http://climateprogr ess.org/2008/ 07/10/the- cruel-offshore- drilling- hoax-part- 1/
The GOP and McCain/Bush keep insisting that an end to the federal
moratorium on (some) offshore drilling is a major solution to
America's oil woes, even though Bush's own energy analysts make clear
it is not (see EIA bombshell: Offshore drilling "would not have a
significant impact on domestic crude oil and natural gas production or
prices¡í).
That Energy Information Administration analysis is, however, a couple
of years old, so I called up the author today and asked if it was
being updated. Turns out a new version will be published in a couple
of days, but she explained to me that the "answers are not very
different" ¡½ no significant impact for the duration of the analysis
(through 2030) ¡½ for reasons I will discuss below. First, however, it
wasn't until I talked to her and looked closely at the original
analysis ¡½ Impacts of Increased Access to Oil and Natural Gas
Resources in the Lower 48 Federal Outer Continental Shelf ¡½ that I
understood what a cruel hoax this whole issue is.
The oil companies already have access to some 34 billion barrels of
offshore oil they haven't even developed yet, but ending the federal
moratorium on offshore drilling would probably add only another 8
billion barrels (assuming California still blocks drilling off its
coast). Who thinks adding under 100,000 barrels a day in supply
sometime after 2020 ¡½ some one-thousandth of total supply ¡½ would be
more than the proverbial drop in the ocean? Remember the Saudis
couldn't stop prices from rising now by announcing that they will add
500,000 barrels of oil a day by the end of this year!....
Look closely. As of 2003, oil companies had available for leasing and
development 40.92 billion barrels of offshore oil in the Gulf of
Mexico. I asked the EIA analyst how much of that (estimated) available
oil had been discovered in the last five years. She went to her
computer and said "about 7 billion barrels have been found." That
leaves about 34 billion still to find and develop.
The federal moratorium only blocks another 18 billion barrels of oil
from being developed. But, as you can see, most of that is off of
California, which has bipartisan opposition to drilling from
Republican Governor Schwarzenegger ¡½ who, unlike McCain, seems serious
about his commitment to greenhouse gas reduction ¡½ and the Democratic
legislature, which remembers all too well the devastating 1969 oil
spill off the coast of Santa Barbara. Indeed, Karen Bass, the newly
appointed speaker of the State Assembly, said, "The idea of increasing
offshore drilling off the coast of California I think is absurd, and I
can't even imagine we would entertain that." Why would they, given the
risk to their beautiful coasts and their commitment to reduce
statewide greenhouse gas emissions 80% by midcentury?
So that only leaves about 8 billion barrels, which is about what the
world uses in three months. Not bloody much. And that assumes every
other state, including Florida, goes aggressively with offshore
drilling, which is exceedingly unlikely.
You may ask why big oil hasn't gotten around to the 34 billion barrels
already available to them offshore, given the staggering price for
oil? The answer is pretty much the same reason why the EIA analyst
told me that ending the federal moratorium is "certainly not going to
make a difference in the next 10 years": It ain't easy being non-green
off-shore.
As she explained, the constraints on offshore drilling have little to
do with the price of oil, but a lot to do with timing. Once the leases
are available, it is a 5 to 10 years before you get to exploratory
drilling. There is a tremendous shortage of drilling rigs and
manpower. Plus, offshore drilling is so expensive, you don't want to
make any mistakes. So you spend do a lot of seismic analysis to
minimize your chances of a dry well.
And it is probably another five or more years from drilling your
exploratory well to getting significant production from the area ¡½ and
that assumes you didn't dig a dry well. If you did, then you are
probably going to be even more cautious. And all that assumes you have
developed a pipeline infrastructure for delivering the oil. But the
Atlantic Coast lacks such an infrastructure, so who knows how long it
would take to get its oil?
Friday, 15 August 2008
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