why dems don't want drilling.

#27
#27
volinbham said:
They may want to lock up land to keep it from other drillers. There may be reserves but they are not profitable to extract - but, they want to keep it out of the hands of their competitors.
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So, what does that do to solve our problems? This just all seems weird to me. My guess is that this oil is expensive to extract, and is only becoming profitable with the price increases of crude. Aren't reserves even measured by what is capable of being extracted profitably, versus resources - which are what is actually in the ground?
 
#28
#28
volinbham said:
They may want to lock up land to keep it from other drillers. There may be reserves but they are not profitable to extract - but, they want to keep it out of the hands of their competitors.
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That was mentioned on the interview I heard where I referenced my other points from.
 
#29
#29
TennTradition said:
So, what does that do to solve our problems? This just all seems weird to me. My guess is that this oil is expensive to extract, and is only becoming profitable with the price increases of crude. Aren't reserves even measured by what is capable of being extracted profitably, versus resources - which are what is actually in the ground?
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Not sure how it's measured.

As for helping us? It doesn't as far as I can see. It's a consequence of the market approach.

I would imagine their are land grabs when lands become available and even if that land is not producing, there is some reluctance to free it up for someone else to come take a crack at it.

There's probably a range of land from completely worthless (which they let go) to highly valuable. In between there may be marginally or potentially productive spots that it's cheaper to keep unexplored.

It's the Bear Bryant approach, horde players to keep them out of your competitors hands even if you don't want them.

There was an interesting story about a deep well in the Gulf that Exxon gave up on and another company has taken over. It's over 32,500 feet deep and the new company expects to spend at least $25 million to take it to their goal depth - Exxon already spent over $300 million on it. Apparently, it's the deepest hole out there.
 
#30
#30
volinbham said:
Yep. And if we restrict who can buy ours, the people we depend on might do the same with theirs.
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Sorry, but even if they did we have the world's best road infrastructure and they would starve themselves since not everyone in the Middle East or other places has a car let alone a road to drive it on. Oil is their means of sustaining and I don't think that Saudi Arabia or Venezuela buys a lot of oil from us.
 
#31
#31
OK, I'm sure this has been covered but I can't remember the solution. If we need an immediate curb to oil prices why not just release some of our huge oil reserves for some short-term help?

I think it's safe to say drilling is not the short-termanswer. At best it's a 1+ years down the road to build, drill, extract, and refine.
 
#32
#32
VolByBirth said:
OK, I'm sure this has been covered but I can't remember the solution. If we need an immediate curb to oil prices why not just release some of our huge oil reserves for some short-term help?

I think it's safe to say drilling is not the short-termanswer. At best it's a 1+ years down the road to build, drill, extract, and refine.
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That does not make any sense. 1+ years is not short term?
 
#33
#33
I don't think that our reserves are large enough to lower prices over a term that would be necessary to solve the current problem. Our reserves are intended to prevent price spikes due to hiccups in supply...which isn't the case here.
 
#34
#34
VolByBirth said:
OK, I'm sure this has been covered but I can't remember the solution. If we need an immediate curb to oil prices why not just release some of our huge oil reserves for some short-term help?

I think it's safe to say drilling is not the short-termanswer. At best it's a 1+ years down the road to build, drill, extract, and refine.
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I would agree but I would bet the reason we have not yet is just in case Iran gets crazy and we end up involved in conflict. It would disrupt oil and make our reserves a must have for the duration.
 
#35
#35
g8terh8ter_eric said:
Sorry, but even if they did we have the world's best road infrastructure and they would starve themselves since not everyone in the Middle East or other places has a car let alone a road to drive it on. Oil is their means of sustaining and I don't think that Saudi Arabia or Venezuela buys a lot of oil from us.
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They can sell it to everyone but us if they like...
 
#38
#38
volinbham said:
They can sell it to everyone but us if they like...
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You honestly think that would happen?? The fall of oil in the US will be one of the downfalls of the Middle East. No one except maybe China and India could keep their pockets lined like we can and we offer their oil fields protection and I think that Shell and other companies have a vested interest over there anyway. You lower the demand on them and prices will go down worldwide. Honestly, I think we have unregulated speculation on futures and China and India to blame on rising oil prices. Funny thing is we had the same refining abilities we have had for years and it's just recently the price went up like it has. It's a world problem not just a US problem. Too many simpletons don't understand that though and want to blame everything on Bush. I think since Bush removed the moratorium on offshore drilling (or whatever it was) the price of oil has went down $10 a barrel. Wasn't that like last week??
 
#39
#39
g8terh8ter_eric said:
You honestly think that would happen?? The fall of oil in the US will be one of the downfalls of the Middle East. No one except maybe China and India could keep their pockets lined like we can and we offer their oil fields protection and I think that Shell and other companies have a vested interest over there anyway. You lower the demand on them and prices will go down worldwide. Honestly, I think we have unregulated speculation on futures and China and India to blame on rising oil prices. Funny thing is we had the same refining abilities we have had for years and it's just recently the price went up like it has. It's a world problem not just a US problem. Too many simpletons don't understand that though and want to blame everything on Bush. I think since Bush removed the moratorium on offshore drilling (or whatever it was) the price of oil has went down $10 a barrel. Wasn't that like last week??
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I don't see holding back all US production for US consumption as being feasible in any way. It would take nationalizing the production. Much of the production is handled by foreign companies (Shell, BP) in addition to US companies (Chevron, Exxon-Mobile). Refiners would still have to source from foreign sources. You'd need rationing and allocation to ensure fair access to the US oil. Transaction costs would jump.


You'd have to find an entirely new pricing mechanism and US produced oil prices would be at different prices than foreign produced (if not, what's the point).

Taking the US supply out of the market would just as likely raise the volatility of the price of other sources and jack the price. Since we still depend on 70% or so, we'd have price problems.

Great in theory, terrible in practice.
 
#40
#40
volinbham said:
I don't see holding back all US production for US consumption as being feasible in any way. It would take nationalizing the production. Much of the production is handled by foreign companies (Shell, BP) in addition to US companies (Chevron, Exxon-Mobile). Refiners would still have to source from foreign sources. You'd need rationing and allocation to ensure fair access to the US oil. Transaction costs would jump.


You'd have to find an entirely new pricing mechanism and US produced oil prices would be at different prices than foreign produced (if not, what's the point).

Taking the US supply out of the market would just as likely raise the volatility of the price of other sources and jack the price. Since we still depend on 70% or so, we'd have price problems.

Great in theory, terrible in practice.
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If we only kept 50% of our own oil it would be effective. I'm not saying take it out, just don't put so much in.
 
#41
#41
g8terh8ter_eric said:
If we only kept 50% of our own oil it would be effective. I'm not saying take it out, just don't put so much in.
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How do you hold it out? How does the price get set for it? Who gets it? Which refineries would it go to?

I just don't see a clean way to do it that doesn't cause more problems than it's worth.
 
#42
#42
volinbham said:
How do you hold it out? How does the price get set for it? Who gets it? Which refineries would it go to?

I just don't see a clean way to do it that doesn't cause more problems than it's worth.
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So, what the hell do we do?? Just keep buying oil overseas and selling most of our oil to other countries?? That makes no sense at all.
 
#43
#43
KB5252 said:
I would agree but I would bet the reason we have not yet is just in case Iran gets crazy and we end up involved in conflict. It would disrupt oil and make our reserves a must have for the duration.
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it would be the same with iraq. any type of take over or large scale violence would send oil prices shooting up more. look at venuzuela, that whacko is just chomping at the bits to see us go down. what would it do to prices if he decided to cut production. i doubt he would do it, but you never know.
 
#44
#44
joevol320 said:
it would be the same with iraq. any type of take over or large scale violence would send oil prices shooting up more. look at venuzuela, that whacko is just chomping at the bits to see us go down. what would it do to prices if he decided to cut production. i doubt he would do it, but you never know.
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It would make him poor.
 
#46
#46
Easy...... the controlling powers that be of the democratic party have to answer to their fringe groups that give them their money.
 
#47
#47
g8terh8ter_eric said:
So, what the hell do we do?? Just keep buying oil overseas and selling most of our oil to other countries?? That makes no sense at all.
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It basically all goes into one big pot they way I understand it. So we aren't necessarily selling most of it to other countries - most may stay right here for transportation cost reasons. However, the global supply sets the global price. If we could somehow take some out of the global market - it would likely raise the global price and we have to buy it then anyway - also, setting the domestic price would be problematic - the market couldn't do it since there would be a severe supply/demand imbalance.

Ownership is also a tricky thing. As I understand it, most of the oil rights are granted to producers and the "owner" (private/state/federal) receives royalties. So it may be produced in the US but it's not necessarily owned by the US in the traditional view of ownership. To take that form of ownership would require some type of nationalization as I see it.

If we produced more it would ease the supply/demand issue some and provide a more stable source of supply on the world market which could reduce both the price and volatility of price.

Bottomline, more domestic production could help stabilize supply and lower prices but we will still be a net importer until we move off of petroleum or find another way to produce it to drastically change the supply situation.
 
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