OPEC member suggesting that oil might be a bit too high

[Deacon]

They would be drilling for oil off-shore (sort of difficult) and since 100% accident prevention is impossible (not to mention your still intruding on the environment) there is always risk.

I think I'd trust American companies to do a better job than the Chinese or Nigerians.

[Hirschof]

They would be drilling for oil off-shore (sort of difficult) and since 100% accident prevention is impossible (not to mention your still intruding on the environment) there is always risk.

I think I'd trust American companies to do a better job than the Chinese or Nigerians.

True. I trust them to do their job well but the risks are still there and that is what bothers me.

[collegestudent22]

Why wouldn't work infrastructure be able to handle that oil production?

Pipelines can only move oil so fast. The capacity of the Trans-Alaskan pipeline is 2 million barrels/day.

The Coastal Plain probably contains much more oil, but it can be produced at a maximum rate of 2 million barrels per day (capacity of the trans-Alaska oil pipeline).

And since the Prudhoe Bay (about 100 miles west of ANWR) oil field began production, the environment has had no drawbacks. In fact, the local caribou population grew from 3,000 to 32,000.

ANWR is 19.6 million acres. The drilling area proposed is only 2,000 of those. The original Prudhoe Bay estimate was 8 billion barrels. It has produced 14 billion barrels to date. If the same occurs with the oil reserves in ANWR, we could be looking at 20 billion barrels or so (the current estimate is 16 billion). 75% of the local population (including the Inuit tribe living in ANWR) support responsible energy exploration in ANWR.... and they are the ones affected by and enjoying the environment up there. Source for all of this is anwr.org.

Why let concern for the environment of caribou (who increased even though drilling was done in their environment) and the Inuit (that want the drilling done) to blind your judgement? Drilling is much safer for the environment now than it was in the past. A slight risk is necessary at times. Or do you just stay indoors and don't move in order to eliminate the risk of damaging yourself, the environment, and other people??? No, you contine your business while using ORM to minimize that risk while still getting the job done. And that is what is necessary here.

[Hirschof]

The original Prudhoe Bay estimate was 8 billion barrels. It has produced 14 billion barrels to date.

and spilled 134,000 and 268,000 gallons of oil across two acres.

the Inuit (that want the drilling done)

http://www.gwichinsteeringcommittee.org ... tsyaa.html

The Alaska Inter-Tribal Council, which represents 229 Native Alaskan tribes, officially opposes any development in ANWR.

[collegestudent22]

The original Prudhoe Bay estimate was 8 billion barrels. It has produced 14 billion barrels to date.

and spilled 134,000 and 268,000 gallons of oil across two acres.

Which was cleaned up without severly damaging the environment. The environment still exists and is flourishing as evidenced by the increase in the caribou population as well as other indicators. Personally, I think that it is very arrogant of you to think that any mistake that is made automatically results in the destruction of the environment. Oil spills can be cleaned up. And as long as they are done so quickly and safely, the environment suffers no lasting damage... Granted, it is easier to prevent them, but again, ORM is necessary here. Do everything you can to minimize the risk, without giving up the job.

the Inuit (that want the drilling done)

http://www.gwichinsteeringcommittee.org ... tsyaa.html

The Alaska Inter-Tribal Council, which represents 229 Native Alaskan tribes, officially opposes any development in ANWR.[/quote]

Are those all the Alaskan tribes? No. The Inuit I was referring to are those that LIVE ON THE REFUGE. I was referring to the same tribe that I mentioned earlier....

[Hirschof]

Which was cleaned up without severly damaging the environment.

Well, that makes it all ok then. That is like an abusive husband saying, "It's alright I slapped her because I didn't leave a bruise."

Arrogance on my part? How? "Hey, we want to go into an undisturbed environment to help save our asses from something we should have prevented two decades ago but didn't. Don't worry, we won't fuck things up this time around. Scout's honor."

Yes, they can be cleaned up quickly and safely if they are small/slow spills. So, lets just go ahead and assume that 100% of them will be that way, huh?

Are those all the Alaskan tribes? No. The Inuit I was referring to are those that LIVE ON THE REFUGE. I was referring to the same tribe that I mentioned earlier....

Sigh... Once again you fail at reading. "The Arctic National Wildlife Refuge has been the homeland to the Gwich’in Athabascan people of interior Alaska and the Inupiat people of the north coast."

http://www.gwichinsteeringcommittee.org/history.html

Why don't you browse through that page and see how the locals feel.

[Deacon]

That is like an abusive husband saying, "It's alright I slapped her because I didn't leave a bruise."

I hardly think so. That's more like a eye surgeon performing thousands of surgeries, and out of those times there was once or twice when he nicked the wrong part of the eye but was able to prevent any significant injury or lasting issues.

"Hey, we want to go into an undisturbed environment to help save our asses from something we should have prevented two decades ago but didn't. Don't worry, we won't fuck things up this time around. Scout's honor."

Out of curiosity, what specifically are you referring to with that?

[Hirschof]

Oil crisis in the 70's/80's and the numerous warnings of the oil market (OPEC and theory of dwindling supply).

But re-reading what I wrote, could have done a better job there (all over the board). bleh...

[Deacon]

OK... So what does that mean? That you believe we ran out of oil in the late 70's and...so what, now?

[Hirschof]

No, I (poorly) meant to say that we shouldn't have allowed ourselves to get in this spot.

We've been through this mess with OPEC and the price of oil for a long time. We've been fighting over the supply of oil for a long time.

I just feel that if this country's efforts was placed on getting away from OPEC and oil dependency 20-30 years ago that we most likely wouldn't have to deal with ANWR. I also don't care much for the risk the extraction and production of oil creates for the environment. I understand the industry tries to make as small of an impact as possible but the damage that has been done in other regions and the possibility of ruining a place like ANWR... just doesn't sit well with me.

Like I said, it was a mess of a thought. I got so frustrated at CS22's nonsense I made some of my own.

[collegestudent22]

Like I said, it was a mess of a thought. I got so frustrated at CS22's nonsense I made some of my own.

And your nonsense was that we could have fixed the problem by drilling in the 70s and 80s in ANWR/offshore, etc.

the possibility of ruining a place like ANWR

The amount of ANWR with oil on it is only 2000 acres. As opposed to the 19.6 million acres that the refuge consists of. Even taking into account room for pipelines to transport the oil, less than 10% of the area is at risk. And since an oil spill (even if it does occur) causes no lasting damage, the risk of harming the environment is pretty damn manageable. Just look at the Prudhoe Bay events. The environment there continues to flourish despite the drilling and oil spills.

Everything that is done has a possiblity of damaging the environment. It is a risk that must be managed. It should not, however, stop civilization in its tracks.

[Deacon]

Out of curiosity, is anyone here under the impression that we haven't been researching alternative energy options for decades now?

[Hirschof]

And your nonsense was that we could have fixed the problem by drilling in the 70s and 80s in ANWR/offshore, etc.

Uh... no. Never said that.

And since an oil spill (even if it does occur) causes no lasting damage, the risk of harming the environment is pretty damn manageable.

Why don't you post a source/reference for once?

Oil spills kill wildlife plus ruin the local economy if it is near a human population. Eventually down the road it will be cleaned up but it isn't the same. You can't tell me something that can kill thousands of animals doesn't have a lasting impact on the environment.

anyone here under the impression that we haven't been researching alternative energy options for decades now?

Not very well in my opinion. It was more of our oil gluttony that got us here. Heading home for the day. Talk to everyone tomorrow.

[Smilie Myth]

Hirschof - since these alternative energy options are mostly done by independent businesses (Which the government can/should/does sometimes sponsor, there just needs to be interest and demand... right?), what we're left with is pretty much our own doing. Please excuse the cliche but hindsight is 20/20. It's very obvious that yeah, we didn't explore other options very well, but this is what we have now. So we need some kind of temporary solution until other reliable energy sources are perfected. Would drilling for just a few years in small area's really do a huge amount of damage? Yeah if there is a spill animals might die, which is unfortunate but if damage can be kept to a minimum it's a win-win.

[adciv]

First, remember this, I'm reviewing some stuff still. I'm posting this to get some of it out of the way.

My point about the sales tax was to reference your earlier point that sales tax is higher on petroleum products already. No tax is well below the average sales tax.

The link you gave that vaguely specified subsidies said that the tax on gasoline was below the national average for a sales tax. That was why I was showing it was BS. That is presuming that we even believe that not taxing gasoline is a subsidy as that link you gave was claiming, or that the highway system was a subsidy (the website claimed that, not you). This is why I was skeptical of them and of any claims of subsidies without details on what goes into the subsidies, what defines a subsidy can change from person to person. That is why I asked you for your definition of it. It allows us to eliminate some of the claims of one of the websites quickly, such as disproving that the highway system is a subsidy. Further, with regards to jet fuel, only CA taxes were exempt. There was no mention of federal taxes. Finally, products about to be taken out of country are routinely tax exempt, provided it is known they are going to be removed from the country and this routinely happens. Duty Free shops are an example. Also, if I go to Europe, I can get the VAT payed on items back as well. This is not something that is done specifically for fuel.

Now, using your definition of what constitutes a subsidy

A government subsidy is any amount of money that a company/person receives in relief of their financial obligation to the government.

The following should then be immediately eliminated from the website you gave

• Relaxing the amount of royalties to be paid (more below)
  If one decides to sign a contract, one should not be allowed to change the conditions of the contract (unless it is allowed for in the contract). It is entirely possible this was set out when oil was much lower ($20/barrel). There should have been something in the contract to up it when prices changed. Either way, the gov is still getting the amount they agreed to.
• Sales tax breaks - taxes on petroleum products are lower than average sales tax rates for other goods
  You have already said we pay the taxes this refers to, not the oil companies
• Giving money to international financial institutions (the U.S. has given tens of billions of dollars to the World Bank and U.S. Export-Import Bank to encourage oil production internationally, according to Friends of the Earth)
  No money or relief of ammount owed to the gov.
• Research-and-development programs at low or no cost
  R&D is considered tax deductible, no matter who does it. As such, if it is a subsidy, it is not a special one only for the oil industry, but one that all companies receive. If this is something else, I'm going to need more info.
• Assuming the legal risks of exploration and development in a company's stead
  If I agree to it in the contract, so be it.
• Income tax breaks, especially featuring obscure provisions in tax laws designed to receive little congressional oversight when they expire
  This one, we have been over before. As they are paying a comparable rate to other large corporations, this really is BS. Side: Why would oversight when they expire matter at all?
  No money going towards them or relief of taxes they pay. Only relief of taxes we pay.
• The U.S. Strategic Petroleum Reserve
  They are being paid for a product at the market rate, no relief from the taxes
• Construction and protection of the nation's highway system
  No money going towards them or relief of taxes
• Allowing the industry to pollute - what would oil cost if the industry had to pay to protect its shipments, and clean up its spills? If the environmental impact of burning petroleum were considered a cost? Or if it were held responsible for the particulate matter in people's lungs, in liability similar to that being asserted in the tobacco industry?
  Again, no money going towards them and no relief in taxes, and protection of shipments is protections of all shipments, not just oil, as required under international law and treaties against piracy that we have signed.
• Below-cost loans with lenient repayment conditions
  This one is probably your best bet for what they have listed. Although, it is close. I'm looking more into this.
• Construction bonds at low interest rates or tax-free
  As they are still paying back more money than they received. Additionally, the loan rates may have been locked in when interest rates were lower. This one is somewhat debatable on the tax-free portion. Tax free would probably mean who ever buys the bonds does not have to pay taxes on the interest they receive. This means that they would be willing to accept a lower interest rate. However, it does not relieve they oil industry of taxes, only whoever buys the bonds.

Further, both of you guys (adciv and collegestudent) don't trust the sources to which I have pointed to show that their are untapped resources in the leased yet unused off shore AND on shore (meaning that there are onshore sites that are not being used as well, which should answer your point concerning them), yet do you have sources showing that there are no resources or not enough resources to justify exploration/drilling?

To show low cost loans, I would have to tap into a gov't database showing loans that they give out. If you choose not to accept my source, show me your source which refutes it.

How can I refute a source that does not give any specifics on the loans? It would be akin to me saying you are a criminal without giving a crime, time, place or anything else and then expecting you to refute it. That is why I do not like just calling something a 'subsidy'. Further, as I have listed above, many of the things called a subsidy are not under the definition you have given.

It's not that I don't trust your sources, it's that so far they have been intentionally vague. They claim the subsidies, as you say, but they do not say what those subsidies are. I am not willing to blindly follow a claim without any actual details on what they are saying is a subsidy. The yahoo link you gave gives some more details that were severly laking in the original and I am reviewing it now.


Now, on drilling equipment being in short supply,
http://royaldutchshellplc.com/2006/12/2 ... co-fields/
http://www.energyinvestmentstrategies.c ... shortages/

http://money.cnn.com/2008/06/23/news/ec ... tm?cnn=yes
One of the reasons for not developing the land? Might be too expensive. Awww, poor oil companies, would that eat into your 40 billion dollars of profit. I'm so sorry for you.

Can you give a valid reason why a company should do something that would lose them money (aside from things that they are required to do to comply with the law)? All you are doing is coming across like an ass with this and it does nothing to help your arguments. Seriously, we've also been over the $40B not being all that much when compared to how much they spend to make that.

I think the biggest reactors come in at about 1.5GW right now.

Ok, that makes a tad more sense with everything. So we would still be talking several hundred plants, no matter what kind, to replace gas with hydrogen. Not going to happen in 5 years.

I came across this on leasing and not drilling as well.
Hirschof, can you coroborate at least some of what this guy said?

I live right in the middle of one of the past's biggest oil fields.

West Texas

For years, we produced billions of barrels of oil, then the wells "petered out".

By "petered out" they stopped giving out all this oil using teck that was available at that time, and considering how much it took to pump it and the price at which it sold...those wells were capped. Some were even cemented in, which makes it really hard to ever open them back up.

Exploration stopped because the cost exceeded the profit on new exploration and test wells.

This shit is expensive. Even back then, running out a new field which only some dickheadd from A&M said there MIGHT be oil or gas, was millions of dollars from the time you drove up until the time you either drove off or put in a rig to bring the oil up. Even then the cost had just started, After the well was ready for a pumpjack, you had to lay plumbing for tanks or a pipeline to a pumping station. You had to improve the roads, pay the fines, taxes and a hundred other expenses, all over and above the lease payments, the payments to the hundreds of guys that drilled, set up and broke their backs on that ONE well.

Now, to get to one person's question here. Why do we have all of these unused leases?

Well, they are unused because drilling on them would not make a profit. You know...profit, the thing that makes business stay in business and not go broke.

The oil companys have to buy leases for at least two years, sometimes more. Sometimes the margin for profit is close enough that they re-lease the property, in the hope that if prices go up enough, they will be able to make money on that lease.

That has happened for the last three years out here where I live in West Texas. Thousands of wells have been opened up, and are pumping oil. Not enough to shout about, but enough to make a small profit.

The real benifit here has been the employment. Men are coming from all over to work here. There is no place for them to live. Motels are full, trailer parks are full, homes...? all taken. Hell there are men living five to a room at motels. Which is ok, since most are not there most of the time anyway and when they are there they are so dead tired, they could sleep in the bathtub or on the kitchen floor.

Roughnecking is hard dangerous work, but the pay is really good.

Lucky for me I always worked inside in air conditioned spaces, had customers who brought me coffee, bought my lunch, invited me to their parties and lots of other perks. Working for Big Blue was a hard and mostly thankless job, but at least I didn't have to break my back or risk my life every day.

Now, going to Alaska or off the coast and working up there on new oil fields. Man if I was young, I would go, not only for the adventure but for the money.

The amount of ANWR with oil on it is only 2000 acres. As opposed to the 19.6 million acres that the refuge consists of. Even taking into account room for pipelines to transport the oil, less than 10% of the area is at risk.

CS22, CHECK YOUR FRIGGING DECIMAL PLACES! You keep goofing up on your orders of magnitude. 2000 out of 19.6 is slightly more than 0.01% It is no where near 10%.

On the Bay Spill from last year. That spill does not have anything to do with off shore drilling. A container ship hit the bridge. That is an independent event from anything that would happen from off-shore drilling platforms.

Proof of oil spills linked to offshore drilling http://www.usnews.com/articles/news/nat ... lling.html

Next time, please just link to the 1969 oil spill. The article itself does not actually mention a platform causing a spill. I am still looking this over, but that comment is for future reference for when posting supporting links. I could have just as easily said that it doesn't say anything about platforms, just some oil spill from 40 years ago, but doesn't say why it is relevant.

Stuff I'm still reviewing:

http://www.usnews.com/articles/news/nat ... lling.html
http://in.biz.yahoo.com/080501/129/6tayb.html
http://money.cnn.com/2008/06/23/news/ec ... tm?cnn=yes
http://tampabay.com/news/environment/wa ... 634009.ece
Loans and Bonds mentioned above

*edit* It is entirely possible that some thing mentioned in one of these links will change what I have posted above. If this is true, please wait until I correct what I have said above/post again on the links I am reviewing.

Also, a question for Hirschof. Do you know how much oil is, on average, extracted from a single well over it's lifetime? Also, do you know what the lifetime is? If there is any related information you believe would be useful, please share it.