Your power to end subsidies to oil cos. and fund clean energy

<div class='quotetop'>QUOTE(SSimon @ Jan 16 2007, 09:47 AM) [snapback]376318[/snapback]</div>

I specifically oppose this suggestion. I ask that you tell your representative to vote "NO" on this badly written legistlation.

This bill will increase our dependence on foreign oil by specifically discouraging exploration for new oil within the United States. Foreign oil is a key financial ingredient of terrorism and unacceptable human rights violations in third world countries.

Oil companies are not the "BAD" people. They provide a service to all of us. As publicly owned companies, most of their profits go back into your pocket via your stock holdings (personal or via mutual fund or via pension funds). The money they make is not hoarded by some mean "Darth Vader" guy.

 

I would think that we need to know roughly how much more domestic oil there is. There don't seem to be any large fields left, save ANWR and the new gulf oil discovery. New oil production will mainly offset declining production elsewhere in the US. Since our consumption keeps increasing we're falling behind and importing more oil, not less. So the question is, which benefits us most in the long run? Sacrificing oil production now or investing the same money into technologies that provide a viable long term solution to the problem. It seems obvious that continued oil exploration isn't going to yield much. Certainly not enough to affect the price of oil. Personally, I think that we should do both and pass the cost on to the consumer. They're the ones driving the market, not the oil companies.

 

<div class='quotetop'>QUOTE(tripp @ Jan 16 2007, 10:53 AM) [snapback]376364[/snapback]</div>

In general I agree with you. Ultimately, oil production within the USA is declining. It is just a question of at what pace. However, the answer is not so black and white... I would site the recent JACK discovery in the Gulf of Mexico by Chevron - these are reserves that just 10 years ago we did not think existed or technologically possible.

My personal view is that we need to push the boundaries of all alternatives. Some are popular, such as wind or solar power; others are not, such as nuclear and even population control.

<div class='quotetop'>QUOTE(SSimon @ Jan 16 2007, 11:00 AM) [snapback]376369[/snapback]</div>

Have you ever considered why Wind and Solar cannot compete? Maybe because the amount of "energy" it takes to make those systems is more than the amount they conserve. These systems definitely make me feel good - for environmental reasons. However, it is not a slam dunk that these systems are the "right" approach to our energy management problems.

Fundamentally, I am leary of anything that is controlled by government or requires a perpetual subsidy.

 

<div class='quotetop'>QUOTE(SSimon @ Jan 16 2007, 11:00 AM) [snapback]376369[/snapback]</div>

The same can be said about any one of our energy sources. Even wind and solar. We could say they can only provide a pittance of the energy we need.... so why bother with them at all?

Tripp is right on this one. It is an issue of minimizing decline and smoothly transitioning from one energy source to another. Should ANWR prove out, it will provide hundreds of thousands of barrels of production per day for 30+ years.

Again, I am not suggesting that we not push forward on the "good" energy solutions. However, we need to keep all of our options going and appreciate that each option provides positive and negative tradeoffs.

 

<div class='quotetop'>QUOTE(tripp @ Jan 16 2007, 01:53 PM) [snapback]376364[/snapback]</div>

My undertanding of the deepwater Gulf of Mexico find is that it's not economic to exploit it at under $60/bbl, but that's just something I recall hearing at the time. But there are several factors that suggest this will be fairly expensive to exploit. The oil's about 5 miles down -- 7000 feet of water, the rest rock, almost 200 miles off the coast. The oil companies announced their estimate as between 3B and 15B bbl, which of course immediately got cited as 15B bbl, or a 50% increase in US reserves. But it's not like the Saudi supergiant fields -- one big puddle of 15B bbl, so to speak -- it's a large number of discrete small fields spread over a large area. Because the ultra-deep-water drilling rigs are expensive, this may make it quite costly to exploit. Finally, there's no pipeline out there so they have to pump it directly to tankers, which means the volatiles can't be recovered.

Oh, here, I'm reinventing the wheel. Read this guy, I thought he got the facts right.

http://www.grinzo.com/energy/blog_entry_ar...06x09x11_4.html

The links at the bottom of the page are mostly worthwhile as well.

If fully exploited, at the high estimate, it would meet US consumption for about 2 years (we consume about 7.5B bbl/year). At the low estimate, it would meet US demand for a bit less than half a year.

The conspiracy theorists out there noted that the announcement was just prior to a big vote on Gulf drilling in the Congress. Chevron in fact announced the discovery in 2004, I think this well just confirmed it, so they sort of re-announced it. Not sure I believe the political angle but not sure I disbelieve it either. The gist being, this may be a Potemkin village of oil by the time all the facts are in.

Anyway, it's projected to be a lot of oil but in terms of impact on the US energy situation, maybe it is, maybe it isn't. It's certainly not cheap oil, and it might not even be profitable oil for the near term. But it's nice to know it's there. Better to pump that than to gasify coal.



<div class='quotetop'>QUOTE(John in LB @ Jan 16 2007, 02:25 PM) [snapback]376386[/snapback]</div>

Surely you meant "per year".

 

<div class='quotetop'>QUOTE(SSimon @ Jan 16 2007, 12:49 PM) [snapback]376422[/snapback]</div>

That is a 30 + year supply at a rate of approximately 500,000 barrels per day. Oil fields are not large tanks that can be sucked out at any rate desired. You have to "milk it" out of the ground - and each oil field has a "natural" rate that it wants to produce at.

Please note that the world produces 84,000,000 (that's MILLION) barrels every single day. each barrel is 42 gallons of crude (not gasoline - but still energy).

I realize that some people express a new oil field in terms of how long it can support consumption. It was stated here that ANWR would only last a year. That's a nice public relation spin that is powerful at getting everyone to think it's hardly worth the effort. However, it is not connected to anything real in the world. There is no such oil field. In fact, it takes thousands of oil fields to support world consumption. And 95% of them would last a year or less if expressed in those terms.

A better way to express ANWR contribution to the world energy demand is in terms of its percent contribution to daily production (it would represent slightly less than 1%)

PS: Chogan, I did mean per day and not per year. And yes, you are right... those number are huge and absolutely not sustainable over the long term.

 

<div class='quotetop'>QUOTE(John in LB @ Jan 16 2007, 04:06 PM) [snapback]376434[/snapback]</div>

My apology my mistake, I ran the calculation and slipped the decimal.

 

<div class='quotetop'>QUOTE(John in LB @ Jan 16 2007, 10:46 AM) [snapback]376361[/snapback]</div>

I'd venture to say the majority of citizens in the US don't have any holdings in oil companies, either thru stock, mutual funds or pension plans. Indeed I'd venture to speculate most US citizens don't own ANY stocks or mutual funds at all. Why go for a 'pass through' when the taxes I pay could go directly to public projects? Furthermore, if they don't get federal subsidies their top level CEO's will either have to take more modest salaries or face their shareholders who will face the squeeze. Now THAT'S capitalism. Subsidies are anti capitalism. Untaxed corporate income is antisocial behavior. Their profits depend on us, and they should pay for the right (thru taxes) to profit from the nation.

 

<div class='quotetop'>QUOTE(SSimon @ Jan 16 2007, 02:24 PM) [snapback]376442[/snapback]</div>

SSimon,

ANWR cannot be used as our sole source of oil. The fields there couldn't possibly produce at the rate of 20mb/d. There's no field in the world that produces at anywhere near that rate. The saudis have vastly larger reserves than we do, yet their production rates are about the same as ours. We have a lot more fields than they do scattered over a much larger area. They've been able to keep bumping their production up (for now) so by definition they haven't peaked, but they have to be careful how they do it.

Chogan,

Yeah, that "field" is not exactly low hanging fruit. Not only will it be expensive to produce but the risks to the infrastructure are such that I wonder if anyone's going to bother with it.

 

<div class='quotetop'>QUOTE(SSimon @ Jan 16 2007, 12:47 PM) [snapback]376318[/snapback]</div>

Are you referring to subsidies that are less than the alternative energy companies? Or are you referring to changing oil co. depreciation from 15yrs. to 5yrs. like those sponsoring windmills, etc.? When you say subsidies please clarify what it is you are talking about. Apparently you think oil companies are bad and alternatives are good, please advise on how soon a windmill car will be available.

 

It's a free market. That's what I keep hearing over and over.

Well, if it is, then every company should sink or swim on it's own merits, right?

So no subsidies for anyone.

Take the money and pay down the national debt.

 

<div class='quotetop'>QUOTE(SSimon @ Jan 17 2007, 03:06 AM) [snapback]377032[/snapback]</div>

So ends this forum. Another greenie who wants to make a political statement, of course against the GOP. No point in posting here for a discussion or information. What will really make these characters mad is that more "mainstream" people are buying hybrids.

 

<div class='quotetop'>QUOTE(SSimon @ Jan 16 2007, 12:47 PM) [snapback]376318[/snapback]</div>

Like all the posters here, I of course read the bill. It was an odd mix of (what appears to me to be) fixing the acknowedged error in the current lease rates, imposing a $9/bbl tax on domestic production (I think I got that right), and putting the money in a trust fund for clean energy. The trust fund part was pretty much a placeholder -- couple of paragraphs with no specifics.

As a matter of policy, I clearly would do the first, I would not do the second unless you had a very specific reason to do it, and I'd want to see more on the third. So, no, I'm not going to ping my Congressman on this, sorry.

Fixing the lease rate error should have been done already, but it looks like it'll take an Act of Congress to do it.

Taxing domestic oil only (which is how I read that) only makes sense to me if you are willing to encourage imports over domestic oil extraction. Otherwise, if you wanted to tax oil, tax all oil. Or better, tax carbon-based fuels in proportion to the projected economic harm from carbon release.

As a matter of national policy, taxing domestic oil only might be a reasonably smart thing to do, in the long run, to use up foreign oil first, and keep ours in the ground longer. But if that's to be a policy, it ought to be done with forethought, not as a side-effect of what is otherwise a bill dealing with oil lease rates. The reason I say this is that a) it looks like oil reserves are going to do nothing but get more valuable, and B) if we use foreign oil more now, we'll have some of ours left when the world is running out. Acknowledging that a) we aren't going to break our dependence on foreign oil, and B) even if we did the world will continue to depend on the Middle East for oil, so even if we kicked the habit, the problem is still there, then c) let's go for it, use up their oil first, keep ours in the ground for later. But I admit that's hardly a mainstream view. Although it's worth noting that it would require collective action to make that work -- individual oil companies would not have the option of attempting to convince investors that deferred extraction is preferred to current year extraction based on projected "capital gains" on the oil in the ground. The stock market just doesn't work that way. And you'd have to have all the stakeholders acknowledge "peak oil" before you could get agreement that this would be a reasonable strategy from a national security standpoint. The concept that preserving domestic reserves rather than exploiting domestic reserves is a good thing is either ahead of its time or totally out to lunch, take your pick.

And a tax by itself would not specifically discourage drilling in environmentally sensitive areas, so it's a blunt axe if the issue is the environtal impact of drilling.

On the trust fund, they pretty clearly need to write the rest of the bill.

Finally, I'd like to mention something about ANWR that nobody seems to have brought up. My best friend spent last summer in a course at the Colorado School of Mines, and the story he picked up there is that the oil companies lust after ANWR for the natural gas. Cananda doesn't have enough natural gas to process the tar sands. So, they were going to build a great big pipeline to take the gas from ANWR to the tar sands. And the oil in ANWR would just be a bonus. So, environmentally, it has two strikes against -- not only do you drill in a wildlife refuge, the output allows you to process the carbon-intensive tar sands. Has anybody else heard that story?