Home Forums Hunting & Shooting Hunter's Campfire Who here really thinks domestic drilling lowers the price of oil/gas?

Well, maybe not just one job.

Might could put a couple folks to work I suppose.

You betcha I'm a broken record. You cannot price intrinsic commodities in an non-intrinsic commodity that has no purchasing power and expect low prices in intrinsic commodities.

I think speculators do have something to do with it. In the last couple weeks silver went from $50 oz to $35 wasn't that due to a margin call increase? It seems it had a ripple affect for commodities like oil and gold as they too were down. Perhaps because investors had to sell off those assests in order to meet the margin call.? The prospect of drilling is what BHO is hoping will lower the price of gas. New drilling in the Gulf of Mexico wouldn't be actually producing until he would be done with a second term.

And this is based on???

Pie in the sky ideas of how much oil in in the US. The ONLY credible source for information on US reserves is the Department of Energy (specifically the Energy Information Agency). Show me where the DOE says we have that much oil. Show me where you've done the math to come up with such figures?

You're a friggin genius; because no one else in the entire oil industry (and I work in the industry) has come up with such a solution.

It's pie in the sky; we don't have that much oil. And you need to understand that 50% of all the oil that is in EVERY reserve, is not recoverable by methods used today, so you have to reduce your numbers by 50% if they're going to have any meaning at all. Simply having oil in the ground doesn't mean chit unless you can get it out of the ground.

Don't pick some agenda ridden pundit's web site, go to the DOE and show me where anything you say has one slight element of truth. It's pie in the sky want; that's all it is.

Oil companies don't care where oil comes from. They go with the cheapest, easiest to work with supply, just like any other company that wants to profit. Oil is no different than anything else we import, it's just cheaper to get from other places, and the day that it becomes more profitable to move operations out of this country and import every product...they will.

Only at the pump price. The effect of the FRN$ on the cost of oil prodution isn't a factor. 'Drill here, drill now' assumes an oil company can improve profits while investing billions in domestic oil production in a country where there are no lines at the gas station.

Kevin: the 3% that I also said I don't agree with, was from the CIA website. But I also disagree on your assertion that if we drilled as I stated on my original post, we could go a long way towards self-sufficiency. Add to that the fact we can buy oil from Canada (#2 behind Saudi Arabia) and Mexico, we could be in a lot better shape.

speculation is fueled by perception....the fact that the US has voluntarily cut itself off from developing its own energy supplies....with low transportation costs and no political risk.

You can bet if there were more oil ,the companies would be exporting it to other countries,for a higher price,just like is done with coal and timber instead of keeping it in the US.

In the later seventies due to the so called energy crunch, oil shale business boomed in western Colorado.Then the slump hit and the oil shale business folded up as there wasn't enough moeny in it.Same thing would happen today.

There have been no new refineries built in the US for 50yrs, I think the figure is. The oil companies aren't going to build more when the ones they have are runing at 100% capacity, just so the US citizen can get cheaper gas.Nor are they going to drila bunch more wells so the price would go down.

1. It won't raise the price.
2. supply/demand. More supply is always good.
3. Domestic production is domestic, i.e. doesn't go to OPEC countries and doesn't need tankers, which has obvious benefits not the least of which is a trend towards the elusive energy independence.

BTW refiners never run above 90% due to rotating maintenance.

Gasoline is adjusted from region to region based on EPA regs issued by regional EPAs. Consolidating the adjustment of boutique gasoline into just two or three blends would improve pricing with no important change in what is acceptable to reasonable EPA standards.

Not really. It has also been pretty consistent at the spot price too. The average has been 13.5 barrels of oil per one ounce of gold since 1970. The low was 10.1 in 2000 and the high was 17.1 in 2010. The more monetary madness induced by the Fed, the higher that ratio gets. In 1980, 1990, and 2010 the ratio was 16.5, 16.5, and 17.1 bbl/oz respectively. Those times were also characterized by debt/currency crises induced by Fed monetary policies.

According to the EIA: http://www.eia.doe.gov/emeu/international/reserves.html

Known oil reserves (billions of barrels):

North America: 70.311
Middle East: 755.325
World Total: 1,238.892

US will use: 322,111.92 (26% of world supply, based on current 26% of world consumption)

Simple math my friends�the US doesn�t have that much oil, never has, never will; no matter how much we drill. It�s a FACT, we consume FAR more than we produce now, or could EVER produce. Do you see now?

We will NEVER be able to drill ourselves into self sufficiency. We simply cannot produce what we consume domestically. Simple math, it CANNOT be done.

So why do we continue to act as if we can? Only the crackpots think we can drill enough to supply all of our needs. The real minds are working on soultions, not arguing something that's settled and completely pointless.

And let me end by saying: I'm 100%all for domestic drilling. But domestic drilling isn't a solution to our problems by any means. I hope some of you can see that now. We need voters who understand the problem, to make INFORMED choices.

Note the word "known"?

The last oil refinery built in the US was in 1976. There haven't been any more built becuse there hasn't been much need. Oil companies have found it far more worth their while to upgrad and expand existing refineries, rather than build new ones. Refineries, like the BP Whiting refinery outside Chicago are constantly upgraded and 'rebuilt' as needed. The Whiting refinery is one of the oldest in the US, dating back to the 1870's (IIRC), but the current Whiting facility just got something like a 4.5bn dollar upgrade; it's essentially a new refinery. There is one building that remains from the 1870's mostly for sentimentality sake.

On the other hand, alternative fuel refineries are popping up like daisies; hell, I attended the ground breaking of one of them just last week.

So there's no grand conspiracy on the oil refineries. As soon as we really need a new refinery, we'll build one. But as of last week, our refineries are only at 81.7% of production and have been in the low 80% for the past 4 years. With production numbers like that, you won't find anyone standing in line to build a refinery that isn't needed.

Not necessarily so. Typically in a robust economy refinery rates are in the mid to slightly above 90's. See the historical rates here:
http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WPULEUS3&f=W

So you're banking on the unknown? Yeah, that's a plan.

Looking at production, we nearly equaled the production of 1967-1972 a decade and a half later in the mid 80's. In theory, if Peak Oil was right, that shouldn't have occurred.

Two other factors occurred at precisely the exact time that oil production began dropping around 1972....

The Clean Air Act of 1970 and the Clean Water Act of 1972. For good or for bad, we made it more expensive to produce oil here than elsewhere around the world. Oil companies go where there is a path of least (and cheapest) resistance to produce oil.

I do and here's why...


There are a lot of intelligent people already contributing to this� but I will add my $.02 any way.

As I see it, there are several reasons prices fluxuate, Change in demand, change in supply.

On the demand side we find ourselves in an odd spot� while we are a significant consumer of oil, other countries have increased and are still increasing their oil consumption (China, India).

So we can find ourselves with increasing prices even as our oil consumption drops.

On the supply side � let�s face it, when a large part of the world�s supply comes from unstable areas the price will be unstable.

There is also the fact that much of the worlds refining capabilities (outside the US) are geared to a specific type of crude and this can actually magnify the problem.

Having more oil production in the US will add stability to the market�

And expanding things out of the GOM will also add stability.

Oh yes� it will increase jobs.

Just sayen

turnaround decisions are scheduled years in advance.....to smooth out the supply curve. while turnarounds may be delayed for market reasons...that is very rare for the majors becuase it's a jigsaw puzzle with dozens of pieces....all the turnarounds in all the refineries are scheduled with a view to maintaining product flow, so if you delay one, you throw the whole schedule off for years.

there is also a danger that if you push the turnaround schedule....and delay it for too long, you get to the point where you have to shut down for maintenace, in an unscheduled turnaround that really screws up the system.

point being about the best you can count on long term is 90% utilization or a bit more.