Will offshore drilling DEFINITELY help the oil situation?
Answers
2183 points
ChaosNantuko answered one year ago …
Any drilling that is starting now, or ever any drilling that started less then 4 years ago, won't come on line production wise in any significant way for another 5 to 10 years. By that time, production will have fallen so significantly at all the places we currently get it from that this offshore drilling won't even make up for our losses in production.
As far as i'm concerned, it will be tremendously profitable, but of very little value in terms of lowering oil prices. We need a viable alternative, and fast.
678 points
BoxCar answered one year ago …
Drilling addresses ONLY the issue of Supply when Demand is easier to address.
Anyone w/a brane could overnite reduce Demand by resorting to lower speed limits.
When Russia invaded Afghan in 1980 we mass produced welded drill rigs for the purpose of drilling all our known oil field reserves then we "capped" the wellheads.
Why not open the spigots? Reason is- it costs $50+per barrel to mine Shale Oil
where the bulk of our future oil supply resides so we're not likely to see any effort by corporate America to increase Supply to reduce price of Oil, its more likely we'll see
efforts to reduce Demand to balance the economics and high oil prices are part of it.
123 points
BILLYJ65 answered one year ago …
I disagree with Chaos above. Just the possibility of accessing some of our reserves will spark a selloff by the speculators that have driven the price up. Don't be fooled into thinking that this price rise is a real supply and demand issue. At this second the world's supply is greater than the demand (which is dropping more every day) and the world is not near full production capacity right now. OPEC could pump out several more million gallons per day if they elected to. The US is capable of pumping a couple of millions barrels per day from capped rigs already sitting on top of proven reserves. This doesn't even take into account the untapped reserves offshore, the shale in the Rocky mountains or the vast amount under Alaska.
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951 points
Grudun answered one year ago …
I agree with Billyj65, some oil producers are holding back some of their potential supply because they think it will be worth more in the coming years. If they know there will be a significant increase in production in 4-10 years they will be more likely to pump the oil now and invest the cash than to hold it and sell it in the future for an unknown amount. Also when the additional production is combined with the increased CAFE standards(they will be hitting their stride in that time period), the public waking up to the fraud of human caused global warming, the natural migration of investment capital and other energy reducing initiatives it will be a lot of forces working together to reduce the future price of oil.
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traderpards answered one year ago …
Funny how this seemingly benign question brings out the polical hack in some of us. The lefties regurge the 5-10 years (that it will take to bring to market) baloney while the righties make the point that some oil could come online in as little as 1-2 years. In fact, a tapped well off the coast of CA could be ready by Oct 2009!! Why do we listen to these people who's main argument concerning ANWR drilling in 1996 was that it will take 10 years before it could come online? They had their say - they were proven wrong. This is a dumb argument argument - a red herring. Let the oil companies determine if off shore drilling would be profitable and how long it would take. Who among us honestly thinks that Congress really knows anything???
Their credibility is shot and that's that. If we had drilled then... (Well, you know!)
President Bush lifted the executive ban on offshore drilling and we watched the price drop $16. And traders know perfectly well that no drilling can occur until Congress lifts their ban - yet the price still dropped like a rock. You could argue that oil was extremely overbought and I'd agree with you. Neverless, the catalyst for the pullback was Bush lifting the executive order. Just imagine what would happen to the price if Congress went along too! And it would happen immediately!
379 points
dustbusterz answered one year ago …
i have to disagree with BILLYJ65 on his assessment. simply put, the OPEC nations have been promising for a while now to up production and nothing has ever come of that. why??? cause they are losing the ability to pump more than they currently do. their reserves are not infinite, and
we and many other nations have been depending on those reserves for way too many years. we have used up the biggest share of what lies in their grounds. this isn't to say they couldn't maybe drill for more in other areas within their own countries. but if they really thought they had more oil somewhere worth drilling for, don't you think they would have done it by now?
surely your going to have those who refuse to believe the truth ,but that doesn't make it false cause a few have this wishful thinking going on.
We are in a declining OIL environment and we seriously need to stop all this hopeful thinking about how these OPEC nations can and will bail us out and start fulfilling plans to create other sources and fast.if not, in 5 to 10 years, oil will cost double or maybe triple what it does now,not only that, your going to see many countries locking down exports to conserve for they own nations people.
411 points
jester112358 answered one year ago …
Agree with dustbusterz: The easy oil has been found. It is very expensive and requires a lot of expertise and capital to extract oil for the deep water location where large field might be found. All the major field in the world are showing declining production. This is the fundamental reason we will never see oil as cheap as we had for most the 20th century. High oil prices are a necessity as oil is critical to chemical production as well as transportation. We need to conserve what we have an high prices are the way to to that. As a research scientist, I can tell you that the so-called alternative sources of energy can only supply a fraction of that of fossil fuels and they require a lot of capital to develop.
I agree that psychologically, opening up offshore drilling might make us feel better as we are doing something positive, but it can't really deal with the problems associated with larger populations and increased consumption. Conservation, smaller cars, public transportation, car pooling are our best options.
