Bush Lifts Ban on Offshore Oil Drilling, Setting Up Showdown With Congress...
On Capitol Hill, Democrats push back on offshore drilling:
Note Reid’s comment; “For eight years, he’s done nothing,” said Senate majority leader Harry Reid after a caucus luncheon on Tuesday. “We had to pass a law to stop him from pumping more oil into the SPR, which is 98 percent full.”
Obviously Reid is not aware that the stockpile that is 98% full, is only a 58 day supply for this country. On September 12, 2001, President George W. Bush opened that reserve up for us. It is for an energency such as a terrorist attack, a supply disruption, but it is not there to bail out a totally incompetent Congress!
Bush: Congress standing between Americans and offshore oil
A politician crisis
You Can’t Drill There…There’s Oil There!
Below is part of a release from Majority Leader Hoyer (D-MD) in response to President Bush’s announcement to lift the executive ban on offshore drilling:
___________________________________________________________
“Drilling in the OCS will do nothing to lower gas prices, but it will mean one more handout to those who are already enjoying billions of dollars in taxpayer subsidies. Let me remind President Bush: If the oil companies wanted more domestic drilling, they could begin today. They could begin on the 68 million acres of land that are already set aside, leased, and available for drilling. And with upcoming Democratic legislation to speed up the leasing process for 20 million more acres in the Strategic Petroleum Reserve-Alaska, they’ll be able to drill there, too.” ___________________________________________________________
I can think of no better example of pure partisan rhetoric. This statement does nothing more than contradict itself. On one hand you have Majority Leader Hoyer saying that offshore drilling in the OCS will do nothing to lower gas prices, but then he promotes Democrat legislation to speed up the leasing process for drilling in the Strategic Petroleum Reserve-Alaska. If increasing supply doesn’t matter as he implies in his comment about the OCS, then why promote legislation about drilling in Alaska? Could it be that the pressure from America to drill is forcing the Democrats to appear like they care about rising energy costs?
Hoyer is reaffirming the Democrat talking point of being against drilling which appeases their base, but being for drilling on lands where leases already exist to assuage the anger of the average American voter. That might be a good policy if these lands where leases already exist actually contain oil and natural gas. However, we know this is not the case — as do the Democrats who voted to recently defeat the Hoyer-Pelosi so-called “Use it or Lose it” bill. (That’s what his 68 million acre line refers too.) Nearly 1 in 10 Democrats joined Republicans to defeat that bill because it did nothing to actually increase our energy supply.
These are the kind of games that explain why Congress’ approval rating hovers at 9%. This statement proves that the Democrats are willing to talk the right talk but not seek out real solutions. Americans want energy; they don’t want political ploys.
AAPG: ‘Use it or lose it’ bill could be harmful
WASHINGTON, DC, June 23 — Enactment of legislation to compel federal oil and gas lessees to develop their blocks could increase instead of reduce prices, the president of a leading association of energy professionals warned US House leaders.
“US consumers are burdened by high crude oil prices. Conservation and efficiency improvements are necessary responses, but equally important is increasing long-term supply from stable parts of the world, such as our very own federal lands and Outer Continental Shelf,” said American Association of Petroleum Geologists head Willard R. (Will) Green.
“As Congress considers measures to deal with high crude oil prices, I urge caution. Policies that increase exploration costs, decrease the available time to properly evaluate leases, and restrict access to federal lands and the Outer Continental Shelf do not provide the American people with short-term relief from high prices and undermine the goal of increasing stable long-term supplies,” he said in a June 23 letter to House Speaker Nancy Pelosi (D-Calif.), Majority Leader Steny H. Hoyer (D-Md.), and Minority Leader John Boehner (R-Ohio).
The letter is significant because AAPG and its leaders rarely take public positions on political issues. It is an apparent response to H.R. 6251, which House Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) introduced on June 12. Formally called the Responsible Federal Oil and Gas Lease Act of 2008, the legislation has become known as the “Use it or lose it” bill because it would require federal oil and gas leaseholders to promptly develop or relinquish their leases. Republicans are concerned that it could reach the House floor this week without hearings or a markup.
Potential suggested
Pelosi and other congressional Democrats have cited the committee majority staff’s June 4 report, “The Truth About America’s Energy: Big Oil Stockpiles Supplies and Pockets Profits,” which said that “68 million acres of leased but currently inactive federal land and waters could produce an additional 4.8 million bbl of oil and 44.7 bcfd of natural gas.” This would nearly double total US oil production and increase gas production by 75%, cut US oil imports by more than one-third and be more than six times the estimated peak production from the Arctic National Wildlife Refuge, the report said.Republicans on the Natural Resources Committee said the majority staff’s report does not clarify how the numbers were developed or what source was used to conclude that the leases contain commercially producible oil and gas deposits. Minority staff members “requested information about this extrapolation and were told it is based on an ‘internal analysis’ of data from the Bureau of Land Management and the Minerals Management Service. It is unclear what, if any, input either of these agencies had in the extrapolation found in this report,” Ranking Minority Member Don Young (R-Ak.) said in a June 20 letter to Rahall.
H.R. 6251′s assumption is flawed, Green suggested in his letter. “The process of leasing, evaluating, drilling and developing an oil or natural gas field typically takes 5-10 years. Some fields come online sooner. Others are delayed by permitting or regulatory delays or constraints in the availability of data acquisition and drilling equipment and crews. Large projects and those in deep water may require a decade or more to ramp up to full production,” he said.
A lease block’s grid map “makes it tempting to think of exploration as a process of simply drilling a well in each grid block to determine whether it contains oil. But because of the natural variation in regional geology, one cannot assume that oil and natural gas are evenly distributed across a given lease or region. Rather, exploration is about unraveling the geologic history of the rock underneath that grid block, trying to understand where oil or natural gas may have formed and where it migrated. If the geology isn’t right, you won’t find oil or natural gas,” Green explained.
‘Intensive assessment’
Geologists begin an intensive assessment once a lease is awarded, he continued. They collect new geological, geophysical, and geochemical data to better understand the lease area’s geology. If they see no evidence of a suitable trap, the producer will relinquish the lease. But if they see a trap that looks interesting, the lessee will hire a drilling rig to find out if the geologists are right.“Drilling is the true test of the geologists’ model, and it isn’t a decision to be made lightly. Drilling costs for a single well can range from $500,000 for shallow onshore wells to over $25 million for tests in deep water offshore,” Green noted.
Geologists continually collect and evaluate data as the well is being drilled to determine whether it conforms to their expectations based on the geological model. Eventually, they reach the rock layer where they think the trap is located. If there is no oil or gas at that point, the lessee has drilled a dry hole. “At this point, the explorers will evaluate why the hole is dry: Was there never oil and gas here? How was the geological model wrong? Can it be improved based on what they know from the drilled well? Depending on the results of this analysis, they may tweak the exploration idea and drill another well or decide the idea failed and relinquish the lease,” Green said.
If oil or gas is found, the well will be tested to see what volumes flow from it. Sometimes, those are so low that further expenditures are not justified and the well is abandoned. If the results are promising, several additional wells are drilled to better define the trap’s size and shape, the AAPG president said in his letter. “Based on this revised geological model, engineers plan how to develop the new field (e.g., number of production wells to drill, construction of oilfield facilities and pipelines). Using complex economic tools, they must decide whether the revenue from the oil and natural gas sales will exceed the past and continuing expenses to decide whether it is a commercial discovery,” he said.
Access required
“As you can see, oil and natural gas exploration is not simple and it is not easy,” Green told the House leaders. “It requires geological ingenuity, advanced technologies, and the time to do the job right. It also requires access to areas where exploration areas can be tested”the greater the number of areas available for exploration, the higher the chance of finding oil and gas traps.”Democrats did not respond to the letter immediately. Boehner, the House’s minority leader, said in a statement that it shows that Rahall’s bill “is nothing more than a hoax designed to provide political cover to rank-and-file Democrats caught between their constituents who strongly support more American energy production and their liberal Democratic leaders beholden to radical environmentalists who want oil and gas prices to rise even higher.”
“For Democrats advancing the claim that American energy producers, and not they, themselves, are the ones responsible for preventing the millions of barrels of American oil and billions of cubic feet of natural gas from coming to market, today’s letter from a respected organization of international geologists couldn’t have come at a less convenient time,” added Minority Whip Roy Blunt (R-Mo.).
“That’s because the more and more the American people learn about the real causes of our current energy crisis”they’re already aware of the effects”the less and less the majority’s straw man platform on energy makes sense,” Blunt continued. “Later this week, we’ll see the latest iteration of that strategy when Democratic leaders attempt to pass a ‘Use of lose it’ bill that’s already the established law of the land,” he maintained.
Independent producers who would feel the impact of a “Use it or lose it” bill expressed their concern on June 20. “With the regulatory hurdles that are already in place, most companies are in an all-out sprint to develop the energy on a lease within a 10-year period,” said Marc W. Smith, executive of the Independent Petroleum Association of Mountain States in Denver. “If H.R. 6251 were to become law, the resulting burden on domestic energy producers would make it difficult for them to meet our nation’s long-term energy needs.”
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While it is symbolic, Bush’s lifting of the ban does make the Pelosi-Reid Congress stand alone as the remaining Govt obstructionist. Meanwhile the Democrites won’t do anything because they apparently hate America and want to destroy it from within. They apparently want to bankrupt America, destroy our economy and our standard of living, then empower and enrich our enemies so they can win even though they lose on the battlefield.
The Democraps, Al Qaeda and the Jihadist’s best friend and ally.
And remember: a vote for Obama is a vote against America.
I could be wrong here, but I don’s suspect Robert will be attending the Obama party in NYC next week…
What role do the states play in allowing the drilling to happen and under what circumstances? We are in for an interesting ride, Fans!
NY-David
Reading further into the subject, drilling off shore will only be allowed if the governor of the state will allow it. In California, the governor is very much opposed to it -http://blogs.abcnews.com/politicalradar/2008/06/schwarzenegger.html
Also, this is an open-ended question, but why aren’t the oil companies drilling on the land that’s been leased to them? I would think that it would be cheaper then building oil platforms.
NYD
David. In answer to your question I’m given to understand that although they may have say 70 leases, only 5 may actually be feasible to drill in. Add the fact that you have to go through a process of exploration and testing which is costly it’s just easier said than done.
I may be mistaken, but i thought we had platforms out there in some areas.
I will try to find a link to support Bon Bon’s assertion. I did post on that about a month ago and it talked about what Bon Bon said. The speaker I listened to was going into detail about the land speculation. They can determine the area of oil with very little problem, but that is where things start getting complicated. Once they determine where the oil is, they need to decide where to drill and more often than not, it’s a bust. There is a great deal of cost and time involved in finding the right spot to drill.
Let me find some links.
Tomorrow night on Tru is Black Gold. NYDavid can learn something by watching, like not all oil lease land has exploitable oil underneath it. Otherwise, NY David, why isn’t there Oil wells in NY???
PCD – I understand your point, but why would any business pay for something they aren’t using. BTW, what is TRU?
Thanks All,
NY-David
That for the heads up on the show PCD!
David, TRU is a station on the cable lineup, if I am not mistaken, it used to be Court TV.
7- see some of my new links. The oil companies pay the Federal government for the land leases and it can go on their balance sheets as property/assests. It makes sense. If you are my competitor, it would make sense for us to compete for the oil leases. It in no way means that the land will produce gushers at every turn which is how Reid/Pelosi have been trying to sell the tale! At the end of the day, there is still a mountain of regulation that may prohibit either of us from ever drilling on those leased land acres!
Feckless To Reckless, Pelosi Should Resign
Leadership: With oil hitting $147, Nancy Pelosi finally admits energy is a problem. But instead of drilling for it, she’s cooked up a new drain-the-reserves scheme. It’s pure politics at a time of crisis. She ought to resign.
Any leader with an energy record as derelict as Speaker Pelosi’s ought to step down. Where she once was just incompetent and irresponsible, she has now ” with her latest scheme to fix oil prices ” become dangerous.
Despite polls showing Americans in favor of drilling more oil from America’s huge untapped supplies, Pelosi won’t allow it. She just wants to empty our Strategic Petroleum Reserve for a short-term fix to get through Election Day.
It’s an irresponsible suggestion, signaling not only an ignorance of how the economy works but also a willingness to place the nation at risk in the case of emergency.
Last Tuesday, Pelosi sent a letter to President Bush urging him to release a “small portion” of the nation’s 706 million barrels of strategic-reserve oil to bring down prices. Regardless of how one feels about whether reserves should be held at all, two big problems stand out with Pelosi’s tiny demand.
One, she’s proposing a misappropriation of the reserves. The U.S. oil stockpile is a 58-day cushion for emergencies that today are all possible. If Israel attacks Iran, for example, and prices double again. Or if Hugo Chavez cuts off his supplies, as he threatened to do as recently as Sunday.
The reserve is there to cushion the blow of a market disruption; it’s not an open-market mechanism to manipulate prices for political ends.
Two, Pelosi has finally admitted that supply matters, something that contrasts with her entire legislative record. We count 14 energy actions to suppress supply on her Web site just since 2005.
She has blocked efforts to open Alaska to drilling, denounced fossil fuels, blamed oil companies for high gasoline prices, voted for biotech boondoggles and condemned speculators.
“Our coasts need lasting protection from oil and gas drilling,” she declared Dec. 6, 2006, after Democrats won control of Congress. Missing are any moves against petrotyrant regimes who drive prices skyward, or even lip service to the idea of ensuring supply through drilling.
Pelosi downplays her proposal as modest because it’s a “small” portion of the reserves to spend. And look what happened in 2000, she says, when an SPR release authorized by President Clinton lowered gasoline prices nearly 20%.
But she’s not fooling anyone. Then, like now, an election was coming up.
With Congress’ public approval at a subterranean 9% and falling, the speaker must be starting to realize that November may not be the Democratic cakewalk that pundits predict.
President Bush, however, isn’t about to be suckered into releasing the reserves just long enough for pump prices to fall by Election Day, thereby saving Democrats’ skins so they can carry on their drill-nothingism for an additional two years.
The president needs to do two things with Pelosi’s proposal: First, tell her “no,” unless she comes up with a plan to open up more drilling. Second, expose it for what it is ” a bid to paint Bush as the problem to distract from her own sorry record.
In playing politics with the Strategic Petroleum Reserve, the speaker has moved beyond the incompetence and irresponsibility that have characterized her leadership to date.
It borders on reckless, something we cannot tolerate in such dangerous times.
This is the very reason why republicans should be jumping all over this and readying themselves for the 2008 election. Helping americans pay less at the pumps will go a long, long way.
With due regard to the above two points, it can’t be about paying less at the pump then it will be about a national energy policy. One may not get you the other.
It does represent an opportunity for the Republicans to show some leadership (did I just say that??).
NY-David
I also think Congress will through it back to the states and the respective governors will push back, like California’s governor is already doing. I understand that he’s done it before on environmentally sensitive issues previously.
NY-David
The Republicans are being idiots again. They must like being the minority party because most of them aren’t even paying lip service to the principles that got them elected in the first place. Fiscal responsibility and low tax rates. If they lower tax rates, revenues will go up. They walways do. If they cut out the earmarks, and spend our money responsibly, the budget will be balanced and the deficit will fall. With more money in consumers’ pockets, the economy will expand and produce even MORE tax dollars for the treasury. How stupid are the Democrats? How stupid do you have to be to believe that a $300 check will stimulate the economy, but that a $2500 reduction in taxes won’t? $2500 is the amount that a family of four earning $40,000 a year will see their taxes increase if the Bush tax cuts expire in two years. Hmmmm, $300 once a year or the equivalent of $212 every month. I think I’d take the $212 every month.
NYDavid,
TRU was known as Court TV. It is a cable/satellite channel. It ought to be safe for you to watch. A lib owns and runs the channel.
Oh, David, riddle me this? Why are Pelosi and the Democrats calling for the Strategic Reserve to be tapped? Wouldn’t that put more oil supply on the market? If there’s more oil on the market, wouldn’t the price drop?
If putting more oil on the market is what would be good for Democrats, why not drill for it domestically?
Another Riddle for you. Why is Chucky Schumer so mad that Saudi Arabia is not pumping 1/5 million barrels more? If he hadn’t blocked ANWR, we’d have 1 million barrels more of domestic oil. That’s right, David. Twice as much as what Chucky is whining about.
Are you beginning to see what a disservice to the country your Democrat party has been?
If I see or hear one more babbling idiot on TV or radio parrot the brainless talking point “…increasing supply won’t lower the price” one more time I think I might go ballistic.
OF COURSE increasing supply is not a long-term solution anyone with an IQ above room temperature knows that. BUT it is a supply-and demand situation and increasing supply out of our own resources will not only solve a lot of other problems, it will provide a short term price benefit. More supply equals demand-supply balance. Duh…
Now if the average American can figure this out, why can’t our so-called leadership in Congress?
My over all issue here is similar that what happened after Katrina hit. Many refineries off line and gas went up to $4/gal. The country got all in a buzz, the call for an electric car came out. Some guy that figured out how to run his car on frenchfry oil got his 15 min of fame. Gas went down again and all that stuff got pushed under the rug…again. Tapping into the strategic reserves could help. Bush ordered them to stop accumulating a month before Pelosi made her letter to Bush. Drilling in Anwar could help if done correctly. I don’t think anyone wants to spend the political capital to get the offshores opened up because the states hold the final card and they don’t want to see it happen. There is no upside to the risk they are taking unless they get huge royalties from the oil companies and I don’t think that’s going to happen.
I dont’ care who is in charge. For everyone screw up of the Democrats (and there are many) I could find Republicans of equal intestinal fortitude.
Chuck Shumer is basically right that we would have had a case to delay arms shipments if they don’t puump more oil. His only stupid statement (ok there were several) was when he said “Out economy is headed south”. He should have said our economy is headed East.
I wouild love for the government to find a way to increase domestic drilling. They I’d like to see the government impose a %25 tax on imported oil. After that, let the markets work it out.
NY-David
David, if we don’t sell arms someone else will. We have little or no leverage. And Schumer is another babbling idiot. After what his stupid mouth did to that bank he should have been expelled from Congress.
Sorry, can’t agree with you there. US arms are some of the best in the world and I’m tired of a dictatorship country get poised as “friends”. Add Pakistan to that lot as well.
I read Shumers letter and I’ve yet to see anyone jump on it except for right-opined bloggers. You can’t have it both ways. If he was responsible for the oversight of the organization and didn’t voice his concerns then I’d be dinging him for not doing his job. Kind of like the lookout on the Titanic being responsible for its demise.
NY-David
Surely you jest! Cuomo stopped short of naming him just yesterday. God forbid he actually named him by name and party affiliation!
Here’s how the Wall Street Journal describes his culpability