Now we can talk for days (and I�m sure we will, because people here are just incapable to sticking to the subject) about why we should drill domestically for oil.

But I would like to keep this discussion focused on domestic drilling and how it lowers the price of oil or gas at the pump. The intent is to bust the myths associated with this subject.

It won't lower the price,no matter where it is pumped. Oil prices are controlled by the world market/specualators

+1

Ok I'll bite and here's a stab:
Aside from the obvious increase in supply eventually (Keeping in mind 87% of the continental shelf remains unexplored and untapped, not to mention the huge oil shale deposits out west, and of course ANWR and the Cuban Basin so that "we only have 3% of the world's petroleum reserves is a red herring),
the oil market is highly speculative (six cents on the dollar gets you in the game). Once the world realizes we are commited to this endeavor, the price of oil will drop. Yes it is a LOT cheaper for the Saudis to extract oil (about five bucks/barrel), but an unprecendented and unexpected commitment on our part will definitively go a long way to ameliorate the issue.

Good luck with this thread, Kevin.

No matter what happens, I know you had good intentions.

Certainly it lowers the price. It lowers it from the perspective that the speculators see the potential for increased supply and act accordingly and it lowers the price in the real world when the supply increases.

There are lots of reasons to drill and decreasing the price of oil overall is just one of them.

Of course it doesn't have anything to do with the price of oil if you believe the price is controlled by a vast conspiracy. Is that your position?

Imagine the current supply/demand structure, even with speculators. Now add 30% to the supply side, projected for the next 30 years. What do you think will happen? Think instead of the current supply/demand structure for the Winchester 63 .22LR rifle, and imagine if somebody found a warehouse with 4 million new in box rifles. What would that do to the price?

There's nothing magical about oil in terms of economics. It can come from anywhere in the world, and the final product is basically indistinguishable. If the US reduces imports by 30%, it will put a glut of oil on the market and prices will drop. OPEC will manipulate what they can, but that just brings things into balance in the new environment.

Supply and demand. While speculation is definitely a part, and has been responsible for many of the extreme price hikes, production plays a part as well, especially during recessions when demand is lower.

In the end speculation is based on a perceived future demand/production scenario. When it's perceived that a large producer may be effected by a catastrophic event, prices go up, when it's perceived that production will increase, prices go down.

The US as of March 2011, the US has the largest oil reserves in the world!! 163 billion barrels or 90 years worth at current usage!!!!!!!!

http://dailycaller.com/2011/03/10/new-report-says-u-s-has-largest-fossil-fuel-reserves-in-world/

Obama is desperate to "pretend" he is dropping oil prices and that is why he is head this charade of drilling until after he gets relected.

In 2008, Bush dropped oil prices from $147 a barrel to $32 by opening more drilling in 5 months.

Gas pump prices are driven by the "spot market" where people speculate on buying/selling contracts in the future. the bet (rightly so) has been that Obama will live up to his promise of raising gas prices to $5 a barrel. Only reality is starting to hit the clutz, that if gas stays where it is at, he will not be re-elected. Ergo, the false drilling shrill campaign until 2013 and then he cuts it off again to raise gas to his goal of $5 a gallon.

Drilling known reserves will kill the speculators and drop prices immediately. Known fact done before.

How stupid is it to let China and other countries drill right off our coast and not US companies.

FYI the oil companies make .02 per gallon consistently regardless of the price of a barrel. The difference is the spot market after it has been refined, not the oil companies.

BH

Why would oil companies risk billions of dollars in exploration, drilling, infrastructure, and refining capacity, all for the privilege of charging less money for their products?

The only reason Drilling occurs in many places is cause the price is high. Drilling will stop in many fields if the price drops to far. Makes drilling and completion too expensive.
Nautral Gas drilling is slowing down, oil drilling is up because the price of crude is up and natural gas is down.

Remember the gas and oil will still be in place 20 years from now.

A little example of reality.

March 2006, Prudhoe Bay suffers a leak, resulting in an August 2006 shutdown.

Oil prices in late 2005 - early 2006:

Nov - $53.20
Dec - $53.24
Jan - $57.85
Feb - $55.69
Mar - $55.64
LEAK discovered
Apr - $62.52
May - $64.40
Jun - $64.65
Jul - $67.71
Aug - $67.21

An 8% reduction in U.S. production resulted in a 10% increase in crude prices overnight and a 20% increase when it was announced that production would be shut down indefinitely.

Noooo..... U.S. production doesn't effect crude prices...

Well, the report actually said there were 143 billion bbl of recoverable oil and vast reserves of natural gas. Since we use 20-25 million bbl/day, the 143 billion gives us 17.3 years at current consumption.

To answer Kevin's question, yes, I do believe that domestic drilling will keep the speculative price swings in check because of supply/demand fundamentals. Whether the country has the political will to do so is another question entirely. We do have an enormous amount of fossil fuels of all types, the question is whether we have the political will to recover it, as the easily extracted energy is almost gone.

BTW, anyone who tries to sell you on electric vehicles has absolutely no knowledge of energy density and battery efficiency, or about the demands on our power distribution grid.

Here's a thought question, how much diesel fuel is the equivalent of a 10 hour charge for an electric vehicle?

Answer: .33 gallons. Energy density and BTU's favor diesel/gasoline over all other energy sources for motor vehicles. I would favor a diesel-electric or gasoline-electric hybrid over an all electric vehicle, but prefer an all diesel because of engine longevity.

Do you know the difference between profit and profit margin and more importantly do you know what the average profit margin the oil companies work with? The real issue is what I alluded to regarding the Saudis. Here's a hint, their profit margins are HUGE and where domestic production has to deal with OSHA,higher wages for the American worker and of course the ever present pestilence of unions, the Saudis can always have better control of the price. Still, when speculators can roll the dice by only exposing six cents on the dollar, we are going to have a volatile market. Also, higher prices recently are due to the huge decline in the dollar's value (about 30%) and of course we pay almost fifty cents/gallon to the Feds in the way of taxes. Bottom line still remains, drill here, drill now, pay less.

Don't forget the EPA Jorge. They just shut down a lease that Shell oil had paid $2.5 billion to drill, because they changed the air quality standards to such an extent that Shell couldn't meet them. That's what I mean by political will.

You have to have a product to sell.

All commodities are based on futures pricing. All companies that produce commodities, balance increasing production with stabilizing pricing....cattle, corn, oil, gold etc.

It does no good to rely on prices increasing from lowered production, if your (XYZ Corp) production is decreasing because you stopped expansion and your wells are drying up. You're just making ZZZ Corp's bottom line look good, who increased production to cover your decreasing/stagnant market share.

Absolutely the EPA. MArk that as another white elephant to be slain. They insist on among other things, over twenty six different blends of gas throughout the country based on junk science.

Speculators don't drill oil - oil companies do. Bringing more oil to the market will reduce speculation and the base cost of oil. Demanding that oil companies invest billions to undercut the price of their product ain't gonna happen.

I always felt that the USA should drill whenever and wherever we can and solely use our own crude. (if that is possible)

NOT relying on other countries...just our own.

I think fuel prices would be lower and we wouldnt be supporting other countries, just our own.

I'm not defending the EPA, but that's not correct. Shell left some simple numbers out of a permit application (GHG emissions from diesel tankers) and then declined to pursue the permit.

Nonsense, oil and oil services companies have been investing billions in R&D AND drilling for years. Look at Mike's post above. Shell dumped 2.5 billion into drilling and that is just in one area. Still, you didn't answer my question..

I use to think supply/demand was the controling factor in the price of oil/gasoline. I don't think so any more. There's no doubt that supply/demand has an effect the price but I now think the devaluation of the FRN$ has more effect on the price then the supply/demand on price. More people are speculating in commodities because they are trying to find a place of value for their worthless FRN$. Also all commodities are priced in FRN$ and as the price of the FRN$ goes down in value the price of the commodities has to go up.

That's my story and I'm sticking to it.

http://www.youtube.com/watch?v=LEsEvb1WsIY

Aside from lowering the price, how about the effect of giving less money to countries that hate us. Lowering their impact on the global economy and increasing ours.

Hemi

econ 101: greater oil supply will result in a reduction in price

OPEC: An illegal (under US law) collusion of producers to set/fix the price at higher than market rates. OPEC price fixing is not occurring in the current market because the price is already very high.

Speculators: Speculators increase demand in the short term and can drive up prices a bit. But eventually speculators, by definition, must sell, and prices fall again. Speculators may push prices from $90 to $100. But they are NOT what has pushed prices in the past from $32 to $147. Speculators are a bogeyman created by the Obongo administration to distract attention from the real problem: Obongo is using the EPA to reduce US oil production, thus reducing supply and causing prices to increase in the hope that it causes people to drive death box mini Coopers or electric cars, or else live in high rise ghetto apartments as that is his vision for the future.

Solution: Get rid of Obongo and the EPA. Let US companies drill ANYWHERE and build a few dozen new refineries. Oil prices will come down again, probably to the $40-$50 per barrel range.

Oh yeah, the oil companies will be lining up and spend billions to get a piece of that action.

Actually, get rid of the Federal Reserve and prices will come down.

Absolute stupidest thing we could do, bar none. Burning through our own reserves will make us the first nation to run out and become TOTALLY at the mercy of other nations.

They would love to build new refineries, but certain logistics are required, and the same people that don't want windmills on Cape Cod live in every suitable location.

hit $50 a barrel and they will quit drilling in alot of places.....hard to make money drilling the Bakken and Three Forks formations at $40-50 a barrel.........

Not at all, I don�t go for conspiracies in general. Oil is a worldwide commodity and the price is set on a worldwide market. If the US drilled EVERY LAST known reserve, we could change our imports by about 9%. Now that actually WOULD make a change in oil prices, but the change would be very small.

Jorge mentions something about the US having only 3% of world reserves. Not sure where that came from, but that�s complete BS. The US has a whole lot more oil than that, but not enough to change the world supply/demand situation. US oil production peaked in 1971 and has decreased every year since; that�s the fact. If we drilled EVERYTHING, we could spike up, but NEVER anywhere near where we were in 1969.

Hey, I�m ALL FOR domestic drilling, but to think it will change the supply/demand situation is just wrong, it wont.

It's the FRN$ guys.

GET RID OF THE FEDERAL RESERVE AND THE PRICE GOES DOWN!!!!!!!!!

Altho I didn't think he would have made a good President, Trump had the right idea about OPEC. Tell them to go $hit in their hat!

We can, and should be, self sufficient regarding oil. We refine our own, supply our own, and the OPEC oil will drop to the basement. Nobody buys as much oil as we do, and if our demand was removed, they would loose the BILLIONS they get now.

I also believe the normal passenger cars made here should all be compressed natural gas. We have loads of natural gas, and there is no reason a typical engine can't run off it. Standby generators do, without issue. Again, use our own resources.

Well there�s the problem; we don�t have enough. Even if we drilled every last known reserve, and for good measure, if we found 100% more than the reserves we have now, we would STILL have to import 40% of our oil. We use FAR more oil than the US can EVER produce�EVER.

I love your enthusiasm, but as it stands right now, we import 2% of our natural gas. Admittedly, we have many reserves that are un-tapped, but if we convert cars to natural gas the demands of natural gas will skyrocket, and we'll find ourself importing vast amounts of natural gas from the same A-hole's we import from now.

People need to realize that there isn't ONE technology or fuel source that will replace oil. We will need many energy sources to replace oil, natural gas will be just one of many; but it most certainly won't be THE replacement for oil.

READ ABOVE!!!!!!!!!

Look at this link:

http://www.youtube.com/watch?v=LEsEvb1WsIY

Someone bump the needle - the record is skipping.

I don't really care what domestic drilling does for prices. If it creates one stateside job i'm for it. Any price at the pump drops would just be a bonus.

Well, he has a point. Debasement of the currency via inflationary monetary policy has a great effect on the price of all commodities including oil. Oil priced in gold or silver is pretty much where it was in 1971. Taking away the gold backing for the FRN$ is THE proximate cause of the increase in the price of oil. Supply and demand and political vagaries also influence the price, but there is no denying that currency debasement plays a very large role.

WELL SAID!!!!

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.

As well as increase revenues to the fed and states through royalties and taxes.

I didn't mean to come off condescending. You did.

An enormous amount of oil company expenditure is on the unknown, Kevin. I thought that was why oil companies explore- You think they drill every well knowing there is oil there? They're in the business banking on the unknown.

"Peak Oil" has nothing to do with US production. "Peak Oil" is about world production, and it has nothing to do wtih running out of oil, never has. We won't "run out" of oil for a few centuries as best I can tell. Peak Oil is when oil production and demand hit their peak. The point where demand is now greater than our ability to get it out of the ground. This world will hit Peak Oil while there is tons of oil. The biggest factor in Peak Oil is the emerging middle class in developing nations. As they hit middle class, they want the same things that you and I have. And that is all driven by oil. Everyone agrees, there's not enough oil to go around.

THIS is why we should NOT be drilling ALL of our reserves. We should be drilling just enough, and use everyone elses oil first, saving ours for last. Meanwhile, we should be reducing our demand to ensure we have enough for the US, so our children have a future.

The only reason that new refineries are not built is because the government will not allow it.

I didn't read every single post so I'm sure we got to here in a logical fashion but THAT (meritous) point is completely different than 'Who here really thinks domestic drilling lowers the price of oil." A true free market oil exploration industry in the United States would dramatically affect supply. If you don't believe in the supply/demand pricing, well... it's a short discussion.

Here's a question for those on both sides of this discussion, "Why don't the infamous 'oil companies' charge $10 a gallon for gas? Heck, why don't they charge $100 a gallon?" Anyone? Anyone?
It would also be interesting to know how many people think oil companies set the pump price.

A new oil refinery is "in the works" to get built in SD to process Canadian tar sands.

http://www.businessweek.com/ap/financialnews/D9N6JU881.htm

Peak oil is the theory by M. King Hubbert that oil production will peak at a certain level then decline. He predicted to the year when production in the US peaked, and he has done the same for worldwide production. His theory is that oil demand will exceed production, thus driving the price up and forcing exploration into harder to extract sources of hydrocarbon energy. The difference in the supply curve and the demand curve is the peak.

Check out www.hubbertpeak.com

I did not know this forum had representatives from the Democrat Underground posting.

Yeah, and look what a [bleep]-up situation we are in. Are you one of the brilliant minds who brought us oil at $100 per barrel? Or do you drive a truck?

Maybe you need to go through benzene detox.

Ok,If oil companies only operate at 90% , because they have to do maintence on the other 10% ,isn't that operating at 100% of thier capacity if the 10% is always of off line.Seems like easy math to me.
If they refine a 900 barrels a day and must keep the maintence going,then to refine 1000 barrels a day,they have to have a capacity to refine 1100 barrels a day in rounded off terms.
In a stretch, theoretically,they could never reach the 100% design capacity ,so in reality theyare producing 100% of what they can.

Again, even considering retrofitting and upgrading, they will not build new refineries that would reduce the price of gas. Retrofitting/upgrading does not significantly increase refinery capacity.

In addition,they might not set the price of oil, but they reap the profit of it's increase.

Sorry, you did come off condescending to me, which is why I returned in kind.

Here's the reality of oil exploration. The BIG oil finds are gone. When we here of really big finds, it's all relative. They're talking about big for these days, not big in the grand scheme of oil production. These so called "big" finds are a fraction of what we found in Saudi Arabia or Prudhoe Bay. Also many of the "huge" oil finds you hear about today are not necessarily retrievable.

How much of OUR domestic oil are we exporting?

I suspect quite a bit.

We pump plenty now, stop exporting and start refining more.

Yes, that's the theory, but I don't know anyone who goes by that set definition of peak oil these days. In the days when geologists were telling people we're running out of oil, that was the model. But today we know that we won't "run out of oil" per-se, but our demand for oil will outstrip our ability to get it out of the ground. This will happen LONG before oil production begins declining each year; yet will still have the same effect.

I'm one of the brilliant minds (NOT) who was buying, but the reality is, I didn't have any more choice than anyone else. I work for a company that needs fuel to survive; therefore I buy fuel. Simple as that. I buy in the market, but I'm FAR from being anone who sets any trends.

There is an approximate 200 year supply of oil in shale formations out west and in the Dakotas. There is a 200 year supply of natural gas on tap also. I work in the natural gas industry. We also have an 800 year supply of coal.

We can make 1/3 or our natural gas from cow manure at dairy farms and feed stalls but it costs about twice that of drilling and fraking. Shale oil also costs a little more to extract than conventional sources.

My solutions:
1) Nuclear power plants to replace coal and natural gas power plants.
2) Use compressed natural gas (CNG) in fleet trucks and buses like city buses, garbage trucks, utility trucks, UPS, and postal delivery. This would eliminate 40% of imported oil, provide American jobs here, and could be done within 5 years. I've driven a utility truck over 100 miles at 70 mph on a charge of CNG. Then it only takes about 15 minutes to refill.
3) Use more diesels in cars and light trucks. They get higher gas mileage thus eliminating more imported oil. They are also less expensive to get on the market than hybrids. That can also be done in 5-10 years. Germany did this and 85% of their vehicles use diesel. They cut their imported oil in half.
4) Allow tax credits for algae oil production. Algae produces 10 times or more oil per acre than sugar cane, sugar beats, and/or corn ethynal. Converting the entire country to algae oil would take the equvelant land space of Rhode Island. I think we could manage that. Algae is also carbon neutral.
5) Use coal for synthetic oil and gas production.

Doing these things alone will bring the price of oil down, because OPEC will know we are serious. It takes ethynol out of the equation so food prices should also drop. It keeps coal industry alive for synthetic oil and gas. It keeps all energy production and money in the US, thus providing lots of decent paying jobs. Natural gas fleet conversions and diesel vehicle production can start almost immediately. Drilling starting now would not come on line for 2-5 years. Nuclear power and coal gasification plants would take 5-10 years to come on line at the earliest. Algae production could start now but would take about 5-10 years to get into full production. At some point either algae oil or coal gasification would win out cost wise.

Don't take my word for it any more than I would expect you to take what SteveNO said; look at the ACTUAL DATA and decide for yourself
http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WPULEUS3&f=W

I will try to simplify this again for those who are not grasping the concept.

More supply => lower prices.

More drilling + more refining => More supply.

Therefore if you want lower prices, pursue both more drilling and more refining.

The primary obstacles to that are Obama and his EPA.

You're about a year behind, Algae isn't working out nearly as well as they thought it would. Doesn't mean it's not a good technology, just means we won't be getting anywhere near the fuel we thought from algae.

From Wikipedia:
Only few studies on the economic viability are publicly available, and must often rely on the little data (often only engineering estimates) available in the public domain. Dmitrov[53] examined the GreenFuels photobioreactor and estimated that algae oil would only be competitive at an oil price of $800 per barrel.

http://en.wikipedia.org/wiki/Algae_fuel#Investment_and_economic_viability

You're not getting it. One ounce among gallons doesn't change the situation.

There isn't enough oil in the US to change the supply/demand dynamics; that's my point.
More drilling does NOT mean more refining; you don't know the first thing about the refining business, don't pretend you do.

None of this adds up to more supply in any way that will ever make a meaningful impact on the market. YOU'RE IN DENIAL

Look, I'm all for drilling, I'm all for more oil...I work in the industry, I WANT MORE OIL for Pete's sake. I want this more than anyone. But you can wish in one hand and chit in the other and unfortunately the only hand that holds anything of substance is the one you chit in.

KevinGibson, what is your solution to the energy problem. Imported oil costs us billions. It is over half the trade deficit. Natural gas and diesel vehicle production are immediate and quick solutions, but not for the long term. Either synthetic fuel from coal or algae are the only viable long term solutions.

Electric vehicle have a recharging time problem and a range problem. Also they cost far more than either diesel or natural gas to produce. Infrastructure is in place for both except natural gas requires compressor stations that cost about $100,000 to install, thus fleet use is the quickest conversion. A home compressor would cost about $5,000 for nightly slow charging, but refilling if traveling is a problem unless service stations install the compressor stations. Working in a natural gas utiliy we are trying to get at least one service station to install a compressor, with us providing the compressor, in each of the towns and cities we service. Most service station operators are reluctant to do so. It is an uphill battle.

Another note, algae production from ponds wasn't as productive as they hoped. However, in greenhouses it has proved to be more constistant and reliable. Exxon has recently invested several million dollars in greenhouse production.

Kevin,


One of the things which have lead to the Oil Price swings are the perception of disruption not a real disruption and not a current shortage.

Drilling in the US where the political and �security� environment is relatively stable will help alleviate some of those fears and help hold prices down� especially for West Texas Intermediate.

And while you have a point about the proven reserves in the US I don�t for a second believe we have a clue how much is yet to be discovered.

All that said, the �yet to be discovered oil� may be more costly to get and may take a while to develop those fields.

IMO

One of my favorite conservative business hero�s has it right; Fredrick Smith of FedEx. He sees energy independence as a national security issue and so do I; which is why I�m so passionate about getting the US off of foreign oil. For every $10.00 that oil goes up, our GDP takes a .02% hit (http://www.eia.doe.gov/oiaf/aeo/otheranalysis/aeo_2006analysispapers/efhop.html )
Put another way, every time oil goes up by $100.00, $75 billion exits our economy and is diverted to pay higher energy costs. Do you really want to continue along these lines?

You can find most of what I espouse here: http://www.secureenergy.org/energy-security-leadership-council/frederick-w-smith
Fred Smith is a leading conservative business man, and one of the largest consumers of energy on this planet; he might know a thing or two on the subject of energy. In short, the idea to use fossil fuel only for the things that can be run only with fossil fuel, big trucks and jets. For the rest, turn to
For highly urbanized areas, switch to electric. For suburban to rural areas a mix of gas/natural gas/bio & biomass fuel/electric hybrid. There are a number of very promising new technologies out there for alternative fuels; use them.
Switch the Northeast away from heating oil, to electric heating of their homes. Build more renewable electric plants, make use of tidal wave technology as a baseload supplement to Coal and Nuclear. And of course, don�t forget that we will always need coal and nuclear; but do whatever you can to minimize the use of coal and nuclear so as to minimize their undesirable side effects.
The idea is to make use of ALL technologies; rather than hang our hat on one (and we�re being screwed by that one technology now)

You make a point about current electric vehicle technologies; very valid point. But that technology is in its infancy and has a very promising future; invest in that future. If we get serious about investment in a future that sees the US energy self sufficient, the US can give the middle finger to the middle east (show my one American who doesn�t want that), and transform our economy into a robust economy free from foreign threat. We could reduce the size of our military significantly as we no longer have to keep the Middle East stable; they can take care of themselves. We would be energy independent, have a great economy, and safe from outside threats to our economy and way of life.

This is 100% doable, but conservatives need to join in with leading conservatives like Fred Smith and make this happen. Liberals won�t do it.

I have a saying, fundamentals set the course (bull or bear market), and technicals (speculators) set the price.

While the technical investors making speculations on the market can and do drive prices up, they only capitalize on an already established trend set by the fundmentals of the market. If the funamentals were't pointing to a higher price, then the fundamental investors would have stepped in and corrected the market from the speculators (which happens all the time).

I'm all for drilling every well we can drill. It's our lifeblood here in W TX with 400 rigs drilling here now. The very first thing that needs to be done is to take crude oil, natural gas, and fuels off of the NYMEX and go back to a strictly supply/demand based price. Take the speculators out of it completely. At least it would give the industry some price stability to work on their long range drilling plans. This $145 then down to $30 oil price was ridiculous and uncalled for.

Or we could just take America's demand out of the equation... and NEVER have to rid this train again.

I'll take a different tack.

Given that it's a finite resource, the wise long term plan seems to this lunk to be to continue to buy other people's oil, since we can afford it, and reserve our own reserves for the future, when the finite resource begins to tap out and things get desperate.

There are various estimates of when the world will begin to get real desperate for oil, but we KNOW that day is coming. Why not absorb a little pain now in the form of MAYBE slightly higher prices, while husbanding what we can of the resource, for the wee 'ittle children of the future?

I know, I know... crazy talk. Our needs RIGHT NOW trump any future generations needs.. just look at our economic and environmental policies for proof...

"Nameplate Capacity" is an official term in the production business and based on the plant design. It's typically a production rate such as gallons per minute or gallons per day, etc. Obviously the plant doesn't run 24/7/365 so the actual rate will be something less than the annual nameplate capacity.

That's also known as the 'hide under the rug' approach.

Stability? While states and feds may play with the tax structure, no-one is going to "nationalize" the fields. Obama would love to, but it ain't gonna happen. Spot-market speculators, as noted, have a large influence on it.

Also to be considered in the domestic-drilling equation are the benefits of jobs in our sphere, and the well being of Alaska's Permanent Fund. (Screw the rest of you. :))

Oh, and NoDak/NE MT area is BOOMING!

While I agree 100% and have been preaching the same thing for years - good luck. There is one solution to the price of gasoline: Competition.

However, in addition to all the politics of competing with oil, all competitors will be faced with the same and seemingly insurmountable problem of infrastructure.

I got brainwwashed in college in 1971 that by 2000 all fossil fuel would be exhausted and 20% of the earths population would be killed by pollution. IIRC that was a full up professor and the book was "The limits of growth".
I came out of there and built a super insulated solar house and 5,000 sq ft garden. When I started doing consulting engineering, I had to be fastidious about what I knew and why I thought I knew it. I suddenly realized I have all kinds of perceived risks affecting my values, that should have been calculated risks.
Having designed all kinds of solar and wind powered alternative energy equipment in the early 80s, I now believe in a completely market driven energy policy.
I know some people that own oil wells. I know some people that speculate in oil futures. I am fine with all of them.
I play a game at the gas pump. I look for someone who can hear me and say, "This is getting expensive".
I almost always get and angry response.
The way that politics works is:
1/3 of the electorate is well informed and committed liberals.
1/3 of the electorate is well informed and committed conservatives.
1/3 of the electorate is ill informed and uncommitted independents.
Those independents seem to really care about gas price.
I hope gas gets really expensive so we can get rid of Obama.

Per Mark Levin, who is Jewish and therefore is smarter than most of us...

20% of the electorate identify theyselfs as liberals
40% of the electorate identify themselves as conservatives
The rest are up for grabs.

By the way, unlike Obongo I am not angry at Jews. I am angry at the Obongo admin and its rayciss and pro commie policies.

Mark Levin has dwarf genes.
I have big muscles.
Who you gonna believe?

You are a retard. Read up on the issue.

First you said you "work in the industry" and now you say you "buy oil". Well I buy oil too dumbass.

It seems you started this thread just to cause arguments.

Moderators, I think this gentleman is abusing the forum.

Michelle Obongo has big muscles too.

Maybe I hsould believe her/it.

No Kevin is not abusing the forum, he is just someone trying to disabuse some of you of your inaccurate assessment of our true energy situation. It isn't pretty, it isn't easily understood, and it isn't easily addressed.

This annoys some to no end. We aren't used to having problems that can't be solved (or at least present the appearance of being solved) with demagoguery and bluster.

So we get threads like this one where imaginary theories and conjured facts get tossed around like so many poker chips. The biggest liar ends up making more talking points and declares himself the winner. :p

Will

There are several reasons we should drill domestically:

Oil prices are based on supply and demand, increasing the worldwide supply, prices drop

Oil field workers are highly paid, why wouldn't we want as many highly paid American workers, working in American?

The Fed and various State governments collect royalties on oil, why wouldn't we want to reduce our personal tax burdens by having part of the cost of oil going to the US fed and state governments vs. foreing governments?

More importantly, what compelling reasons do have not to increase domestic production?

Electric heat cost about double than what fuel oil does.It is triple what natural gas cost.At least here in Colorado.To say the NE should switch to electric heat shows a very nieve assessemnt of the problem. Everyone says to switch to electric cars,but no on ever admits to what it takes to produce electric to charge them with. Wind turbine and solar isn't going to cut it.

I'd like to see every oil well sunk that could be both on and off shore. But the enviornmantalist are not ever going to let that happen.Thier position to solve the problem is to let gas rise to $10 a gal and then people will stop using it.

China and India will suck up every gal of oil that the US does not buy and in the future it wil get worse.Supply will never meet the demand. Most are basing the figures on what is used today,but deny themselves the thought that in a short time the population will double what it is now.

RETARDED.

Natural gas is far cheaper, more efficient, and pollutes less per BTU consumed.



Mandating this is socialism, plain and simple. No wonder I thought I smelled Obongo weenie on someone's breath.

500G and I get a creative outlet by annoying each other.

Engineering, law, investing, double rifles, ect is a bunch of left brain activity.

If he accuses me of sleeping in my car, because of my wife, he gets to see how his other brain half lives.

Under all the insults, he is really an annoying guy.

And his vehicles look like out takes from the old A team TV show.

if this is so, why do they pay 7 cents /gal in arabia and some places in south america, and i think, lybia.

Because outside of the royal families it's a welfare state......the general population just survives, nothing more The State's subsidize the cost of fuel to try and keep the populous happy.

yea, and dont forget, they forgot to add in all that methane gas those oil field trash put out. grin

I cannot believe that so few people here understand the supply-demand curve.

yea, leaving out some simple no.'s caused them to cancel a 4 billion dollar project.

There's much more to the price of crude and fuel than supply and demand, as has been pointed out numerous times.

Kevin, I took your earlier comment:



To imply that we had experienced peak oil in the U.S.

Stating that we could never match the production of 1969 seemed to infer that that was the case. If you meant that we could not match 1969 production due to factors I pointed out such as the cost of production now, then I understand and agree that is probably the case.

I also agree, to a point, with your theory that we should not produce everything we have, though I think there is a balance and the negative effect it is having on our economy by not producing right now, may not be in our best interest.

Had we started production on ANWR in 2001 when we first had it shot down by the Democrats in the Senate, we would not be experiencing $4.00 gas in the middle of the longest recession in 80 years.

Rest assured that many of us that disagree with you do indeed understand a supply/demand price graph. It is just that we understand other things such as inelastic demand and price stickiness as well.

There is also the problem that to affect the final price you have to have the ability to significantly affect the supply. There are many of us who don't think America has this ability, not because of enviro pinkos but because of geology. :p

Will

no chit.....impatiently waiting for the drilling on the Bakken to shift another 35 miles east....damn difficult to get a hotel room here now mid week and its 40 miles to where drilling is really happening.....

the oil fields and their workers come with a chit load of headaches.....but they also bring alot of money that gets injected directly into the local economy.....know alot of guys that started driving over that way just hauling water for $18 plus an hour in a place where anything over $10 is a decent wage...the wages only go up from there.....

cant wait.....gonna mean some extra money for my business but also means a whole lot of money i can tap into for a couple service organizations i belong to that have been hurting for money lately......can put some of that oil money to a alot of good if it will just get over here....

Prudhoe Bay production has affected crude oil prices much more than it's % of U.S. consumption over the past 30+ years.

ANWR by most estimates, would have filled much of that void.

The funny thing about supply/demand is, an increase of X won't even be felt if demand outstrips supply by greater than X, but in a recession, when demand is soft, a 10% increase in domestic production can have a huge effect. Perhaps not down the road when demand increases from economic growth, but then gas prices don't have quite the negative impact on the economy during times of growth as they do during recessions.

Theoretically, the Senate's vote down of ANWR in 2001 and 2005 may end up the straw that broke the camels back, as the former would have resulted in full production at this time and the latter would be coming on line shortly.

Electric cars are fueled with coal.

The USA is the Saudi Arabia of coal and nat gas.

I'm sure the above are significant, but not to politicians and the current crop of social planners.

course its a beotch to build a new coal power plant......tried to build one in the middle of nowhere in eastern Montana in one of the lowest population counties and got shot down by the tree [bleep].....if yah cant build one in the badlands of eastern Montana where yah gonna a build one?

Both of these get to the heart of the matter. A good part of the price of oil is the inherent instability factor relating to where much of the oil the U.S. uses comes from. Most U.S. oil does not come from the middle east but enough does that it's a critical supply. The constant friction in that region results in instability in the price of oil, call it a "radical muslim jackass" tax if you will. If we decrease the percentage of our daily use of oil from these regions and replace it with home pumped oil I'll bet it'll have a significant impact on the price of oil worldwide as the instability factor to the U.S. will have been reduced, and like it or not the U.S. market is the main factor in the pricing of oil.

In other words, we've got to reduce the reliance of the oil market on the middle eastern despots. The region's too unstable and controlled by too many tyrannical dictators. As long as we're getting a significant supply of oil from these thugs we'll be paying an premium as the markets tack on that "radical muslim jackass tax" to the price of a barrel of oil. Just to show you how unstable OPEC is, Iran is the current country that holds the presidency of OPEC. It's done on a rotating basis and this is Iran's year. Ahmadinejad just fired the oil minister and took over the position himself so at least in theory Ahmadinejad is the head of OPEC. That certainly can't help the price of oil.

If we have 726M barrels in strategic oil reserves and the US uses 18M/year, it looks like the gov is stilling on a great commodities investment. Much better than those foreign banks holding in reserve the majority of falling US cash.

"inelastic"?
I can calculate gun firing rate or power supply transient recovery time, but they don't have human emotion in the loop.
If gas is $100/gal, you will bike to work, even if it breaks down your elastic underwear.

Exactly. Their Terrorist Training Camps are like the Boy Scouts here in America. It's what they do to keep the populace occupied and worrying about something other than how they live in abject poverty while their royalty live like...well, royalty. Anybody that thinks the top dogs over in the Islamic world worship anything other than the dollar are fooling themselves.

i think a key part of the equation is being left out. you can pull every barrel of oil out of the ground but unless you can process it it is virtually useless. refinery capacity in the united states has not increased since 1976-the date the last refinery opened. We saw what happened after Katrina when we lost the refineries on the lower mississippi.

Refining capabilities are not inconsequential, but they usually only come into play when a disaster such as the one you speak of, occurs. They are usually able to easily keep up with demand. Were it not so, the price of oil would not be tied to the price of gas nearly as much as it is. While many times attempts are made to prop up the price of gas after an oil price decrease, it only works so long. Oil and gas are inextricably intertwined, thus far.

All this bluster from the "it can't be done, we don't have the reserves crowd".

Whenever you read someone who says it's complex, and doesn't have a solution - run, don't walk the other way. You can put their finger on a map containing enough oil reserves to run the US for a century, - "it can't be done". You can explain that coverting electrical energy generation to anything other than coal ensures both electrical, and carbon-based energy for centuries - "it can't be done."

They will however say that oil has to go.

Run, don't walk.

In answer to the original post, obviously the answer is yes. Look at spot prices right now.(HINT, CLUE) There's a reason they are falling.

It is rather odd that folks on this thread who think global warming is hooey (and I would agree), buy into all sorts of superstition about oil. Depending on which estimate you want to believe, the US has 20 to 200 bn bbls of oil waiting... waiting... waiting... for the EPA to be disbanded.

Just a geology problem, fellas, nothing to see here....



What's $300 billion dollars kept in the U.S. instead of the Middle East? We're all just one big happy global family, right?

USGS estimates 10.4 BILLLION bbls in ANWR. That's more than the U.S. consumes in an entire year, yet the "pinkos" claim there is nothing we can do.....

Reminds me of the scene from Goodfellas....

"We had a problem.
We tried to do everything we could.
You know what I mean.....we couldn't do nothing about it."

Geology, fellas.... fahghetaboutit....

Nobody huh?

What has been pointed out is various things that affect supply and demand. Where has anyone pointed to anything related to the price of crude (or refined gasoline) in the United States that is outside of supply or demand?

It may not lower it but it sure won't raise the price.

Might not lower it, but it sure as heck ain't gonna cause it to rise...

PS- great minds think alike...

Scoop Jackson, a very senior Senator, said that increasing the cost of gas would not cause anyone to use less gas.

There are not just ninnies on 24HCF, they are running governments.

Don't assume that anyone can fathom useful underlying principals that predict the future.

What does it all mean?
Most people are stupid.
The few smart people have mostly wrong things in their head.
Don't expect much, and you won't be disappointed.

The falling US $$ is a major contributor to the increased price of crude. It has been stated many times here. Pure speculation, or flat out guessing that demand will increase is not a true supply and demand issue. Today we have 2.7% (app 3m/bbls) more crude than we had at this time last year. The price of crude on May 18, 2010 was in the neighborhood of $69. So let's see, more supply today, $30/bbl higher. Supply and demand is not a major contributor anymore.

Speculation IS 'demand'. (The devaluation of the dollar is also an affect of supply, albeit the supply of dollars.) The point is, the demand for crude (which obviously is not just for refined petroleum products), the biggest cost of goods in the manufacture of gasoline, does in fact affect the price. Refined gasoline is a commodity so it has it's own market but it is obviously not disconnected from the raw goods (crude). Yes there are a lot of other things that play into the equation but to attempt to minimize what positive effect increasing crude production will have is simply ... falling for it.

If demand is constant, then again, why don't oil companies charge $10/gallon for gas? If we can agree there is some portion of gasoline use that is NOT discretionary (as commonly defined) then there is some intersection on the supply/demand curve that would have them maximizing profits far above what they currently make. Or... is there? Surely those evil oil companies aren't missing an opportunity?

My BIL is the president and CEO of a fair sized retail chain/distributorship on the west cost. My brother retired from BP/Amoco, another brother did a stint for Sigmor, my first job out of college was working with BP in their retail distribution unit. I just mention that to say I saw/see nothing evil about the practices of the 'evil oil companies' when it comes to pump pricing and I saw first hand, the free market at work when it came to that pump pricing.

There are are two things the American public can do to affect pump pricing. Increase supply and/or reduce demand. The rest is theatre.

disclaimer: I do concur that speculators should be required to have the finanicial means to execute their contracts as otherwise (as currently operating) it is an unnatural anomaly on the supply/demand equation.

Picture of overdamped, underdamped, and critically damped responses.

Speculators or futures buyers speed up the response of the market.

I can see a criticism of scalpers, when there is finite supply tickets, but long term markets, the speculators provide some value for the little profits they take.

What about this fact of life?

Now that's funny!

OPEC still bases their crude pricing/exchange on the Dollar, I believe.

Crude prices versus Dollar to Euro valuation:

Dec 2008 (crude) $35.99 (Euro) �.78
Jun 2009 $67.68 �.70
Dec 2009 $71.75 �.66
Jun 2010 $75.09 �.82
Dec 2010 $89.43 �.76
May 2011 $117.12 �.67

As one can see their is no correlation between crude prices and the value of the dollar, at least in comparison to the Euro. In fact the dollar was stronger in relation to the Euro in Jun 2010 than it was in Dec 2008 and yet crude prices had more than doubled.

In fact the dollar was nearly the same against the British pound from the same time frame, Dec 2008 to Jun 2010. GBP .67 to GBP .68 and yet this was the time of the largest increase in crude prices.

Looking at another bellwether currency, the change in the Yen/Dollar rate between Dec 2008 and Jun 2010 only experienced a change of less than 3%, .93JPY to .91JPY.

Chinese Yuan? CY6.88 to CY6.83, again little change.

I just don't see the "falling dollar" as showing any effect on the price of crude. If we look back historically, the last time the dollar suffered a dramatic devaluation was in the mid 80's, specifically between 1985 and 1988. During that time the price of oil DROPPED from $26.92 to $14.87 for the same time period.

Foxbat what's your take on this? Visa/MC say US demand is down .9% over the past 2 weeks.

That's interesting Foxbat. I do know that I watch Bloomberg Energy News daily. Many, many times when the price of crude rises the traders blame it on the falling US $$. You can read for yourself there.

JG, I agree it's not strictly supply/demand when it comes to oil. Speculation, political pressures, currency valuation, supply, demand, perceived/real threats to oil production/refineries, new discoveries etc., all play a part.

I didn't know the answers before I went looking for them on the dollar's valuation/crude prices. Had there been a clear correlation, I would have agreed it could be a major effect, but the recent and historical trends just didn't match up.

Can the value of the dollar be a contributing factor?, Sure, but I don't see it as a major factor, at least until OPEC get's it's way and get's away from the dollar, then we will see price fluctuations in direct relation to the dollar increase. Right now I think it effects speculation more than actual pricing.

Look at July 2008 to Dec 2008, crude went from $135 bbl to $37 bbl in 5 months. It fell to almost a 1/4 of it's previous price in less than half a year. The dollar did increase in value during that time frame, but only a small fraction in comparison to the drop in crude price. Now what did take place during that time frame was a serious drop in demand.

Woooooooooohoooooooooooooo!

Whoever adds more product WILL lower the price given demand and all else remaining the same. It doesn't matter if its the US or Russia, added supply lowers the price.

However that is NOT the same for the price of gasoline. You have to separate the two. Oil is a world priced commodity. Gasoline is tied to the wholesale price of that product AND the cost of crude oil. For example, the price of unleaded on Monday settled at just under $3 per gallon.

So, you can't compare gasoline and crude in the same way.

Man, I'm glad we had more drilling.

I don't mind paying 2.42 for a gallon of gas at all

I do mind being layed off due to the price of crude and cheap unskilled labor in Romania


fugging replaced by some gawtdamm Romanian /romulan

fugging had to deal with 5 of em every 2 weeks
"training them to take our jobs"

took me bout 6-7 months to get proficient

according to our company
these clowns are ready after 2-4 weeks


ya right
fuggers don't even know how to work a tag line
or look for clear escape routes from loads
or remember simple rigging methods

teach em repetively the same things and they still don't get nothing and they just stand around like statues at every given chance

I really think without adult /American supervision some of these guys are gonna get killed and killed fast and rather gruesomely
sad to say it
but it will probably happen real soon




am I bitter

fugging right


so glad all the cooperate vp,s and office fuggers in Houston can keep their jobs and bonuses





hire a Romanian off a cruise ship with a off shore survival suit certificate put em on a deep water rig and presto you have a fugger working for 1/6 th of what you make and absouloutely no experience after his 2-4 week "training"






900 of us on off shore rigs got the axe world wide

half an hour before our helicopter briefing on the morning of 4 dec at the end of our 28 day rotation
4 of us americans got called in the office on the rig and told we no longer had jobs.........

pretty fugged up for sure

work your ass off for 28 days
compensating for having 5 Romanian spectators/workers around you "training to do yourjob" and you are working 3-4 times harder than you normally do
cause they just don't get it and a fast paced enviorment where things need to get done safe and quickly or else people get hurt and basically doing it all yourself

then a half hour before you leave at the end of your hitch you get told you don't have a job anymore
1 guy had 14 yrs
the other 2 had 7 and 9
I had a little under 2


3 other americans got the axe on their crew change on thanksgiving day

everyone is leary of their crew change day coming up now for sure



transocean can kiss my fuzzy white ass



im looking for a company that is smaller and hasn't overbitten its rig to contract ratio


their are better companys out for sure in the off shore industry.

Bitter [bleep]....

Yeah, that Sarah was totally wrong.

Drilling = good thing and lower prices

Very simple: Supply and demand.

If there's more supply and demand stays the same, prices will decline.

Oil is a fungible world commodity and the more there is on the world market, the lower the price will be assuming demand stays the same.

In a free market, no one "controls" the price. It's willing buyer/willing seller.

GunGeek: "I", think drilling (and fracking!) domestically "really" lowers the price of oil/gas!
Apparently you are ignorant enough to think it doesn't???
Get yo'head out'a yo'ass boy!
Pay a little more attention to what has happened to the price of oil/gas in the last year and you won't be asking such stupid questions.
Sheesh!
Hold into the wind
VarmintGuy

It has already done so. Why do the think you the price has fallen so much? It is because America is becoming a major producer of Oil. The Saudis (who can produce oil and drill cheaper than we can) are showing US they are still the boss. All we have to do is play along and lower our production and Oil will go back up in price. Until we do the Saudis will continue to overproduce and keep the price cheaper than is economical for US to drill these Shale plays. They will actually recapture some of the market share they have lost because we can't drill at much lower prices.

Jim

Remember guys, this was Gungeek's assertion back in 2011. We are now seeing the results of "Drill, baby, drill".

Yeah, I kept trying to tell you guys...

We already have proof. When the supply of oil is reduced the price increases. Like when OPEC lowers production. When the supply is increased the price goes down. Like it is doing now.

I always learn a bunch from these threads.

I paid as high as $3.84 last summer for premium, I filled up yesterday at $2.79.
Something is different.

Supply and Demand is what controls the market and price, not where it is drilled. Drilling here just lower our dependent on Middle Eastern Oil

i paid 3:08 for diesel this morning.

Supply will be curtailed by lower world oil price but a reduction in drilling from the Eagle Ford will probably not be part of it.

According to a Citi Bank report Eagle Ford east and west are both producable down to about $40/barrel. The Canadian tar sands and some of the Permian stop being econimical to drill at $50 or so. Supply will be reduced eventually and the market balanced.

Well, maybe a better question; what is driving oil prices to $50 a barrel?

The threat of $45:00 a barrel oil....

Mostly worldwide demand is way down but production is way up. And it's not just US produciton, it's mostly OPEC. Saudi Arabia just can't resist this opportunity because they're unlikely to have it again. With oil under $80.00 per barrel, they can seriously screw the US fracking industry because every barrel that's fracked at these prices is a big money loser for US oil companies. At some point, they'll have to shut it down because this isn't sustainable.

Meanwhile, low oil prices means Iran is getting royally screwed also. So oil prices will fall and stay under $80.00 per barrel for at least a year, mark my word.

This isn't exactly a "real" market, it's artificially low for a very specific purpose.

Too funny, you can't admit you were wrong.

There is no such thing as a fake market, one of silliest things I've heard. There are a variety of forces that drive the world oil market, sometimes those forces drive prices up, sometimes they drive them down. But those forces, the market, and the price at the pump are all very real.

Most fracking is done to extract the Natural Gas.

The oil itself is a "by-product", and not really the reason for drilling and fracking

Claiming the market is "false" is, well, FALSE

Most fracking in North Dakota is for oil.They are still trying to get the natural gas used up.ED K

UHHH, not me, the greed of man will see to that.

Not to be argumentative, your point about the oil market is correct. But there are fake markets. One example is the Carbon Credits market. A totally fake & useless product that would not exist if it were not for Gov't thugs.

Before answering your loaded question, I'd like to know what myths associated with this subject you intend on slaying.

There are areas of oil in the fracking zones (like the Eagle Ford), and there are areas of oil.

Gas prices are very low due to a glut of gas on the market now from all the wells. Little to no exportation of gas takes place because of the problem of compressing it for export.

What you are saying about oil being a by-product of gas production is exactly 180 degrees off.

There is lots of gas being produced as a by-product of oil exploration. Oil is the bread winner and money maker on the world market. Not gas. Gas is only used and consumed here. They are making progress in methods and infrastructure to export gas, but for now, there's a glut on the market.

Yes, it is "producible" at that price, but exploration will pretty much stop. They will produce the wells already in production, but with oil at $40 per barrel, even the major oil companies balk at paying in excess of $6 million to bring a new well online.

Major oil companies that are/were pushing 20 drilling rigs around the Eagle Ford, drilling one well after another will be reduced to only drilling the minimum requirements of the lease in order to keep their lease holdings intact until the OPEC folks let up. OPEC can't keep it up forever, and our guys know that.

But, in the meantime, a very good barometer would be looking at the rig count numbers for comparisons.

Eagle Ford Rig Count

http://eaglefordshale.com/drilling-rig-count/

We sold our ~100k acres earlier this year. Did the same with our
acreage in Kansas, Ohio and a portion in Colorado.

Well it�s not fake in the sense that it�s really happening. But if they shut down US fracking, do you think prices will stay that way for long? And if they don�t shut down US fracking, at some point these prices will hurt even Saudi Arabia. The market is �fake� because it doesn�t account for the cost of the underlying commodity. Which means at some point the price has to come back up, the question is just when. If you don�t think Saudi Arabia is manipulating the market, then I don�t know what to say.

Of course the Saudis are manipulating the market. The reason "why", is obvious, except apparently to you. It's their only play when it comes to stalling further increases in North American oil production.

I totally get that. But at some point oil will have to come back up to a level where they're making a profit. Selling below cost is creating an artificial market. Fracking is only making oil cheap because the Saudi's want to kill it. Once everything returns to normal, prices will be much higher with or without fracking. Fracking doesn't really affect world oil prices, but it does make us less dependent on the Middle East, and that's something the Saudi's don't want.

Exploration in the Appalachian Basn isn't going to slow (Marcellus & Utica Shales), at least much, in the core areas due to the economics being very favorable in dry and wet gas/condensate areas. I think low prices now will be good for the long term, as it is going to weed out some of the operators that cannot control cost very well.

What areas in Ohio, out of curiosity?

They spend a fair amount of time on the Palin threads talking about oil.
Posted by M. Joseph Sheppard Friday, December 12, 2014
...
What is happening in oil at the present moment is quite complex with long lasting impacts that 99% of Americans find difficult to comprehend or see coming.

We are witnessing an historic drop in the price of oil. Most of us see it as a welcome relief at the gas pump. But there are more fundamental consequences to the global financial system and to the geopolitical balance of power in the world. And therefore to the U.S. economy and to U.S. national security.

These interconnections of oil and energy to the stability of the world economy and political stability and to our own economy, political stability and national security will shape the 2016 election cycle political discourse.

Linked here is a superb primer on the risks to us and to the world from falling oil prices. The 27 minute video lays out those risks in a way that most people can understand.
http://www.oftwominds.com/

A key threat is the loss of income to oil exporting states. Those countries like Saudi Arabia, Russia, Venezuela, Iran, the UK, Norway and others rely on oil income to subsidize daily life in their domestic economies and more importantly from our perspective to invest in financial assets. Falling oil prices drains liquidity out of the global financial markets.

Another threat stems from the Financialization of Oil. Oil and more specifically the income stream anticipated to flow from oil production undergirds a mighty superstructure of DEBT used to facilitate production. Oil is the collateral of a highly leveraged speculative pyramid. That collateral is now impaired. It's worth less in the ground and in the pipelines and in the storage tanks. It is worth less in the future.

Impaired collateral should send shivers down your back. Think 2008 and the Sub-Prime debacle. The oil business is reprising the real estate business. Everybody thought real estate could go only one way--up. Similarly, everybody BET that oil was going only one way--up.

The consequences of a break in the RE market in 2007/2008 were monumental because the collateral of the trade got severely impaired in value setting up a cascade of adverse consequences in the derivative markets which led to Lehman Brothers and massive government intervention into the financial markets which continues to this day.

We have not yet begun to see the consequences of the impairment of the collateral that supports trillions of dollars of leveraged investments related to the production and distribution of oil. But those consequences are going to be GIGANTIC perhaps surpassing the Sub Prime crisis in order of magnitude.

It's about those credit derivatives based on $100 oil. With oil at $68 and some saying on its way to $50 the debt is de-collateralized and imperiled. Somebody is going to get burned here. Guess who?

This really bothers me. "People" thought RE could only go up in spite of the fact that they knew Gov't was forcing banks to make bad loans and, with just a wink, promising to make good on those bad loans.

Now here we have what amounts to a bunch of Peak Oilers controlling the oil-credit market when it really didn't take any education beyond reading the newspaper to realize that Peak Oil was a bunch of horse schitt.

I can say these things because I have been right on both counts.

Why are we so prone to listening to idiots?

I bet that their enemies, Iran and Russia, suffering has a lot to do with their desire for lower oil prices.

Exactly, the better run companys will find ways to lower their so called break even costs to compete.