to this

      "The company that received it said they had to jump through unprecedented bureaucratic hoops."
      
      And this is unreasonable why? Even if you don't give a crap about the environment, the nearly $30 billion in estimated damage to the Gulf tourism and fishing industries alone should give anyone pause.
      
      Furthermore, "unprecedented bureaucratic hoops" doesn't say much when BP's disaster response plan for the Deepwater Horizon platform talked about minimizing the effect of a spill on local walrus populations.
      
      The rest of your post I agree with.

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         I am DB Cooperposted 13 years agoin reply to this

         Oh, so now we're going to ask oil companies to have a reasonable response plan in case of a disaster that could cause billions of dollars to other industries? Darn these bureaucrats for not catering to big oil. One bad apple had to spoil things for all the other bad apples.
         
         It's funny that logic,commonsense seems to be against government regulation of oil companies that have shown blatant disregard for the environment and other industries that their mishaps destroy, yet he wants everyone to call up their representatives and get the government to intervene in the oil markets to stop speculators, who exist in most markets and cause price crashes along with price surges. Anytime we have an oversupply and prices crash, chances are speculators were involved in it, so consumers will both win and lose as a result of speculation. We seem to only complain about it when we're losing.

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            Jim Hunterposted 13 years agoin reply to this

            "We seem to only complain about it when we're losing."
            
            Really put some thought into that.

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            logic,commonsenseposted 13 years agoin reply to this

            You'd be wrong.  I am for sensible, logical, commmonsense regulation of oil production based on science, not emotion.  We have the technology to prevent major oil spills.  We also have the regulation for safe oil production.  It seems though we have been lacking in enforcing those regulations already in place.  The agencies in charge of monitoring drilling have not done their jobs.
            I am for sensible, logical regulation of the commodity markets as well.  It is up to the legislators to regulate the commodity markets as it is their reponsibilty to regulate the equity markets.
            I have no problem with the market moving up or down due to real supply and demand.  I do have a problem with manipulation.
            Do not presume to know what I am for or against.  You'd be wrong.

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