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gwen
gwenix
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April 2011
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gwen [userpic]
off shore drilling...

So, it seems that the general thought is that allowing more off-shore drilling will make our gas cheaper today. This is a total fallacy. For one, stop and think a moment -- allowing off-shore drilling doesn't mean drill stations spring up magically on the coasts instantly giving us more oil. First, the companies have to apply for the licenses to get there, then they have to do environmental surveys of the areas. Granted, these first two items are probably pre-done now just as a "just in case, wanna jump in" measure, but still, there then remains...

BUILDING THE OFFSHORE DRILLING RIGS.

Seriously, folks, did you stop to think about this? They're pretty major pieces of equipment on tumultuous waters, they take a while to build!

So, this is major flaw #1 in the thinking that offshore drilling will help your pump price.

The other major flaws are probably covered elsewhere, the big one being that the price of gas has very little to do with supply at this point, it's all about demand. Given that the demand is sharply increasing elsewhere (China and India) and they are willing to pay for it, our sweet deal of getting gas for cheaper because we're the biggest bulk is being undercut.

The price of gas is going to go up more, and stay up, folks. It's time to start planning for this appropriately and not look for magic cures that aren't actually going to help us in the immediate future, if ever.

Current Mood: quixoticquixotic
Comments

The average reply to that is "No, it'll lower gas prices 10 years from now, and if we did that 10 years ago, we'd have cheaper gas now. BLAME CLINTON!" But pretty much every expert I've heard on the matter has said if anything, it'll save a few pennies 10 years from now, and will last about 6 months.

Obviously the best you can do is simply drive less, and the higher gas prices have actually caused us as a country to do so. I don't have the figures handy, but the year-over-year drop in miles driven in June was in the billions. And it's affecting gasoline prices. Not a lot, but most of the recent "drop" has been attributed to the downward bump in gas usage, not some increase in supply.

There's also refinery capacity... which is way down currently because of the way the Bushies handled Katrina.

Well, there is the whole 'we have to do something' line of thinking. A push to drill might actually ease some of the pressure off the speculators that have pushed into the market after stocks and bonds lost their shine. In a pure supply and demand driven market something coming on line ten years from now probably wouldn't do much. However, since futures traders are skewing the market price something like this might have an effect. We wouldn't even have to drill you see - you only need to make it possible to drill to have that effect. You'd think people would see through something like that but recent experience (dot com bubble, housing bubble, every other bubble) shows that professional investors don't invest money rationally most of the time.

Personally, I think the whole thing a red herring. The North Dakota fields are probably a lot bigger and more profitable over the short term. I expect in 10 years the Marcellus field (and their ilk) will be taking care of a lot of transportation needs.

I keep hoping Thermal Depolymerization pans out (short form: turns almost anything into oil; poultry bits, sewage, tar sand, people...)

There are a few test facilities running, but haven't heard anything big yet.

If it does pan out, it could do quite a bit.

From what I have read offshore drilling would have no impact until 2030, which does us no damn good now. It might be time to invest in a horse.

Don't forget that the oil companies don't have enough rigs to drill in 3/4 of the leases they already have. Nor have they properly evaluated them (it takes that 10+ years to do the necessary searches on the ocean floor to find likely spots to drill)

This is totally a have your cake and eat it to situation. The oil companies want to take advantage of the current political climate to get the restrictions lifted, so that the land is available to the whenever they get around to it, but they don't actually feel any need to hurry up and develop those resources now because the current price it better for them up than down.