I am going to be critical of an Obama policy. Or at least relay some criticism.
The sad part it, I was hopeful when I first learned about this idea- that offshore drilling would be allowed by the Obama administration. Unfortunately the policy is very limited and will not begin for several years. It is also tied into an energy tax, which is exactly what a recovering economy needs.
The Left is unhappy that any kind of drilling will occur. Some drilling is better than none I suppose.
Any thoughts?
03 April 2010
Surprise, Surprise
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2 comments:
Sine I work for an oil company, I obviously have a biased opinion about this. Anyway, here goes ...
The government has not allowed oil companies to do any research on the forbidden areas of the US for a very long time. In that time, technology has come a long way. We are far behind and now much better suited to do the research to see what is actually down there. Maybe there is nothing. Maybe there is more oil than we can possibly imagine (not likely in my opinion). But, we will not know until will look.
And that is the first part of this: we have to look. The fact that the government is allowing us to look is HUGE. I do not even care if they allow us to drill right away. At least we can get an idea of what we are dealing with. That way, we can determine if it is economically feasible to go after it. It may be too hard to reach. It may be really small. But, at least we know.
Once we have an estimate for what might be there, then (and only then) we can decide on drilling. Drilling technology has come a long way as well. Gone are the days of uncontrollable gushers. We rarely even find wells that have the capacity to do that any more. If we did, that means we would have stumbled upon lots of oil. Most wells are very difficult to extract oil from. Underwater wells are tough. Plus, they take years (decades some times) and billions of dollars to develop.
On the "pro-drill" side, just some numbers to keep in mind: 60% of the oil we consume comes from other countries. Conservative guesses (and that is all they are: guesses) suggest the amount of oil we can get from the newly opened areas could turn this number to zero and actually turn us into a net exporter. I am not about to argue this is the case, but I do argue we need to do the research so we at least know. Otherwise, we will not understand the reality of what our imbalance of oil is in the world. And we will continue to rely more on foreign sources. This means we will be vulnerable to price swings since we will not control most of the oil we consume.
Now, say we do find a huge amount of oil. Please do not forget what we have learned these past years: conserve EVERYTHING. Carbon from natural sources (oil, natural gas, etc.) is better placed going into materials and things we can use (and recycle). It is not well placed as something we burn. Increased drilling is not the magic bullet that is going to save us all.
Thanks for the insight.
I like the last paragraph, and agree. I just feel like it ought to be market-based rather than governmentally enforced.
Of course, $2 gas doesn't provide incentives the way $4 does.
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