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Higher production of crude in the U.S. or by the U.S. would increse the supply into the worlds market and reduce the spikes of the product due to speculation of disruption of supply by Iran, Iraq, Saudi, and Kuwait or other developments in those areas.
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Campfire Ranger
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One of the problems for the U.S. is that we've already taken out much of our cheaply extractable oil. The Bakken formation holds vast reserves, but it costs more to get it out of the ground. True, that. IIRC, the price of crude has to be in the mid-eighty dollar range to make drilling in the US economical?? Which, if true, I would think makes it risky for the oil companies/drilling firms to plan long term projects in the US? Just throwing that out there as a question for the guys in the know... That depends on the formation and the tax structure, which is why it is a complex issue. In Alaska the state drove up the taxes, so the oil companies drastically cut their investments in expanding production. Yet in North Dakota oil exploration is going gang busters. I don't know what the magic number is regarding $/bbl in the US, it depends on how expensive the field is to produce, and how high the taxes are. In general, most of the easy oil is gone. I'm anxious to see how Shell's exploration in Alaska pans out. I've heard the seismic indicates it is a major field. Seeing TAPS run at capacity, or if it's as big as I've heard them having to build another pipeline would be a wonderful problem to have. But the AK legislature has to pull their head out of their azz and get the tax structure to the point that the oil companies will increase investment and hence production. What seems to be missed in the discussion of the price of crude is that not only has it gone up due to supply issues, it's gone up due to our weak currency.
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Messages on bumper stickers often lack a grasp of reality....
Murphy was an optimist.
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One of the problems for the U.S. is that we've already taken out much of our cheaply extractable oil. The Bakken formation holds vast reserves, but it costs more to get it out of the ground. That's true, but ANWR is most probably the equivalent of Prudhoe Bay and we're still producing there years after it was supposed to dry up.
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Well, there is some truth to that and some fallacy. Every time some event occurs that effects a major drilling operation here, oil prices tend to be effected. Likewise, when a large deposit is found, oil prices, if not pressured to the contrary, tend to react in the opposite direction.
Oil prices are built on speculation and any perceived impact on production, whether here or worldwide, tends to have an effect. I have a saying: �Fundamentals set the market direction, technical�s set the price� (I�m sure I heard that somewhere, I�m not creative enough to have come up with that all by myself) So while the speculators do play a significant role, they only play a role in pushing up the last 5-20% at most�It always comes down to fundamentals. Fundamentals are first and foremost "supply and demand" and U.S. production will always be more stable and reliable than some areas of the world that produce. That doesn't necessarily mean that a new field in the U.S. will lower oil prices any more than a new field in the Middle East, but it does mean that the U.S. field is less prone to geo-political events that could shut it down. Would anyone argue that if all of Iran's oil fields were instead in South Carolina, that the price of oil would be the same right now? Not a chance in hell.
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I have a saying: �Fundamentals set the market direction, technical�s set the price� (I�m sure I heard that somewhere, I�m not creative enough to have come up with that all by myself)
So while the speculators do play a significant role, they only play a role in pushing up the last 5-20% at most�It always comes down to fundamentals. Then increasing domestic production would address both. An increase in supply from a politically stable region would remove speculation from the market. By your estimates 5 to 20 percent. I'll take that. You said it all comes back to fundamentals. Fundamentals would lower the price further. Who in the world is better at creating new methods to extract oil? And as for the Department of Energy being the lode stone of information in the US. Kevin you gotta realize they have been around since the Carter administration, guzzled trillions of tax dollars, and still cannot define an energy policy that is relevant and will lead us to energy independence.
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Higher production of crude in the U.S. or by the U.S. would increse the supply into the worlds market and reduce the spikes of the product due to speculation of disruption of supply by Iran, Iraq, Saudi, and Kuwait or other developments in those areas.
You need to add a lot of oil to the mix in order to affect world price.
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If you look at the data, if we drilled everything we have, we would still import 51% of our oil; so price would be largely unaffected.
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If you look at the data, if we drilled everything we have, we would still import 51% of our oil; so price would be largely unaffected. How do you arrive at that? Oil prices have been effected by Iran. Oil prices were effected by Libya. If we were contributing more to worldwide oil production, temporary slowdowns elsewhere, would have less impact. Sure OPEC could slow down production to keep the worldwide total production static, but OPEC members get edgy when they cut off their own revenue for too long. While not every rise in oil price is due to supply/demand, almost every time there has been an impact on production due to political instability, weather event, or accident, the price of oil has risen.
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Campfire 'Bwana
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before the election brobam will probably have a talk with his Saudi king and they will give the news they will increase production. Then he can open the strategic reserves and open drilling in the gulf. That news alone will probably result in a 10% drop in prices at the pump.
The tree of liberty must be refreshed from time to time by the blood of patriots and tyrants.
If being stupid allows me to believe in Him, I'd wish to be a retard. Eisenhower and G Washington should be good company.
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One of the problems for the U.S. is that we've already taken out much of our cheaply extractable oil. The Bakken formation holds vast reserves, but it costs more to get it out of the ground. True, that. IIRC, the price of crude has to be in the mid-eighty dollar range to make drilling in the US economical?? Which, if true, I would think makes it risky for the oil companies/drilling firms to plan long term projects in the US? Just throwing that out there as a question for the guys in the know... That depends on the formation and the tax structure, which is why it is a complex issue. In Alaska the state drove up the taxes, so the oil companies drastically cut their investments in expanding production. Yet in North Dakota oil exploration is going gang busters. I don't know what the magic number is regarding $/bbl in the US, it depends on how expensive the field is to produce, and how high the taxes are. In general, most of the easy oil is gone. I'm anxious to see how Shell's exploration in Alaska pans out. I've heard the seismic indicates it is a major field. Seeing TAPS run at capacity, or if it's as big as I've heard them having to build another pipeline would be a wonderful problem to have. But the AK legislature has to pull their head out of their azz and get the tax structure to the point that the oil companies will increase investment and hence production. What seems to be missed in the discussion of the price of crude is that not only has it gone up due to supply issues, it's gone up due to our weak currency. 458, Thanks for the reply. And yes, it does indeed sound complicated. My knowledge is mostly limited to the product I sell to a couple of drilling outfits in Texas. In that one case, the demand seems to be seasonal,for whatever reason, and not quite as dependent on the going price of crude as a guy might think.
"For joy of knowing what may not be known we take the golden road to Samarkand."
James Elroy Flecker
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Campfire Ranger
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If you look at the data, if we drilled everything we have, we would still import 51% of our oil; so price would be largely unaffected. What is your definition of unafected? Will prices drop in 1/2, unlikely, will they drop under $100/bbl, more than likely. I'd be all for dropping oil to $80-90/bbl vs 100+. Yes we are unlikely to be able to drill ourselves into hydrocarbon independence, but the number of high paying jobs we'd create, the reduction in our trade deficit, the increase in federal taxes from tariffs on oil, corporate taxes, and those high paying jobs would have IMHO the biggest single effect on our countries economy. Our countries head is firmly recto cranially inverted in terms of our energy policy. My idea of green energy is giving the greenis enough weed so they can smoke themselves into a stupor and get out of the way of the people that can turn this country around.
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if oil drops to far new drilling stops in the Bakken(and the other two formations that are with it).....IIRC oil has to be above $70 a barrel for drilling to be worthwhile here.....its a pain in the arse to get out of the ground and as such costs a fair amount of money.....lower prices are great but if they drop to far we will just eventually wind up back in the same spot....
i would just prefer it hit some level and stay there so you can atleast plan around it....yo-yoing is a pain in the arse....
A serious student of the "Armchair Safari" always looking for Africa/Asia hunting books
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Campfire Ranger
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yo-yoing is a pain in the arse.... That right there is why I majored in ChemE rather than Petroleum Engineering-I wasn't sure I could handle the ups and downs of that industry. 
"For joy of knowing what may not be known we take the golden road to Samarkand."
James Elroy Flecker
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Campfire Ranger
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How do you arrive at that?
Oil prices have been effected by Iran.
Oil prices were effected by Libya.
If we were contributing more to worldwide oil production, temporary slowdowns elsewhere, would have less impact.
Sure OPEC could slow down production to keep the worldwide total production static, but OPEC members get edgy when they cut off their own revenue for too long.
While not every rise in oil price is due to supply/demand, almost every time there has been an impact on production due to political instability, weather event, or accident, the price of oil has risen.
You're attributing way too much price power to speculation.
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Campfire Ranger
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If you look at the data, if we drilled everything we have, we would still import 51% of our oil; so price would be largely unaffected. What is your definition of unafected? Will prices drop in 1/2, unlikely, will they drop under $100/bbl, more than likely. I'd be all for dropping oil to $80-90/bbl vs 100+. Yes we are unlikely to be able to drill ourselves into hydrocarbon independence, but the number of high paying jobs we'd create, the reduction in our trade deficit, the increase in federal taxes from tariffs on oil, corporate taxes, and those high paying jobs would have IMHO the biggest single effect on our countries economy. Our countries head is firmly recto cranially inverted in terms of our energy policy. My idea of green energy is giving the greenis enough weed so they can smoke themselves into a stupor and get out of the way of the people that can turn this country around. Again, I'm in agreement on all those reasons to drill. Don't confuse my statement that price won't go down with me being against domestic drilling. We may be able to change the price of a barrel of oil by as much as $5.00; which won't translate to much that is measurable at the pump. As for all those other reaons, you bet and I'm all for it. But to think we'll drill our way to lower prices at the pump, that's a fantasy.
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Campfire Ranger
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if oil drops to far new drilling stops in the Bakken(and the other two formations that are with it).....IIRC oil has to be above $70 a barrel for drilling to be worthwhile here.....its a pain in the arse to get out of the ground and as such costs a fair amount of money.....lower prices are great but if they drop to far we will just eventually wind up back in the same spot....
i would just prefer it hit some level and stay there so you can atleast plan around it....yo-yoing is a pain in the arse.... That's a good example of just SOME of the complexities. To make such a simplistic statement as drill here & save money; it's just childish to try to simplify it to such a level.
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Campfire Tracker
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Some majors have partners that require partner oil to be run as part of the deal wherever it may come from.
http://www.dailypress.com/news/nationworld/sns-rt-us-tankers-shipments-saudibre8340y5-20120405,0,483714.story
We are in the project scouting phase looking at another world class gas to liguids (GTL) facility to be built in Louisiana to take all that dirt cheap gas (currently at a 10 year low) being developed and turning it into diesel and other products. I was fortunate to work on the first one we did in Qatar a couple of years ago. Pretty slick process. Only a $10B or so project.
The work we are persuing in the Chukchi Sea will be big (ca +30B barrels), that I am certain. We would not have dumped $4B in it to date if it wouldn't be.
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Campfire Ranger
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Some majors have partners that require partner oil to be run as part of the deal wherever it may come from.
http://www.dailypress.com/news/nationworld/sns-rt-us-tankers-shipments-saudibre8340y5-20120405,0,483714.story
We are in the project scouting phase looking at another world class gas to liguids (GTL) facility to be built in Louisiana to take all that dirt cheap gas (currently at a 10 year low) being developed and turning it into diesel and other products. I was fortunate to work on the first one we did in Qatar a couple of years ago. Pretty slick process. Only a $10B or so project.
The work we are persuing in the Chukchi Sea will be big (ca +30B barrels), that I am certain. We would not have dumped $4B in it to date if it wouldn't be. Tony, That sounds like very interesting work. I have never worked in the petro industry, but I could enjoy it, I think. Well, other than the "yo yo" aspect of things...
"For joy of knowing what may not be known we take the golden road to Samarkand."
James Elroy Flecker
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