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INCONVENIENT TRUTHS ABOUT OIL
Townhall.com ^ | 05/23/08 | Tom Glennon

Posted on 05/23/2008 8:39:48 PM PDT by oldscouter

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To: oldscouter
While the article addresses crude oil production problems, it fails to address the refining problem. How long has it been since the government allowed a new refinery to be built, or existing refineries to upgrade to more efficient methods, or how many different 'anti-pollution' blends are they required to produce radically eliminating any efficiency at producing refined product at all?

Even at current crude prices, how low would a gallon of gas be if refining capacity was free market driven?

21 posted on 05/24/2008 12:49:07 AM PDT by Ophiucus
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To: oldscouter
I did not know about the Chinese-Cuban oil development off Florida. Maybe China will put one million troops in Cuba to defend their rights to drill for oil.

Why not? After no American Congress these days will stop them from a Chinese military buildup in Cuba...

22 posted on 05/24/2008 2:17:26 AM PDT by topher (Let us return to old-fashioned morality - morality that has stood the test of time...)
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To: dr_lew
These programs represented profilgate EXPENDITURES of energy and resources for the achievement of focused goals.

Amen, brother, you are exactly correct. Both occurred in a crisis period where the nation felt imperiled by a major adversary, a condition not true for today. Now if we could just get that 'cold fusion' thingy to work!

23 posted on 05/24/2008 3:07:26 AM PDT by SES1066 (Cycling to conserve, Conservative to save, Saving to Retire, will Retire to Cycle.)
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To: dr_lew

“I’ve said it before and I’ll say it again, the invocation of the Manhattan Project and the Apollo Program as prototypes for some kind of miraculous effort at extracation from this predicament are unfounded.”

Amen


24 posted on 05/24/2008 3:33:58 AM PDT by Figment ("A communist is someone who reads Marx.An anti-communist is someone who understands Marx" R Reagan)
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To: neodad

Carter was the best lesson that this country has ever had in regards to Government interference.

His “Windfall Profits Tax” caused the base price, which at the time did not fluctuate more that a few pennies per year, to double the price in a few short months.

Then, came the shortages. The oil companies stood to lose money if they increased production, so they kept it the same and those legendary gas lines and rationing was the result.

Exploration began in earnest, and at the time, steel was still plentiful and cheap, so a whole new breed of Drilling Rig went into full production by the thousands. By the end of the ‘70’s there were 4800 rigs drilling on contract leases. But that is how it goes. There is always at least a 5 year period before any drilling increase or effort will have even a minimal influence on the supply or the price.

By the time the price came down again, the surge in drilling created a World glut of oil, which caused the market price per barrel to crash. However, the price at the pump only dropped a few cents, thanks to all the new taxes that the Fed. and State governments added during the boom. This caused most smaller drilling contractors to go out of business and rig counts dropped to under 1000.

Our current situation is very grim, since costs have gone up ten fold and there are only 1758 rigs available to meet the heavy demand for leases waiting to be opened. To build a new rig today, it will now cost 20 million to build one medium sized rig (Capable of drilling to 15,000’) that cost 5oo thousand to build in ‘75. There will be no rapid expansion in drilling that would be necessary to relieve the Domestic market of the current situation.

Sad but true.


25 posted on 05/24/2008 3:39:53 AM PDT by PSYCHO-FREEP (Juan McCain....The lesser of Three Liberals.")
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To: Ophiucus

All of our existing refineries have made major upgrades and taken steps to increase output. This is why there was a sudden “unexplained” spike in prices last summer. We were at about 75% of our production capability because several major refineries shut down for repairs and modification. Two were retooled to meet Federal mandates for blended fuels.

The biggest reason there have been no new refineries built, is the extreme cost to build them in this day and age. The Oil companies operate at such a small profit margin, (8-10%) there simply is not enough money for them to do it and also meet their exploration goals. (Both of which are paid for by profits.)


26 posted on 05/24/2008 3:48:47 AM PDT by PSYCHO-FREEP (Juan McCain....The lesser of Three Liberals.")
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To: oldscouter

The one good thing about escalating gas prices is the whole country is mad as hell and is going to hold the democrats and some republicans directly responsible when they oppose drilling for our own oil.

Now is the perfect time for some brave Republican(s)(if we still have any) to bring bills to the floor advocating new domestic drilling.

If, by some miracle, legislation is passed allowing domestic drilling again it should be initiated with the same fervor as we see in preparation for war. It is often said it would take ten years or more from the date of new drilling until it reaches the market but why do we have to assume this to be true?

Massive deployments of technicians, welders and materials and daily flights of cargo planes flying into drilling sites just as we seen in the build up to the Gulf Wars, Afghanistan and Iraq. Off shore drilling could be initiated with the same emergency with large numbers of ships carrying personnel, equipment and supplies and working around the clock.

The immediate response from the oil producing nations would be the realization America has finally struck a huge blow for independence against their tyrannical rule over our country and even when they start dropping prices, we just keep on drilling for our independence.

This may be a ‘pie in the sky’ vision but no one can tell me this country isn’t capable of doing the seemly impossible, we have done it before.


27 posted on 05/24/2008 4:33:53 AM PDT by RetSignman (DEMSM: "If you tell a big enough lie, frequently enough, it becomes the truth")
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To: RetSignman

I hate to pop your bubble, but we already are drilling at the maximum rate. We are very much behind schedule in regards to the available leases waiting to be opened. Most leases are private. The Government has only a few and allows drilling on them. You have been grossly misinformed as far as your belief that there is no domestic drilling.

As far as your visualization of “deployment”. You have been watching too many movies. That is simply unrealistic of how this industry functions. There are no airfields nor can there be around most drilling sites. We truck them in, and are well equipped to do so.

All the existing rigs are now working and a few new ones are being built, but the biggest problem is, a severe lack of trained people capable of operating them and the extreme cost of building a new one.

More importantly, you just don’t send somebody to a school for 3 months or even a year to be able to operate one. It takes years, decades to gain the necessary knowledge.

That’s the problem. There was too long a time in between the last boom that caused an entire generation to be lost. Those of us left are far and few between and are currently more busy than we care to be.


28 posted on 05/24/2008 4:52:50 AM PDT by PSYCHO-FREEP (Juan McCain....The lesser of Three Liberals.")
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To: neodad
The big difference between now and the ‘70s is that there is no shortage of oil or gasoline. Yes, prices are historically hight, but there’s no rationing, or gas shortages, or odd/even days to get gas. Keep the government out, and the free market will work

I lived through those days and there was no shortage then.

we had gas lines and odd/even days but those were imposed by governments and opec's decision to control the flow and price of crude.

29 posted on 05/24/2008 5:14:14 AM PDT by USS Alaska (Nuke the terrorist savages - In Honor of Standing Wolf)
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To: theymakemesick
It took decades to make deep water extraction practical, it’ll take decades to make shale practical.

There are lots of people around here who think that we could be energy independent tomorrow by switching to oil shale if only congress or some other imagined oppositional force were not in the way.

30 posted on 05/24/2008 8:13:50 AM PDT by wideminded
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To: Intolerant in NJ
had we started thirty years ago, ..., we'd be in much better shape now - the crisis mentality of the 'rats, who fail to take any long-term action, is criminal.....

"I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977 -- never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade ...

To give us energy security, I am asking for the most massive peacetime commitment of funds and resources in our nation's history to develop America's own alternative sources of fuel -- from coal, from oil shale, from plant products for gasohol, from unconventional gas, from the sun.

...

You know we can do it. We have the natural resources. We have more oil in our shale alone than several Saudi Arabias. We have more coal than any nation on Earth. We have the world's highest level of technology. We have the most skilled work force, with innovative genius, and I firmly believe that we have the national will to win this war. ..."

- Jimmy Carter, July 15th, 1979

31 posted on 05/24/2008 8:44:26 AM PDT by wideminded
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To: wideminded

BUMP!


32 posted on 05/25/2008 12:52:29 PM PDT by Publius6961 (You're Government, it's not your money, and you never have to show a profit.)
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Excellent read!


33 posted on 05/25/2008 4:42:37 PM PDT by kellynla (Freedom of speech makes it easier to spot the idiots! Semper Fi!)
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To: PSYCHO-FREEP
OK. Question - how much would the expense be reduced without EPA litigation and Federal requirements for blended fuels?
34 posted on 05/26/2008 10:17:21 PM PDT by Ophiucus
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