For your contemplation,
I for one am a supporter of more drilling. A little biased I guess, I am a drilling consultant LOL
Surging Oil Primes Political Pump For New U.S. Drilling
BY TERRY JONES
INVESTOR'S BUSINESS DAILY
Posted 6/18/2008
If there's to be a tipping point in the debate over America's energy future, President Bush's speech on Wednesday might just be it.
His remarks amounted to a line in the sand against those who refuse to acknowledge the fundamental reality of America's energy crisis: We need to drill for more oil ? and now, not later.
"Congress must face a hard reality," Bush said in remarks at the White House. "Unless members are willing to accept gas prices at today's painful levels or even higher, our nation must produce more oil, and we must start now."
Bush on Wednesday proposed a new plan that would essentially decontrol oil exploration and drilling on the U.S. Outer Continental Shelf, the 3- to-200-mile band of undersea bed thought to hold a minimum of 18 billion barrels of oil ? roughly equal to 10 years of current U.S. oil output.
Offshore, Off-Limits
A Democrat-led Congress imposed a moratorium on OCS development in 1981. It was extended by both the first President Bush and by President Clinton.
But since 1981, the U.S. has gone from importing 40% of its oil to about 65% today. From a national policy standpoint, the moratorium has been an abject failure.
Bush's new plan would also open up the Arctic National Wildlife Refuge.
As the president noted, the drilling will take place on less than 2,000 of ANWR's 19 million acres ? roughly 0.1% of the reserve. It would have minimal impact on either the environment or on the animals that live there. But the upside is 10 billion barrels of oil, possibly more.
A million barrels or so of this oil would be flowing today if Clinton hadn't vetoed it in 1995. Now we're paying with higher prices and greater energy insecurity.
Perhaps the biggest element of Bush's plan would exploit our enormous oil shale and tar sand reserves.
Bush uses a conservative estimate of 800 billion barrels of oil in our shale deposits; others, including the Rand Corp., estimate that as much as 1.8 trillion barrels lie under the so-called Green River Formation in Colorado, Utah and Wyoming.
That's more than the total reserves of 970 billion barrels held by the top 10 non-U.S. oil suppliers combined and equals 100 years worth of imports.
Finally, Bush wants to build more oil refineries ? something we haven't done since 1979.
The president's bold plan caps several days of significant events that appear to mark a major turnaround for U.S. energy policy. They include:
? A change of heart by GOP presidential candidate John McCain, who ? after opposing offshore drilling ? vowed on Tuesday to go after reserves off the coast. He also says he wants to build at least 45 new nuclear power plants.
? A similar reversal by Florida Gov. Charlie Crist, a longtime foe of drilling off his state's coast, who also changed his mind this week because "Florida families are suffering."
? A new Rasmussen poll released Tuesday (see chart) showing 67% of Americans now favor drilling for more oil, with 64% believing it will lead to lower prices.
These shifts of opinion are all quite reasonable, given that oil prices have more than doubled to $130-plus per barrel over the last year, while a gallon of gas sells for more than $4 a gallon ? cutting deeply into U.S. consumers' pocketbooks.
All this is trouble for Democrats. They have positioned themselves going into November's election as a party of high energy prices, rising taxes and slow economic growth ? that is, the party of former President Jimmy Carter. He tried all those policies, and they were a disaster.
Almost immediately after Bush's remarks, top congressional Democrats stood before the cameras saying things that, if current polls are correct, will likely be damaging to their electoral prospects in November.
For instance, House Speaker Nancy Pelosi claimed that Bush's plan "was literally written by the oil industry . . . (and would) give away more public resources."
Oilmen didn't write Bush's plan. It was dictated by the unavoidable logic of growing demand, soaring prices and slowing oil output ? not to mention a growing U.S. reliance on potentially shaky foreign suppliers.
As for the contention that this would "give away" resources, any oil company that explored or drilled on U.S. territory would pay royalties in addition to taxes.
This is important. Since 2002, the 27 largest oil companies have seen their tax bills soar from $15 billion to $90 billion. In 2007, the effective tax rate for oil companies was more than 40% ? above the top corporate income-tax rate of 35%.
'Obscene' Profits?
It's true, oil company profits have jumped. But as a share of revenue, they still hover around 9 cents per dollar ? in line with what manufacturers make and below the 18.4 cents per dollar made by drug companies and 13.4 cents by computer makers.
"Despite what President Bush, John McCain and their friends in the oil industry claim, we cannot drill our way out of the problem," said Senate Majority Leader Harry Reid. "The math is simple: America has just 3% of the world's oil reserves, but Americans use a quarter of its oil."
But Reid's math is way off ? as we've already showed. The U.S., potentially anyway, has more oil reserves than any nation. As for using a quarter of the world's oil, that is now declining, due to higher prices. It isn't falling in China or India.
No Alternative
Foes of drilling have pushed their own notion that alternative energy ? solar, wind, biomass ? will be a silver-bullet fix and will replace crude oil in fueling our economy.
This is a pipe dream. Every major forecast of future oil use through the middle of this century ? including those of the Energy Department and the International Energy Agency ? expect crude oil to make up at least 75% of energy supplies.
Today, the U.S. uses 21 million barrels of oil a day, but we supply just 8.5 million barrels ourselves. That's not enough.
The world uses 85 million barrels. This is growing by a million barrels a day each year thanks to soaring demand in China, India and the Mideast, which account for about 40% of the world's population.
The U.S. is competing head-to-head with those countries for resources, leading inevitably to both price and political pressures.
Given our thirst for oil, it's criminal to leave our ample resources untapped.
By 2050, the world will add 2 billion people, and the U.S. at least 100 million more, census estimates show. More people means more energy. But how much?
The Energy Information Administration estimates that energy demand will rise more than 40% by 2030. This is a tall order.
The IEA forecasts that the world's oil companies will have to invest at least $8.2 trillion between now and then to keep the world economy growing.
Yet, with Democrats calling for windfall profits taxes, pushing nationalization of oil companies (as two Democrats already have), and forcing oil company CEOs to appear before Congress seemingly every month, it's a wonder we have any oil at all.
When you demonize profits, you also demonize investments in the very companies that produce the profits. That means less oil, not more, in the future.
Put into perspective, from 1990 to 2006, U.S. oil companies invested $1.2 trillion ? compared with profits of $900 billion. Those who accuse them of "gouging" or "profiteering" are perpetrating a lie.
If nothing else, rebuilding our oil reserves will lead to a favorable decline in the huge number of dollars we send overseas for oil.
At current prices, the U.S. will spend $600 billion over the next year on foreign oil ? an amount only slightly less than our $700 billion trade deficit.
All told, the world is handing over a startling $1.8 trillion to oil producers ? a massive amount that's become a huge burden.
Thanks to our need for oil, the U.S. by default has become the No. 1 supporter of many of the world's most questionable petrotyrannies ? some of which are avid supporters of terrorism.
We do ourselves no favors by refusing to drill on our own soil.
I for one am a supporter of more drilling. A little biased I guess, I am a drilling consultant LOL
Surging Oil Primes Political Pump For New U.S. Drilling
BY TERRY JONES
INVESTOR'S BUSINESS DAILY
Posted 6/18/2008
If there's to be a tipping point in the debate over America's energy future, President Bush's speech on Wednesday might just be it.
His remarks amounted to a line in the sand against those who refuse to acknowledge the fundamental reality of America's energy crisis: We need to drill for more oil ? and now, not later.
"Congress must face a hard reality," Bush said in remarks at the White House. "Unless members are willing to accept gas prices at today's painful levels or even higher, our nation must produce more oil, and we must start now."
Bush on Wednesday proposed a new plan that would essentially decontrol oil exploration and drilling on the U.S. Outer Continental Shelf, the 3- to-200-mile band of undersea bed thought to hold a minimum of 18 billion barrels of oil ? roughly equal to 10 years of current U.S. oil output.
Offshore, Off-Limits
A Democrat-led Congress imposed a moratorium on OCS development in 1981. It was extended by both the first President Bush and by President Clinton.
But since 1981, the U.S. has gone from importing 40% of its oil to about 65% today. From a national policy standpoint, the moratorium has been an abject failure.
Bush's new plan would also open up the Arctic National Wildlife Refuge.
As the president noted, the drilling will take place on less than 2,000 of ANWR's 19 million acres ? roughly 0.1% of the reserve. It would have minimal impact on either the environment or on the animals that live there. But the upside is 10 billion barrels of oil, possibly more.
A million barrels or so of this oil would be flowing today if Clinton hadn't vetoed it in 1995. Now we're paying with higher prices and greater energy insecurity.
Perhaps the biggest element of Bush's plan would exploit our enormous oil shale and tar sand reserves.
Bush uses a conservative estimate of 800 billion barrels of oil in our shale deposits; others, including the Rand Corp., estimate that as much as 1.8 trillion barrels lie under the so-called Green River Formation in Colorado, Utah and Wyoming.
That's more than the total reserves of 970 billion barrels held by the top 10 non-U.S. oil suppliers combined and equals 100 years worth of imports.
Finally, Bush wants to build more oil refineries ? something we haven't done since 1979.
The president's bold plan caps several days of significant events that appear to mark a major turnaround for U.S. energy policy. They include:
? A change of heart by GOP presidential candidate John McCain, who ? after opposing offshore drilling ? vowed on Tuesday to go after reserves off the coast. He also says he wants to build at least 45 new nuclear power plants.
? A similar reversal by Florida Gov. Charlie Crist, a longtime foe of drilling off his state's coast, who also changed his mind this week because "Florida families are suffering."
? A new Rasmussen poll released Tuesday (see chart) showing 67% of Americans now favor drilling for more oil, with 64% believing it will lead to lower prices.
These shifts of opinion are all quite reasonable, given that oil prices have more than doubled to $130-plus per barrel over the last year, while a gallon of gas sells for more than $4 a gallon ? cutting deeply into U.S. consumers' pocketbooks.
All this is trouble for Democrats. They have positioned themselves going into November's election as a party of high energy prices, rising taxes and slow economic growth ? that is, the party of former President Jimmy Carter. He tried all those policies, and they were a disaster.
Almost immediately after Bush's remarks, top congressional Democrats stood before the cameras saying things that, if current polls are correct, will likely be damaging to their electoral prospects in November.
For instance, House Speaker Nancy Pelosi claimed that Bush's plan "was literally written by the oil industry . . . (and would) give away more public resources."
Oilmen didn't write Bush's plan. It was dictated by the unavoidable logic of growing demand, soaring prices and slowing oil output ? not to mention a growing U.S. reliance on potentially shaky foreign suppliers.
As for the contention that this would "give away" resources, any oil company that explored or drilled on U.S. territory would pay royalties in addition to taxes.
This is important. Since 2002, the 27 largest oil companies have seen their tax bills soar from $15 billion to $90 billion. In 2007, the effective tax rate for oil companies was more than 40% ? above the top corporate income-tax rate of 35%.
'Obscene' Profits?
It's true, oil company profits have jumped. But as a share of revenue, they still hover around 9 cents per dollar ? in line with what manufacturers make and below the 18.4 cents per dollar made by drug companies and 13.4 cents by computer makers.
"Despite what President Bush, John McCain and their friends in the oil industry claim, we cannot drill our way out of the problem," said Senate Majority Leader Harry Reid. "The math is simple: America has just 3% of the world's oil reserves, but Americans use a quarter of its oil."
But Reid's math is way off ? as we've already showed. The U.S., potentially anyway, has more oil reserves than any nation. As for using a quarter of the world's oil, that is now declining, due to higher prices. It isn't falling in China or India.
No Alternative
Foes of drilling have pushed their own notion that alternative energy ? solar, wind, biomass ? will be a silver-bullet fix and will replace crude oil in fueling our economy.
This is a pipe dream. Every major forecast of future oil use through the middle of this century ? including those of the Energy Department and the International Energy Agency ? expect crude oil to make up at least 75% of energy supplies.
Today, the U.S. uses 21 million barrels of oil a day, but we supply just 8.5 million barrels ourselves. That's not enough.
The world uses 85 million barrels. This is growing by a million barrels a day each year thanks to soaring demand in China, India and the Mideast, which account for about 40% of the world's population.
The U.S. is competing head-to-head with those countries for resources, leading inevitably to both price and political pressures.
Given our thirst for oil, it's criminal to leave our ample resources untapped.
By 2050, the world will add 2 billion people, and the U.S. at least 100 million more, census estimates show. More people means more energy. But how much?
The Energy Information Administration estimates that energy demand will rise more than 40% by 2030. This is a tall order.
The IEA forecasts that the world's oil companies will have to invest at least $8.2 trillion between now and then to keep the world economy growing.
Yet, with Democrats calling for windfall profits taxes, pushing nationalization of oil companies (as two Democrats already have), and forcing oil company CEOs to appear before Congress seemingly every month, it's a wonder we have any oil at all.
When you demonize profits, you also demonize investments in the very companies that produce the profits. That means less oil, not more, in the future.
Put into perspective, from 1990 to 2006, U.S. oil companies invested $1.2 trillion ? compared with profits of $900 billion. Those who accuse them of "gouging" or "profiteering" are perpetrating a lie.
If nothing else, rebuilding our oil reserves will lead to a favorable decline in the huge number of dollars we send overseas for oil.
At current prices, the U.S. will spend $600 billion over the next year on foreign oil ? an amount only slightly less than our $700 billion trade deficit.
All told, the world is handing over a startling $1.8 trillion to oil producers ? a massive amount that's become a huge burden.
Thanks to our need for oil, the U.S. by default has become the No. 1 supporter of many of the world's most questionable petrotyrannies ? some of which are avid supporters of terrorism.
We do ourselves no favors by refusing to drill on our own soil.
