Prices & supplies - July 21
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There may be oil offshore, but…
Moira Herbst, Business Week
Oil and gas firms covet U.S. offshore reserves, but with oil prices so volatile it's unclear how much would be tapped—or where it would end up Breaking with an 18-year ban imposed by his father, President George W. Bush recently lifted an executive order prohibiting oil exploration in U.S. coastal waters. With that act, Bush said on July 15 at a Rose Garden news conference, "the only thing standing between the American people and these vast oil resources is action from the U.S. Congress." Meanwhile, an organization led by former U.S. House Speaker Newt Gingrich, American Solutions, is promoting a "Drill Here. Drill Now. Pay Less." campaign, collecting more than 1 million signatures to petition Congress to "act immediately to lower gasoline prices" by allowing exploration off America's coasts.
Told in political sound bites, the message is simple: Many people believe the U.S. has walled off a vast gold mine of oil in coastal areas that could be tapped to lower prices. "We have reserves that aren't being explored or developed, and this environment of high energy prices presents a great opportunity," says Charles Davidson, CEO of Houston-based Noble Energy (NBL), an oil and natural gas producer. He says it "would be a great win for the country" if Congress follows Bush's lead and lifts the ban.
The reality, as usual, is far more complicated. Drilling in the now-restricted areas would require years of extensive seismic research before a single rig could operate. Even then, companies would not embark on such massive projects unless the profitability were clear. What's more, the federal Energy Information Administration estimates that access to new U.S. deposits would not significantly affect overall domestic production for 22 years.
(21 July 2008)
Off-Shore drilling pluses and minuses (podcast)
Ira Flatow interviews Robert Kaufman, Science Friday
Ira Flatow interviews Robert Kaufman, Director of the Center for Energy and Environmental Studies, Boston University. Podcast approx 16 mins
(18 July 2008)
Offshore drilling safer, but small spills routine
David Ivanovich and Kristen Hays, Houston Chronicle
WASHINGTON — When a Union Oil Co. well six miles off the California coast blew out in January 1969, an estimated 80,000 barrels of crude spewed into the Santa Barbara Channel — fouling beaches and marring the offshore industry's reputation.
With the nation now debating whether to open more areas offshore to oil and gas drilling, the oil industry can rightly claim it has avoided a repeat of that catastrophe, even as offshore activity has ballooned.
But offshore operators continue to spill thousands of barrels of oil, fuel and chemicals into federal waters each year, government records show.
"This is not a zero-risk proposition," said John Rogers Smith, an associate professor of petroleum engineering at Louisiana State University.
Offshore operators have had 40 spills greater than 1,000 barrels since 1964, including 13 in the last 10 years, according to data from the U.S. Minerals Management Service, which oversees exploration and production in federal waters.
Despite the industry's technological improvements and safety planning, offshore operators have struggled to cope with the hurricanes that blow through the Gulf of Mexico. Seven of the 13 recent larger spills were hurricane related.
But with prices at the pump setting records and raising public support for drilling, President Bush last week renewed his effort to prod lawmakers to agree to open new offshore areas to oil and gas exploration.
(19 July 2008)
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