Oily politician, you say? - Where you from, Kansas?
Jun. 18th, 2008
08:41 pm - Oily politician, you say?
Having heard a clip from the President's speech about offshore drilling, I wonder if the robotic tone he delivered it in has anything to do with even he realizing it's utter bullshit:
Hopefully that will work... sorry about the fuzzlement; this is the first time I've tried embedding a Youtube video.
Anyway. Dubya has access to the best minds in the oil industry... he must know, as the The U.S. Energy Information Administration reported last year, that opening additional areas on the outer continental shelf would have a negligible effect on short-term oil and gas prices:
The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. (From the EIA) Annual Energy Outlook 2007)
Why is that? There are basically two reasons. First, from initial exploration to the first delivery of crude it takes years to develop a new oil field. There is no chance that these proposed new offshore wells would provide new supplies within a year or two. And the new areas are far from shore, in very deep water, and so will be more expensive to develop than earlier oil fields. If the cost is great enough (and there's an excellent chance of that), oil prices might increase in the short term, as the oil companies have to cover their costs.
And after 2030? Well, if we're still as dependent on oil by then as we are at present, we're screwed anyway. It won't matter how much is coming out of the Gulf of Mexico; production declines in the rest of the world will have rendered it irrelevant.
In short, we're stuck with $100+ per barrel for the duration. We can adapt, or not. There is no way to drill ourselves out of this hole.