Gas Prices Pump Up Support for Drilling; Big Oil winning?

All of this discussion really highlights the failure of education in this country. Ignorance abounds.

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okie wrote:

All of this discussion really highlights the failure of education in this country. Ignorance abounds.

Yep, we would be a better, more intelligent country if the government school teachers unions were busted.

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Amen.

Instead of a field trip to the local Sierra Club ecological park, take the kiddies to see an actual drilling rig drilling for oil, and actually see somebody working and doing something beneficial to society.

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okie wrote:

All of this discussion really highlights the failure of education in this country. Ignorance abounds.

Well, put your money where your mouth is big boy, educate us. What are we (assuming my post is included) missing and why.

Fact 1 oil companies are making record profits.

Fact 2 americans are paying record prices at the pumps.

Fact 3 oil companies are not using up the drilling places they have available now.

Fact 4 oil supply is not infinite.

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revel wrote:

Fact 1 oil companies are making record profits.

Do you know the difference between profit and profit margin?

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revel wrote:

okie wrote:
All of this discussion really highlights the failure of education in this country. Ignorance abounds.

Well, put your money where your mouth is big boy, educate us. What are we (assuming my post is included) missing and why.

Fact 1 oil companies are making record profits.

In dollars maybe, but not percentage. Many other businesses make higher margins of profit. The oil business is a huge job, therefore huge companies are required to do the job. Dollars profit for a large company is not the same as the same dollars profit for a small company.

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Fact 2 americans are paying record prices at the pumps.

Its called supply and demand. Supply is becoming more costly to procure, which is a two edged sword, one being negative and one being positive. Higher prices are necessary to help other technologies become more competitive. Also, historically, today's prices are not that out of line. Gasoline that cost $1.22 in 1980 would cost $3.44 in 2007.

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Fact 3 oil companies are not using up the drilling places they have available now.

Your statement here really illustrates the ignorance out there. This is a current Democrat talking point, that is silly on its face. Not all drilling places are created equal. Many are not very potential. Go study geology and find out why.

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Fact 4 oil supply is not infinite.

Neither are minerals in the ground. Does that mean we quit looking for more mineral deposits? Your statement is pointless and does not make a cogent argument for what is being discussed here.

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H2O_MAN wrote:

revel wrote:

Fact 1 oil companies are making record profits.

Do you know the difference between profit and profit margin?

Apparently not! Proving what we were saying about the education system.

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This is a topic in which prejudgement and misinformation abound. BBB is a very reliable source of both.

Petroleum companies are indeed making large profits - mostly due to rising demand, however their profit margins are relatively low, compared to both their past and to other industries. This can affect the availability of capital for new exploration.

We can count on the oil companies to seek first to explore & drill in areas where, based on their geological models they expect the greatest return, based on the cost of the drilling & exploration. Further drilling in already played out continental fields is not nearly as attractive a proposition - for them or for us - as the opportunity to tap known or expected larger finds in offshore fields or on the north slope of Alaska.

The economic drain on the U.S. due to rising imports of increasingly expensive petroleum is a serious issue that is already affecting the quality of life in the country. We need to begin now to exploit previously excluded domestic sources in order to avoid serious economic impacts in the future. The Democrat claim that drilling offshore or in Alaska "won't reduce the price of gasoline for 15 years" is specious in the extreme. Even by their models it will significantly reduce the price in the 16th year, and we know that in the real world markets quickly adjust to future expectations.

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Quote:

The Democrat claim that drilling offshore or in Alaska "won't reduce the price of gasoline for 15 years" is specious in the extreme.

True; it won't reduce the price for at least 10 years.

The 'future supply will decrease current prices' argument, when applied to ANWR, is a little ridiculous. Tell modern traders that the supply of oil will be 4% higher in a decade and the prices will drop? Not at all. Demand will rise faster then the supply will fix the problem, and they know it.

Cycloptichorn

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Quote:

net profits in 2007; the closed loopholes would be less than one percent of their 2007 profits.

links for statements embedded at the source

Also; do you have proof that the approved of sites are not productive for oil? If so produce it.

As for as oil supply not being infinite; since it is not it makes sense to invest in alternative sources for energy. Simple enough to understand.

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Just a comment, Harry Reid would rather the oil companies sink their profits into drilling dry holes on less prospective areas of current lease areas.

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Again revel, your info appears to quote dollars, not percent profit, so it is pretty meaningless. Also, if you want proof about non producing areas of current leases, go talk to the geologists. I am sure if they thought they were very hot potential, they would drill there. I am sure all businesses wish to ignore their current best customers so they are not interested in richer customers in order to expand sales? I don't think so. That is just basic business principles that you are arguing against, revel.

Exxon Mobil, the largest domestic company, is only the 14th largest oil company worldwide in terms of oil reserves, etc.

http://www.powerlineblog.com/archives2/2008/05/020589.php
http://www.powerlineblog.com/OilChart9.php

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Cycloptichorn wrote:

Quote:
The Democrat claim that drilling offshore or in Alaska "won't reduce the price of gasoline for 15 years" is specious in the extreme.

True; it won't reduce the price for at least 10 years.

This Democratic talking point always throws me for a loop. Who really cares how long it might take...the point is to get started soonest. I don't see any future technology so promising that it will relieve our dependence within the next decade, so why on earth take any option off the table?

The Democrats should advocate (as the Republicans are, I think), both positions....drill for all that we can find, and simultaneously develop alternatives...

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slkshock7 wrote:

Cycloptichorn wrote:
Quote:
The Democrat claim that drilling offshore or in Alaska "won't reduce the price of gasoline for 15 years" is specious in the extreme.

True; it won't reduce the price for at least 10 years.

This Democratic talking point always throws me for a loop. Who really cares how long it might take...the point is to get started soonest. I don't see any future technology so promising that it will relieve our dependence within the next decade, so why on earth take any option off the table?

The Democrats should advocate (as the Republicans are, I think), both positions....drill for all that we can find, and simultaneously develop alternatives...

No, we continue drilling what we have, while developing alternatives. Why sink millions or billions into new infrastructure, which will quickly be outdated as the cleaner alternatives come on line? It's wasteful and not too hot on the environment at the same time.

Cycloptichorn

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Since it is the private capital of oil companies that pays for the drilling, they get to decide whether it is in their interest to drill yet another dry hole in Texas, or to seek better opportunities elsewhere.

The "informed opinions" of those who get their conclusions prefabricated from various political sources are not generally considered to be reliable predictors by those contemplating putting their own money on the line.

Liberals often assume they can direct and control whatever resources they deem necessary through taxation or outright government seizure. However the destructive effects of such actions on economic activity are well described in the history of failure in 20th century government managed economies.

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okie wrote:

Just a comment, Harry Reid would rather the oil companies sink their profits into drilling dry holes on less prospective areas of current lease areas.

I post again just for cyclops. I know this is now an oft used talking point for those opposed to opening new areas, to drill on leases already held but not completely drilled like swiss cheese as the oil field areas are, but the talking point is totally off base. I guess Democrats assume oil exists everywhere, in equal distribution, just drill, and magic, oil appears. Laughing

George is also exactly right also in his comments, which should be intuitively obvious to everyone.

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Cycloptichorn wrote:

No, we continue drilling what we have, while developing alternatives. Why sink millions or billions into new infrastructure, which will quickly be outdated as the cleaner alternatives come on line?

Why? Because there is no guarantee that a new cleaner alternative that replaces our dependence on oil will be available within the ten (or 15) years. People have been looking for something like this for about 50 years now and have very little to show. What makes you think that this holy grail will appear within the next ten years?

So if reducing energy costs is your primary concern, then you should continue drilling what we have, drill more where possible, while simultaneously developing alternatives. If instead you feel that protecting the environment is more important than decreasing the pain at the pump, then be honest and state that. Don't patronize the public with vague promises of future painless cure-alls.

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Cycloptichorn wrote:

No, we continue drilling what we have, while developing alternatives. Why sink millions or billions into new infrastructure, which will quickly be outdated as the cleaner alternatives come on line? It's wasteful and not too hot on the environment at the same time.

Cycloptichorn

What "cleaner alternatives" will come online during the next ten years? Even the most optimistic forecasts for wind and solar don't indicate they will displace more than 15% of our requirements for electrical power in that period - that isn't enough to even dent our petroleum imports, even assuming we field the technology to use the electrical power so generated for transportation.

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georgeob1 wrote:

Cycloptichorn wrote:
No, we continue drilling what we have, while developing alternatives. Why sink millions or billions into new infrastructure, which will quickly be outdated as the cleaner alternatives come on line? It's wasteful and not too hot on the environment at the same time.

Cycloptichorn

What "cleaner alternatives" will come online during the next ten years? Even the most optimistic forecasts for wind and solar don't indicate they will displace more than 15% of our requirements for electrical power in that period - that isn't enough to even dent our petroleum imports, even assuming we field the technology to use the electrical power so generated for transportation.

Not too many cleaner alternatives will come online in ten years. But many, many will within 20; and the money in the meantime can either be spent accelerating this process, or adding to the infrastructure for oil drilling, transportation, refinement, more transportation, and burning.

When the more renewable alternatives come on line, that infrastructure will begin a slow and steady decrease in utility; better to spend that money on power generation and transmission that will last for far longer. Why invest in a new gasoline refinery, when gasoline automobiles are increasingly looking like a less attractive choice for the future? Et cetera.

If one is of the opinion (as I am) that NOTHING is going to provide a short-term energy solution for our country besides conservation and reductions in usage, the only strategy which makes sense to move forward with is to throw our energies into developing alternative power sources as quick as possible - such as, say, those large wind generators which were discussed in the other thread, which have progressed in technology far faster then it appears you had thought they had.

Cycloptichorn

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No, I was correct on the other thread in asserting that the largest wind turbines yet installed on a large scale basis were 1.5MW maximum power. old euriope posted information about new design 5 and 7 MW turbines being installed in offshore applications in the Baltic and possibly in the Irish Sea -- however these are very recent, and new, innovations.

Germany is heavily invested for political reasons in the rapid deployment of wind turbines, and I believe they are likely to achieve 20% of total electrical power generation within a few years. This is being driven by political forces there that wish to see the demolition of their nuclear power stations that today produce about 40% of their electrical power. Their problem is that even their most optimistic projections for wind power can't hope to replace the nuclear component in any reasonable time - even with very heavy government subsidies for the wind turbines. The public will soon feel the economic impact of the more expensive new sources and the political issue appears quite uncertain.

Here the situation is very different. With fewer subsidies wind generation is still less than 3% of total output, and, given the "environmental" concerns expressed by the liberal elite who summer on Cape Cod, it appears that implementation of offshore large wind turbines is likely to be very slow - even with the government subsidies that may be enacted. A similar story could be told for solar. Improvements in both technologies will likely continue, however we are at best looking at several decades before they can be major contributors.

You identified yourself as favoring reduced demand for energy as the primary solution. Short of a sudden major reduction in the population, how do you propose to force this on an unwilling public? Regulation?? taxation?? A government-managed economy?? Perhaps a police state??

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Gas Prices Pump Up Support for Drilling; Big Oil winning?

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