Off shore oil development is back on - for now

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September 30, 3:47 PM

by John Ryden, Global Warming Examiner

 

 

Off shore oil drilling rig

President Bush insisted on excluding the usual ban on off-shore oil drilling and oil shale development that have been inserted in previous budget bills. Rather than fight the president over what is favored by a majority of the public, the Democrats in Congress removed the restrictions. So starting October 1st, the congressional ban on off-shore energy drilling will no longer exist.

There are estimates that these off shore areas contain tens of billions of barrels of oil. No one really knows how much oil is there since the initial survey work was done almost 30 years ago using technology much inferior to what is available today. There are several areas off both coasts that are particularly intriguing. The area off California could contain 5 billion barrels of oil. There are areas off Florida that are suspected to contain large amounts of oil.

But don’t expect to be filling up your car with gasoline from new wells anytime soon. It could take 10 years to see the first drops of oil. There is a very lengthy process to get this oil to market. A lot of the time to develop these resources comes from government delay. It will probably be several years before the government even develops a leasing plan. Oil companies will then need to do detail 3-D seismic studies, create development plans and environmental studies. The government will then review the plans and only if approved will the oil companies order the equipment they need to start drilling. If oil is discovered, the oil companies will then need to put in production platforms, pipelines, and oil processing facilities. Only then will the oil be available for market.

There is a lot to go wrong before any oil can be produced. The next president will have a huge degree of control over the timing of oil development. The next president could slow down the rate of leasing or only offer leases on the most undesirable of the off shore areas. This was the essence of the Pelosi plan that Democrats tried to pass through Congress earlier this year. She only wanted to open up the most distant, deepest water sections 100 miles or more off the coast and only in selected areas. To provide a further disincentive to development, no revenue from this leasing would be shared with the states that would be required to approve of any development off their coasts. This was a blatant political attempt to seem to allow drilling, but restrict it to areas that the oil companies would have little incentive to explore and in areas that states would not allow. We should be drilling the areas that are least expensive to exploit and potentially contain the most oil first. If that buys us the time to develop alternative energy sources like wind and solar, we may never have to drill in the deeper more expensive areas.

John McCain has supported off shore drilling and would likely push the timetable to bring the best resources on-line as soon as possible. Barack Obama has said he favors limited expansion into areas currently off-limits, but only as part of a broader plan that promotes alternative energy. He will not give any specifics, but he could mean that he supports Pelosi’s sham energy plan. This is similar to his favoring nuclear energy as long as it doesn’t produce any nuclear waste. (If you can’t store, bury, or recycle nuclear waste; it is very hard to envision how you could build a nuclear plant.)

I don’t expect there will be a lot of demand for oil shale development, especially if areas off shore oil are available for development. The technologies to extract large amounts of oil from oil shale have not been proven yet. Environment issues, access to water, and other problems will likely make this development a much future if ever event.

Removing the congressional ban is a start to a sane energy policy for this country. It will take decades to replace our current oil based energy infrastructure. We can’t continue the huge trade deficit to buy $700 billion per year in imported oil. It seems that it is ok to send $700 billion per year overseas to countries that don’t like us while it is disastrous to spend $700 billion in this country to keep our economy from sliding into a depression. We need a strong economy to fund the development of alternative energy. Developing domestic low cost energy sources is one way to keep our economy strong and growing.

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