EIN News says, "U.S. Scrambling to Meet Offshore Drilling Date. The Obama administration has less than 10 months to finish assembling its plan for selling offshore drilling leases over the next five years, and some oil industry leaders are worried the government is barely on track to meet a July 1 deadline for issuing the document. (chron.com)".
This issue has been made unnecessarily complicated. There is so much written about it that it takes a tremendous amount of time to sort out the relevant facts.
However, the Outer Continental Shelf Lands Act was created by Congress in 1953. Congress designated the Secretary of the Interior as the administrator of the act. The Minerals Management Service (MMS) was the bureau within the Department of the Interior that is
responsible for implementing the requirements of the Act. A 1996 study by the US Minerals Management Service (MMS) estimated undiscovered conventionally recoverable resources in Atlantic federal waters to be 7,200,000,000 barrels (1.14×109 m3) of oil and 27.5 trillion cubic feet (TCF) gas. This means we are really talking about a large potential increase in US oil production. Previous drilling under the old five-year plan was not productive, but there has been significant improvement in drilling technology.
Section 18 of the Act calls for the preparation of an oil and gas leasing program indicating a 5-year schedule of lease sales
designed to best meet the nation’s energy needs.
The MMS is in the process of preparing a possible new 5-year program for 2010-2015, to replace the current program for 2007-2012. The last five-year plan will end on June 30, 2012. It must be either reinstated or replaced by a new plan. In either case, Congress and the President must approve the plan before it can become effective, which means leases can be offered. Required by law, the document lays out every planned government auction of drilling leases in federal waters for a five-year period. If a sale doesn't make it into the plan, it can't happen. "In the offshore, nothing happens without the five-year program," noted Dan Naatz, executive vice president of the Independent Petroleum Association of America. "It is the bible" of how offshore development moves forward.
My concern is the integrity of the approval system.
Elizabeth Birnbaum was head of the Minerals Management Service at the time of the BP oil spill in the Gulf. She was forced to resign. Her replacement is Michael R. Bromwich and the MMS name has been changed to Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). The key point is that Bromwich works for Interior Secretary Ken Salazar, who in turn works for Pres. Obama. The Obama/Salazar program has been to strongly support sustainable energy sources, such as solar and wind and to inhibit further petroleum production.
I caution Congress to not let the five-year lease plan default or be replaced by something which is contrary to further development of US oil production through its leasing program. More succinctly, Congress should pay close attention to what Obama and Salazar are doing in this area.
Monday, September 12, 2011
Thursday, September 8, 2011
More Oil and Gas Drilling
EIN News says, "U.S. Supercommittee Should Boost Oil Drilling, Chevron CEO Says The CEO of oil giant Chevron Corp. said Wednesday that the bipartisan deficit supercommittee should expand U.S. oil-and-gas leasing, joining a senior House Republican in urging the panel to wade into energy policy when it meets this fall. (thehill.com)".
Well! Not only do we have a CEO with the right answer but one who also has the guts to say so.
Expanding US oil and gas leasing will lead to more drilling. This makes drilling jobs.
More drilling makes more oil and requires more employees to refine and transport it.
The increased oil supply reduces the price per gallon of gasoline and diesel fuel. This allows manufacturing companies to use more energy in their production operations, which will then require more employees.
This is a win-win situation, except for the Communist inclined US federal government, which wants pie-in-the-sky wind energy, solar energy, tidal energy and maybe even harvesting the energy of cows chewing their cud.
Well! Not only do we have a CEO with the right answer but one who also has the guts to say so.
Expanding US oil and gas leasing will lead to more drilling. This makes drilling jobs.
More drilling makes more oil and requires more employees to refine and transport it.
The increased oil supply reduces the price per gallon of gasoline and diesel fuel. This allows manufacturing companies to use more energy in their production operations, which will then require more employees.
This is a win-win situation, except for the Communist inclined US federal government, which wants pie-in-the-sky wind energy, solar energy, tidal energy and maybe even harvesting the energy of cows chewing their cud.
Wednesday, September 7, 2011
Drill, Drill, Drill
EIN News says, "Big Oil: To Create Jobs, Let Us Drill More Widely With job creation taking center stage in American politics, the oil industry made a pitch for drilling more widely. With looser restrictions, the industry says it could deliver 1.4 million new jobs, boost tax rolls by $800 billion, and increase domestic energy production almost 50%. (cnn.com)".
Does this make sense to you? It's kind of obvious to me. I have been saying for some time that the federal government has been inhibiting job creation by limiting drilling operations.
I'm not sure how the oil industry calculates comes up with 1.4 million new jobs, but I can tell you that with increased drilling operations, more oil will be available and gasoline prices will fall. This will then spur the economy by people not worrying as much about fuel costs and getting on with the major aspects of getting work done.
Does this make sense to you? It's kind of obvious to me. I have been saying for some time that the federal government has been inhibiting job creation by limiting drilling operations.
I'm not sure how the oil industry calculates comes up with 1.4 million new jobs, but I can tell you that with increased drilling operations, more oil will be available and gasoline prices will fall. This will then spur the economy by people not worrying as much about fuel costs and getting on with the major aspects of getting work done.
Monday, September 5, 2011
Evergreen Solar Energy Is Defunct
EIN News says, "60% of Gulf of Mexico Oil Output Shut by Storm More than half of U.S. crude oil output in the Gulf of Mexico was shut in on Sunday as Tropical Storm Lee hindered efforts to restaff and restart oil and gas platforms in the basin. (reuters.com)".
This is a regrettable incident, but must be taken as part of operational costs. In spite of what junk scientists say, we cannot control the weather. Fortunately, these storms last a short time and have an effect of only a few weeks at most.
Conversely consider man-made fiascoes. The Obama Administration held up the granting of drilling permits to limit production of US oil. It wanted and probably still wants to have what it calls a "sustainable" energy source. The problem is that while this may be a good idea in some centuries to come, it is not applicable at the present time with availability of significant quantities of cheap petroleum, if we are not inhibited from getting it.
Evergreen, a solar energy company, has just gone bust with their filing for bankruptcy. The state of Massachusetts put $58 million into subsidies and tax benefits for the operation. Mitt Romney was fortunately not the governor at the time. If he had been, he would be taking it on the chin now, on top of the Massachusetts health plan, which is a dead ringer for that of Obama's federal program and an economy killer.
It all boils down to pie-in-the-sky versus reality. Petroleum is reality. We use plenty of it and could use more. Solar energy and wind are pie-in-the-sky. Without subsidies, they cannot compete with petroleum in spite of the hurdles that the Obama administration has been placing on the petroleum industry.
This is a regrettable incident, but must be taken as part of operational costs. In spite of what junk scientists say, we cannot control the weather. Fortunately, these storms last a short time and have an effect of only a few weeks at most.
Conversely consider man-made fiascoes. The Obama Administration held up the granting of drilling permits to limit production of US oil. It wanted and probably still wants to have what it calls a "sustainable" energy source. The problem is that while this may be a good idea in some centuries to come, it is not applicable at the present time with availability of significant quantities of cheap petroleum, if we are not inhibited from getting it.
Evergreen, a solar energy company, has just gone bust with their filing for bankruptcy. The state of Massachusetts put $58 million into subsidies and tax benefits for the operation. Mitt Romney was fortunately not the governor at the time. If he had been, he would be taking it on the chin now, on top of the Massachusetts health plan, which is a dead ringer for that of Obama's federal program and an economy killer.
It all boils down to pie-in-the-sky versus reality. Petroleum is reality. We use plenty of it and could use more. Solar energy and wind are pie-in-the-sky. Without subsidies, they cannot compete with petroleum in spite of the hurdles that the Obama administration has been placing on the petroleum industry.
Tuesday, August 30, 2011
US Money Grants to Libyan Rebels Will Control EU Boycott of Syrian Oil
EIN News says, "EU Readies Ban on Syrian Oil Imports European Union members are expected to approve an oil embargo against Syria by the end of the week, diplomats said, serving a financial blow to the Assad regime, which continues to crack down on its citizens despite sweeping criticism. (france24.com)".
Notice that this is not yet a ban.
Thanks to US support of more than $1 billion, the EU may have access to Libyan oil if the rebels cooperate. With Libyan oil, they can cooperate with the US in trying to change the face of the Middle East.
The ban will only come into effect if it can be assured that the rebels will supply oil to Europe. That will take a US money grant to Libyan rebels, and the Obama administration has already promised this.
Notice that this is not yet a ban.
Thanks to US support of more than $1 billion, the EU may have access to Libyan oil if the rebels cooperate. With Libyan oil, they can cooperate with the US in trying to change the face of the Middle East.
The ban will only come into effect if it can be assured that the rebels will supply oil to Europe. That will take a US money grant to Libyan rebels, and the Obama administration has already promised this.
Thursday, August 25, 2011
No More Government Regulations on Natural Gas Pipelines
EIN News says, "Regulators Weigh More Rules for Natural Gas Pipelines U.S. regulators sought public input on Wednesday about the need for increased oversight of the country's natural gas pipelines, as part of a push to strengthen safety after several deadly accidents. (reuters.com)".
Seeking public opinion on the matter of natural gas pipeline accidents is a ridiculous program. In the first place, the public doesn't know anything about pipeline safety. In the second place, US regulators will not be considering public opinion, and should in fact not be considering the matter at all.
Pipeline owners are well aware of their liability for accident. They full well know that they will get their pants sued off on accidents and make every effort to avoid same. They do not need government help, which we can normally interpret as interference.
Seeking public opinion on the matter of natural gas pipeline accidents is a ridiculous program. In the first place, the public doesn't know anything about pipeline safety. In the second place, US regulators will not be considering public opinion, and should in fact not be considering the matter at all.
Pipeline owners are well aware of their liability for accident. They full well know that they will get their pants sued off on accidents and make every effort to avoid same. They do not need government help, which we can normally interpret as interference.
Tuesday, August 23, 2011
We Just Spent $1 Billion in Libya to Supply Europe with Cheaper Gasoline
EIN News says, "Firms Are Eager to Tap Into Libya's Oil Wealth The fighting is not over in Tripoli, but the scramble to secure access to Libya's oil wealth has begun. Before the rebellion broke out in February, Libya exported 1.3 million barrels of oil a day. While that is less than 2 percent of world supplies, only a few other countries can supply equivalent grades of the sweet crude oil that many refineries around the world depend on. The resumption of Libyan production would help drive down oil prices in Europe, and indirectly, gasoline prices on the US East Coast. (boston.com)".
Is this what it's all about? According to an Administration spokesman, we sent money to the rebels and will continue to do so because of "humanitarian" reasons. I suppose the economics of oil can be considered humanitarian, but it's a long stretch. The related aspect is that the US will not see any any advantage in Libyan oil. Ever since the Marshall plan, we have had a program of destroying and then spending more money to rebuild without ever gaining any access to the spoils of war. The spoils of the present Libyan case will be collected by the Europeans, not us, in spite of the fact that EIN News makes a guess that it will indirectly help gasoline prices on the East Coast.
We don't need Libyan oil. We have plenty of it right here. We just can't get to it because Obama won't let us. Fortunately worldwide drilling companies are doing a masterful job and through their activities the price of crude oil has significantly dropped and will continue to do so as more production comes on stream. This is what will reduce the price of gasoline. Gasoline prices have not yet started to fall significantly, because old higher-priced inventories of crude oil still need to be worked off. Logically, refineries and gasoline retailers sell their wares at prices based upon their sunk cost of raw materials, not what they expect raw material costs to be. If they did, they would've been out of business a long time ago and we would be pedaling bicycles.
Is this what it's all about? According to an Administration spokesman, we sent money to the rebels and will continue to do so because of "humanitarian" reasons. I suppose the economics of oil can be considered humanitarian, but it's a long stretch. The related aspect is that the US will not see any any advantage in Libyan oil. Ever since the Marshall plan, we have had a program of destroying and then spending more money to rebuild without ever gaining any access to the spoils of war. The spoils of the present Libyan case will be collected by the Europeans, not us, in spite of the fact that EIN News makes a guess that it will indirectly help gasoline prices on the East Coast.
We don't need Libyan oil. We have plenty of it right here. We just can't get to it because Obama won't let us. Fortunately worldwide drilling companies are doing a masterful job and through their activities the price of crude oil has significantly dropped and will continue to do so as more production comes on stream. This is what will reduce the price of gasoline. Gasoline prices have not yet started to fall significantly, because old higher-priced inventories of crude oil still need to be worked off. Logically, refineries and gasoline retailers sell their wares at prices based upon their sunk cost of raw materials, not what they expect raw material costs to be. If they did, they would've been out of business a long time ago and we would be pedaling bicycles.
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