Oh, man. T. Boone Pickens weighs in, and suddenly I understand.

[Robb]

http://www.nytimes.com/2010/04/01/business/energy-environment/01drill.html?src=mv">Risk Is Clear in Drilling; Payoff Isn’t

(snip)

Oil company executives and geologists expressed guarded enthusiasm for the president’s initiative. But experts said it was impossible to know how much oil and gas the new tracts contain, in part because some existing data is based on 30-year-old studies.

(snip)

But T. Boone Pickens, the billionaire Texas oilman, who has been a practicing geologist for 50 years, said, “I’ve seen some optimistic reserve estimates for offshore United States and I am not sure they will hold up.”

In the last 15 years, the industry has made swift strides in new methods to acquire and analyze seismic data in waters that were impossible to reach when geologists last studied the areas. Current seismic and drilling information cover only a tiny fraction of the area that would be opened for drilling, especially along the Atlantic coast. “We don’t have a good understanding of what the true potential is,” said Bobby Ryan, Chevron’s vice president for global exploration.

He added, “Until you really get in there with modern technology and evaluate it, you don’t really know.”

...Get it yet? :D

[xchrom]

1. Don't the oil companies get tax write offs for taking 'risks? Nt

[Robb]

3. They can't write off more than their investment.

The labor and other costs of drilling a "dry hole" can be written off, but only as much as was spent.

[Captain Hilts]

7. Yes. We give them tax incentives for what they'd do anyway. nt

[joeybee12]

2. I got it a while back...but thanks for the reminder.

;)

[mdmc]

4. easy answers

drill baby drill..

[Robb]

6. Silly.

[asdjrocky]

5. Get what?

That now T. Boone and Obama agree with each other?

Somehow, that does not make me feel better.

[Robb]

9. Read it again.

T Boone is saying he supports the idea, but he's not putting his money there.

Say what you like, but Pickens knows oil. This will amount to nothing.

[asdjrocky]

15. You get the twisted logic award for the whole year on that one.

No matter what I do, I can't see it the way you do man.

[joeybee12]

18. This is exactly what Ken Salazar said yesterday...Pickens is on the

same page with Obama...oil compaies write off exploration...this is going forward. It's not some simple ploy to outwit the repukes.

[arcane1]

8. Dammit, I dont get it

:evilfrown:

[sabrina 1]

30. You and a lot of other people.

But, you have to understand that when a Democrat proposes off shore drilling, there are no longer any oil drillers around. We are calling someone's bluff.

Just a few years ago however, when a Republican president tried to do it, the world was filled with evil oil drillers all waiting in line to destroy our shorelines.

Sigh, we have to get with the program. The problem is I can't keep up with the spin fast enough to get on board. I have questions that the spinners won't answer. Like where did all the scary oil-drillers go?

[Robb]

32. That you keep repeating something over and over does not make it true.

It only makes it repeated. :)

[sabrina 1]

34. That you can't tell us what happened to all the oil drillers

makes it obvious that you have no explanation for this spin. And as always, when people refuse to answer a question, the actually do answer it.

[Robb]

39. There have been several answers in this thread more eloquently put than mine

...and you're ignoring them, too. Perhaps you have them all on ignore? :shrug:

Tell you what, put enough people on ignore and you really DO have an echo chamber. You can have the same effect, less elegantly, by simply ignoring people's answers manually, as it were.

[sabrina 1]

40. Once again you attempt to distract from the very simple

question I asked. 'What happened to all the oil drillers since yesterday, were the democrats lying all along about the threat of off shore drilling'?

As for putting anyone on ignore, never did that. I am not afraid to engage people who disagree with me, in fact I enjoy it as sometimes they learn something and sometimes I do. And I have infinite patience for those with opposing views. Not to mention the fact that, unlike many of those I disagree with, I rarely say something I cannot back up with credible sources.

Here is a prime example of why I don't put people on ignore. There is a question that many people, not just me, are asking. You have made a claim. The question challenges that claim. That is why you still refuse to answer it. I didn't ask 'other people' the question, I asked YOU. And still, no answer ... because no matter which way that question is answered, someone in the Democratic Party looks bad. As they should.

[Robb]

42. And I've answered. As have others.

The oil drillers were never really there, the way you seem to think they are. The Democrats weren't lying, because actual offshore drilling would be devastating.

I'm frankly quite amused about your claim to search for truth, not having to "be right." All you're doing is arguing without listening.

Re-read the thread and try again.

[sabrina 1]

45. Well, of course it's not my claim.

It's been the claim of environmentalists and the democratic party for years. People I trusted since I don't trust Republicans. I have read Javaman's post, he is far better at answering questions than you are, btw, which could be because he is focusing on the issue, not trying to defend a party. I will certainly consider and research his points ~

I will continue to search for the truth. You might want to do that also. A single politician no matter how charming, and I've met many of them personally, is not worth throwing away long held principles for.

I am not amused at all by issues as serious as this and others that this administration has flip flopped on. They will last a few years, but the consequences of their actions will last for a very long time. Sorry, I never was one to jump on band-wagons.

[Robb]

46. Oh, stuff it. You're doing no such thing.

You hate Obama and you're trying to play nice. Just admit it and move on, instead of accusing anyone who disagrees with you of "defending the party" or some such nonsense. :D

[sabrina 1]

47. You're losing your cool.

It's not the end of the world when someone doesn't see things your way. It just means either that your method of communication is not successful, you don't have facts to back up your assertions, or you might just be wrong. Right now at least the first two appear to apply, as evidenced by the post I am responding to. :hi:

[Robb]

48. LOL

Now you're the peacemaker, eh? Things didn't work out with "antagonist"? :D

[Statistical]

62. Wait what? The oil drillers were never there. So what are these?

http://finance.yahoo.com/q?d=s&s=APAGF+ATW+BHI+BRNC+CRED+DO+ESV+GLBL+GLF+HAL+HK+HNR+HP+ISRL+NBR+NE+NGAS+PDE+PDS+PETD+PLLL+PTEN+RDC+RIG+SII+SLB+TDW+TESO+WFT

Two of the largest being Diamond Offshore and Haliburton.

[alfredo]

60. Jobs. It's not just those who are doing the exploring,

it is the support companies that supply the oil company efforts.

Oil companies may not make any money, but the company that supplies and supports oil fields will. So we are subsidizing jobs in the oil field supply and support industry.

[zipplewrath]

10. Sorta

Basically, the implication is that Obama saw this as an easy "give away". Open up some areas that may never pan out, and won't even start for years, and get the GOP off their stride.

My problem is 3 fold. 1) It seems a bit early to give something away that he could make the right "fight" for. 2) Many of these areas aren't popular locally so he's probably developing more enemies than friends over something that probably won't happen. 3) He's basically developing a strategy of "drill when you're in trouble" that will be repeated in the future until they DO find the oil, even if it is now only 25 miles off shore.

[Kalyke]

11. OK... let me in on it.

The only think I can think of, directly from the posted passage, is:

A. Pickens is downplaying the reports because his money's in natural gas.
B. They want the seismic data to measure future cataclysmic events and their using oil exploration as a plausible front story; and,
C. The oil companies get a tax break for R&D.

[democrat_patriot]

12. Yep. We just bought some Republican votes.

We pretend we're going to drill. An act that will take years to actually happen.

In the meantime Obama can push Wind, solar and 'clean coal.' Or whatever. Saying "while we wait for the oil...."

When it turns out there isn't much oil - it quietly goes away.

They've also taken away a campaign talking point for the Republican Party.

[Robb]

13. Gas, too. That's the brilliance.

30 year-old reports say there's oil and gas out there. Probably. Maybe. Well, turns out we don't really know. And nobody's lining up to spend the money to find out. :D

[TheKentuckian]

75. There is hundreds of years of NG in much safer areas to extract

Big carbon simply demands carte blanc. They'll deal with it when it will be profitable.

In my opinion energy should be straight nationalized from your local electric to fuel production because market forces aren't even really applicable in any beneficial sense. It all go juice and the competition is an illusion.

[4lbs]

14. For those that still don't get it:

1.) For years, decades even, the oil companies, and their Conservative politicians who support them, have been hitting the airwaves and campaign trails talking about how "offshore oil drilling" would open the floodgates to more U.S. oil. It was those darn Democrats who were preventing them from helping the country lose it's dependence on foreign oil.

2.) A Democratic President (Obama) has told them, OK, enough whining and complaining. Go ahead and drill in those areas that you've had leases and permits for years, but aren't doing anything in right now.

3.) The oil companies, taken aback by this move, are stammering and essentially saying that before they spend hundreds of millions of dollars on offshore rigs, they need to be sure that there is enough oil down there to make it worthwhile.

4.) The oil companies are now saying that their information and data, now 30 years old, and what they used all along to expouse the benefits of offshore drilling, is quite possibly inaccurate, and they need to go in and get new data. This will take many years.

President Obama called their offshore oil drilling bluff, and instead of them saying "Hooray! We'll have a dozen offshore rigs installed by next year!" are now saying "well, we gotta spend some time and a small amount of money to figure out where the oil really is and how much of it there is, to see if it's worthwhile to make the investment, before we spend hundreds of millions installing offshore rigs and pumping".

The oil companies won't be installing ANY offshore oil rigs unless they can be very certain that it will produce enough oil to be profitable.

In the meantime, the Repuke and oil company campaign theme of blaming the Democrats for not allowing offshore oil drilling, and using that to win elections, has been taken off the table.

[virgdem]

17. Exactamundo...

This is nothing more than a giant head fake by Obama. This cocamamie plan will take years to come to pass and the oil companies are not willing to expend time, money and manpower to drill in areas that may not be productive.

[sabrina 1]

19. At what cost?

To take a political issue off the table, as Clinton now admits himself, we are to make a 'deal with the devil'?

Do you really believe that potentially destroying the U.S. coastline, as Obama himself said in the campaign, is worth risking just to win a political argument?

How about we stop this game of chicken we're being told Obama is playing with these important issues. Democrats won a majority with this issue still on the table, because enough people understand the harm it could do.

Not to mention the fact that foreign investors won't have the same concerns about our coastline, not that we don't deserve it considering what we have done to other oil-producing countries' environments.

Singling out one reaction is disingenuous. There will always be people who will take the risks. Look at the risks being taken by this government in Afghanistan because of the belief that there are huge oil reserves in the Caspian Sea. And if you think that is not why we, and the Russians before us are there, you are very gullible.

See Clinton on his latest apology for one of his policies towards Haiti, a policy that was opposed by the 'left' also at the time. Now, far too late he apologizes, and admits that he 'made a deal with the devil'. A lot of good that does the poor people of Haiti.

It's astounding how easily people give up their principles when their team are the ones pushing it.

We need to grow up. Do we really care so much about beating Republicans in a war of words that we are willing to destroy our coastline?

[Robb]

20. Zero cost. And there are no principles to give up, either.

There's a lot of talking, and no money moving. That's the reality. Obama might've just as well passed a law allowing logging in Canyonlands.

Result: the East Coast's coastline will be unaffected.

[sabrina 1]

22. Why does that argument sound so familiar to me?

Oh, yes, 'the repeal of Glass Steagal won't destroy this economy, it will provide new jobs and open up markets we don't have right now'.

'Don't worry about the telecommunications act limiting access to news. Big Corps would never do that, it wouldn't work for one thing'.

'Nafta? Great, no one will take advantage of cheap labor which would cost American jobs. This will open up trade which can only be good for the U.S.

And now, 'don't worry about anyone drilling off our shores just because we told them they could. There's nothing there, and look what we're going to get in return'

You believe the rhetoric all you want, I'll take a lesson from the past, and listen to the experts on our enviroment who have nothing to gain but the protection of our shores.

[Robb]

23. No one said any of those things, first of all.

You want to take a lesson from the past? OK, then answer me one question no one's gotten to yet:

Anyone with half a brain would know this drilling plan would create a lot of pissed-off people, right?

If it's "as advertised," why wasn't it announced on a Friday? That's where you put unpopular stuff if you want to scoot it through. News dump on Friday. Old as dirt, and it works.

You don't announce it at noon on a Wednesday. Why, do you suppose, Obama's team did that?

You think they just misfired on that one? :D

[sabrina 1]

27. The only people likely to be pissed off about this are the people

this adminstration doesn't care about. Progressives, real Democrats.

[Name removed]

28. Deleted message

Message removed by moderator. Click here to review the message board rules.

[sabrina 1]

29. You didn't answer my question, but then loyal partisans

rarely ever do when the cannot spin the answers.

But I'll try again.

What happened to all those scary oil drillers we, Democrats along with the party, felt compelled to stop by opposing Republican President George Bush's policies off opening up off-shore drilling?

To remind you of your spin. Now that President Obama is doing it, there is nothing to fear because there is no one who would be willing to drill.

So, what happened to them? Did they vanish? Or was George Bush right after all? We never did have anything to fear ~

Not that I expect an answer since you're all full of optimism and insults today, and this one is a real downer because Oil drillers don't vanish when Democrat appears on the scene. Either they never existed and our Party was just doing what they were accused of, scaring people, OR, they ARE still there and the Democrats were being honest about it, back then anyhow.

Edited to add ~ was Obama lying in the campaign when he said that off drilling would have dire consequences to our coastline? It's hard to have it both ways, either he is a liar and a political opportunist, or the entire platform of the Democratic Party has been a lie and he fell for it and has now woken up.

Like I said, I expect no answer to these questions, not until it has been decided how best to deal with people who actually can think for themselves.

[Robb]

31. Is "loyal partisans" the new "cheerleader"?

...and I'm the one full of insults. :D

You ignore everything I've said and focus on your little world. It's going to piss you off when I'm right. Of course, you'll never admit it... "They still might drill!!1!1"

[sabrina 1]

35. So the Democratic Party was lying for decades?

Off Shore Drilling never was a problem? Because if you're right, Obama was lying in the campaign and Democrats have been lying for decades.

Okay, I'll accept that for the sake of argument (leaving aside the environmentalists who must also have been lying to make your scenario correct). When you are lied to on this scale by a political party for so long, and then they tell you the truth, which is according to you, there are no oil drillers, how can we believe a party that lied so blatantly, according to you?

So, again, were they lying all along, including Obama? There never were any oil drillers? Why can you not answer this question directly? Did they vanish since yesterday?

Oh yes, FYI, you seem to care a lot about 'being right'. I'm not interested in either you or me, being 'right' or 'winning'. I'm interested in the truth, in knowing facts that don't keep changing, for the benefit of the country. If there are no oil drillers and there never were, then that's good news. But, if a party has lied to me about it for years, I want to know why.

[Javaman]

38. I'll weigh in, then run away...

the issue isn't the fact that they have been lying for decades, I believe that due to the echo chamber on the right, up to this point, there hasn't been an effective Dem to question what has been going on.

I think Obama had someone actually look at the exploration reports from 30 years ago. It's mind numbing data that, unless you know what you are looking at, would bore you to death.

He also asked the right questions. Such as, what would the EROEI be? How deep is that oil? does the tech exist for such drilling? And has any oil in fact been actually found on any of these leases?

Sound like pretty simple questions, but if you don't have the tools or the insight to ask them, you will take peoples word for it.

It was probably also found out that the last time any oil corp did any serious exploration in that area was probably back in the early 80's during the embargo. The tech as greatly improved since then. Most if not all of that data is probably of marginal use by now. So by calling the right and the oil corps bluff, the oil corps have to pay big money to do new exploration. Not a very cheap thing and takes a good chunk of time to get results.

Plus, when oil was at 150 bucks a barrel, it was probably an attractive concept. Extracting any oil, even the crap stuff, at that price would be worth it, regardless if it was a few thousand barrels.

Now? Not so much.

Just because someone owns a lease for a area of land, under water or not, does not mean there is oil there. It just means you have a lease to explore and if you find any, it's yours to sell.

They could poke holes in the ground for the rest of eternity and not find a drop.

Corps own oil leases in the most absurd places. They are hedge bets, nothing more. One doesn't get oil until you drill and actually find it. Many a time, the science says one thing and reality shows them another.

I'm not expecting any drilling in those areas any time soon. They first have to see if they are even worth while and that will take at least 10 years.

I'll run away now.

[sabrina 1]

43. No need to run away

:-) I appreciate your thoughtful response. I have no problem with people who can argue from a realistic pov, rather than just knee-jerk, blind support for one party or the other.

Your post makes sense for the most part. And if you are correct, it was the right position to take to oppose off shore drilling since no one knew for sure how it would turn out.

Otoh, I will have to read more before taking for granted that lifting the ban now is a wise thing to do. As you say, we really don't know and maybe the position of the Dem Party is the wisest one to maintain until we do ~ 'when in doubt, leave out'.

Thank you though for providing the information. I will definitely keep it in mind as I try to find out more.

I really would like to think you are correct btw ~ beating Republicans at their own game is like winning the lottery imo. But I am not willing to support giving away our environment for what I admit, is a self-indulgent cheap thrill.

I do wish that if you are correct, Democrats would spend more time educating people with information they may have, and it is a supposition still that they do have it, before they come out with these announcements. At least share it with their own Party members. Several Dem. Senators are not happy with this decision. But if there is more information they did not have, wouldn't it have been better to provide them with it ?

[Javaman]

49. Part of the game in washington...

is keeping us all ignorant.

If they gave up their cards too quickly, Obama wouldn't have the edge.

The landscape is vastly different now than say 10 years go. Made so by 8 years of a creepy secret government, that at times road very close to fascistic concepts.

As much as it appear as if the dems are in control, the corps really control everything. The "news" we have to day is also corporate owned and the reporting news has been transplanted by sensationalism.

I don't know how old you are but when I was a kid, the news was read to us by one "anchor" who sat at a chair and reported the news. It was incredibly controversial for Walter Cronkite to make his personal opinion known regarding the Viet Nam war. Today, it's all personal opinion, no more reporting. So as a result what we are treated to instead is just a grand game of "telephone", but a version that is so finally crafted to usurp common sense and promote reactionary actions that the American public trying to get to the real story from TV are never ever really informed. That's why the net is really important. The last bastion of raw stories.

So as a result, informing the public of the facts of a particular topic becomes subject to the echo machine of stupidity and opinion based on nothing but emotion.

In the end, it's about money. When you understand that, the rest becomes easy. Figure out who makes what on any particular piece of trash news and you will get your answer.

That's what makes this announcement by Obama about the drilling so artful. He knows there is probably not enough oil out there for the oil corps to break even, so rather than throwing up his hands (dramatically), he does it in a calculated call of their bluff.

"you want to drill, knock yourselves out", followed by the thought, "this will be fun to watch them now explain their stupidity".

but look at it this way, if Obama came out and said, "we looked at the data and found that there just isn't oil there", do you think the right wing would believe him? the tea party buffoons would have a field day with that. "he's lying!!! just like his birth certificate" See what I mean?

As far as the Senators not being provided with the info, I'm sure they have it now, because they are suddenly quiet. :)

Anyway, that's my two cents.
Cheers!

[sabrina 1]

50. If you are correct, then it is a brilliant strategy.

But what if they do discover that there is enough oil to make it worth their while to invest in drilling? Unless we are sure, isn't it a risky strategy? So far, from what I have read, the consensus seems to be that there is not enough to justify the expense. But, as I pointed out in another post, not being certain that the Caspian Sea holds the world's last major oil reserves didn't stop the Russians, and now the U.S. from investing lives and money in the rush to the be first to get there.

Also, would they allow foreign investors for whom the expense might not be a deterrent? It's a gamble at this point, for Obama politically and for any potential investors, but when has an uncertain outcome stopped a dedicated gambler?

I do see your points, you make a good case in defense of this policy.

I certainly agree with everything else you said regarding the media eg. I do remember journalistic standards. You don't have to go back to the Vietnam era to remember how it was before the Fox era. It wasn't perfect but at least there was a lot less opinion and more straight news. Murdoch has contributed greatly to the demise of journalism.

I find it difficult to just have faith that any politician is acting in our best interests. Otoh, you have presented a lot of food for thought. First, it will have to pass Congress so we will have an opportunity to gather more information on the issue.

There will be fierce resistance to it in the states that will be affected. No doubt this was anticipated as can be seen by the areas listed. States that have traditionally opposed it, are not included eg. Again, maybe this is brilliant strategy as the states listed are mostly states that could be seen as red states.

I hope you're right about the thinking behind it. And I hope that it is already fairly certain that it won't be worth the fight for those who have, for so long, wanted it.

We'll see in the coming months who is willing to back this policy with money. I would expect to see the Oil Lobby busy working on members of Congress who might be opposed, as we saw with the HC legislation. If they are not flooding DC, then that would be a good sign. But if they are, I would be very worried. Isn't that what it's all about in the end anyhow? Which I think you already said :-)

[rufus dog]

53. Talk to someone in the Bakersfield area

They had pumps that sat idle for decades, housing tracts were built around the fields then when gas went up to $4.50 a gallon, and barrels went way over $100 the pumps started cranking, for about six months. Then the Saudis took the profits from ripping us off and dropped the price of crude, shutting down the pumps.

In that case the infrastructure was in place and could be brought online quickly. Offshore drilling is a scam. Too expensive to get the infrastructure in place only to have the risk of being shut down by Middle East greed. So nobody is going to invest, other than people taken by scam artists.

[Javaman]

55. Exactly right.

First floating a huge floating rig that rents for 500K per day, then dropping pipe down to the ocean floor, THEN drilling in a hope to find oil under yet another 2 to 3 miles of sediment then rock at temps that would cook a roast. All in a hope that they find something worth paying for everything.

You are right, it's a complete scam. the oil corps and the repukes that hold large shares are about to make a killing off a very gullible groups of minor repukes without a clue. LOL

It's amazing to watch repukes eat their own, but they do it all the time and they never seem to fill up. LOL

I'm glad you brought up Bakersfield, I completely forgot about that.

Cheers!!

[Statistical]

67. So all offshore drilling is a scam?

Tell that to Brazil.

Deep water drilling has more risk but to believe that you can't find & extract oil in deep water is silly.
Major oil platforms aren't used for early exploration wells. Lighter, faster, mobile "drillships" are used.

You whole premise seems based on a gamble that oil companies will find no major oil field.
People wrote off any major deep water oil field off coast of Brazil decades ago.
That until Petrobras hit two back to back mega-fields in 2006 & 2007.


Shell seems to be doing just fine pumping oil out of those "scam" wells in Gulf of Mexico
http://www.chron.com/disp/story.mpl/business/energy/6938889.html

Shell officials said that in 1996, when the company first bought government leases to explore the three fields that feed into the Perdido hub — Great White, Silvertip and Tobago — the technology did not even exist to extract oil and gas from them.

Some tools, in fact, were developed specifically for the project, including equipment to separate crude oil and natural gas at the sea floor rather than on the platform.

“It points to the fact that we continue to push the boundary in terms of what's possible to bring reliable energy to this country,” Odum said at a news conference on the sidelines of the Shell Houston Open golf tournament in the Humble area.

[Javaman]

68. You read an awful lot into that.

scam, no.

There is oil out there, and the geo-formation located by Brazil is different than it is off the east coast of the US.

And if you want to use Brazil as a model...

http://www.businessweek.com/news/2010-03-10/petrobras-repsol-bg-find-more-evidence-of-oil-in-santos-block.html

that's 10 billion barrels of oil. that is a lot but it's no where near enough to save Brazil or the US if it was ours. That is of course, unless they conserve. And even conserving will only delay the inevitable. And if you go back up thread you will see that I stated just that. Suppose we shed foreign oil and try to go it alone by using only domestic oil, we would have to find enough oil that would supply the US with roughly 10 million barrels a day.

We currently produce about 8.1 million barrels and because of the recession, our daily use is down from 24 million barrels to 19+ million per day.

So let's say that 10 billion barrels is 1) all usable 2) able to be completely pumped out 3) none of it will ever get fouled 4) we have the tech to get to it.

That's a lot of "if's", anyway, so let's also take into effect the amount of oil our current field produced, many of which are starting to fail, begin decreasing via a bell curve at 2 percent a year, but as we pump more out, they will decrease in volume faster. so that 8.1 we produce now falls to somewhere around 6.5 million per day in 10 years. That means in ten years time, if we conserve and don't increase our need, we will need then, almost 13 million per day at current use.

So lets see...

10 million per day = 300 million a month.

300 million a month = 3.6 billion a year.

span that out and our 10 billion barrels lasts us less than 3 years.

So as big as 10 billion barrels is, for an oil hungry nation such as ours, it's not a whole lot.

See?

That's just based on needing 10 million a day, I didn't calculate what we needed when demand requires more or if our current reserves start to tap out.

If we are to maintain our worlds growth at its current rate, we will need 3 oil field discoveries per year on the size of the Gawar field in Saudi Arabia by 2020.

These discoveries around the world are mere drops in the bucket when compared to the discoveries made 40-50 years ago.

Also, with a little research you can see that exploration has ramped up significantly over the past 30 years but have no real measurable finds in comparison to the intensity of the search.

I didn't even take in EROEI. Which, if the oil is very hard and costly to get to, would decrease the usable amount.

In 1920, the EROEI was roughly 120 barrels of oil to 1 used for power.

Now, the best I have heard recently is 10 to 1. The rest vary but average around 7 to 1.

Oil is running out. Just a fact. It's finite.

[Statistical]

69. Never said we can drill our way out. That is one reason why offshore should be kept off limits.

The point is running out or not there is money to be made in oil.
EROEI is a reflection on energy efficiency not on profitability.
When oil gets over $150 a barrel (which it will) you can be very profitable even with very low EROEI wells.

Nobody is claiming we won't run out or that offshore isn't risky, or that EROEI is dropping. Those 3 are strawmen you put up to knock them down. Offshore oil likely will not be meaingful in terms of additional supply (or reducing price) however that doesn't mean they won't drill there.

The reality is your claim that Obama opened offshore because nobody will drill there is bunk.

Per shell article when they bought leases in the Gulf in late 90s they didn't even have technology to economically extract that oil. Today they pumping millions of barrels a year out of dozens of wells.

If there is oil below the waves (and there is very good chance at least a modest amount of oil is out there) then they will drill it.

[Javaman]

70. You seem to believe that just because there is oil out there corps

will automatically drill for it.

You really don't know anything about how oil exploration works do you?

You enjoy bringing the brazil discovery in other posts which really does amount to anything in the long run.

You also have to understand, that brazil had been looking for oil in those regions because geological studies showed that there was a high probability.

The geo studies for the east coast don't have the same degree of promise. If they did, exploration rigs would have been out there ready to go.

It's all hype and if you want to fall for it, that is your choice. Sometimes you have to understand the basic reality of certain things, do you honestly believe that Obama would take such a gamble? Has in in the past? no.

Everything he does is very calculated, whether or not you agree with his methods is a different thing entirely.

You can go on and on about not wanting to believe him, that's fine, that's your choice and if you choose to search my various posts over the past year, you will see that I'm certainly not a cheerleader for him. However, I do know my oil and I do my research. I have my reasons why and I will leave it at that.

The potential for a good return on oil extractions on the east coast is not high, because the oil returned on investment isn't good.

Sure, oil could sky rocket by the end of the year, I have my reasons to believe that it will, and to think that by allowing these leases to be opened now will allow corps to suddenly start drilling there at the end of the year is basically foolish.

The time it takes from lease to exploration to drill to return is about 10 years.

And the amount out there will not warrant the cost in 10 years. Unless we are so stupid as a nation to put us all in such desperate straights that we need a few thousand barrels here and there to keep our thirst for oil whetted.

Your alarm is valid, as well as your concern, but this is not the race you should be putting them in.

What you need to worry about is when the next republican gets into office. If then we experience high oil prices, expect public lands and national parks to be opened to drilling. There is oil in those hills, as they say, but that is the area we really need to be concerned about. The ability to drill on land in temperate climates is far easier to get a better return then something in the oceans that may or may not have oil.

cheers.

[Statistical]

71. Once again putting words in my mouth.

Of course they won't drill there just for fun or because there is some oil.
Oil companies will drill where they believe it is economical to recover.

Your are wrong about Brazil though. The area was explored extensively in the late 70s (kinda like we have survey data for east coast from 1970s) and all the big oil companies concluded there were no economical reserves. Brazil only decided to take a second look in early 2000s after other countries hit pockets with similar geographies. They couldn't get any companies to even buy leases so the govt financed early exploration.

All the data for eastern coast is 40 years old. Technology both for finding and recovering oil has improved dramatically over last 20 years. Oil can be profitably recovered from geology that was deemed uneconomical just 20-30 years ago.

The only way this "gamble" works if is oil companies NEVER find probability of recoverable oil in the area. Otherwise they eventually will drill there.

As far as timing. Who gives a flying crap is it takes them 2 years, 5 years, or 10 years to start drilling.

Is ecological damage in 10 years somehow suppose to make me feel better? Well they will ruin the beaches but don't worry it will be at least 2020 before there is a major spill. WTF?

[Javaman]

78. Meh.

knock yourself out. You don't care to listen to reality, that is your choice.

cheers.

[Javaman]

56. Google Baku oil pipeline. ;)

The difference between the Caspian and the east coast is the Caspian is a very well developed field. Hell, even hitler knew that. that was part of his southern attack plan when he invaded Russia during operation barbarossa.

the pipeline of which I mentioned, has long been a dream of a certain mr. dick chaney.

He has had massive dealings in that area for a very long time.

It has been suggested that invasion of afghanistan went wrong because the Soviets didn't want to share the wealth. The US wanted them to play ball with the oil and in exchange the US would look the other way while the soviets ran roughshod over afghanistan, but even back then the soviets had big dreams of being the new OPEC. But alas, the soviets, still being run by old WWII generals didn't play, so, the US, in retaliation, started supplying the taliban. The soviets shot their load financially, the country collapsed and ushered in a new nation. However, the stalwarts held over from the old soviet ear, cough** putin**cough, still wanted that oil all to himself. So, they go into the "breakaway" region known as the caucuses, but the reality is; it was the Azerbaijani's who were having the issue with the Caucuses. So in sweeps the new Russians to stop the "uprising" aka a little ethnic cleansing to pacify the Azerbaijani's all so they can get their hands on the oil.

Can you understand why the people in the caucus region are so pissed off?

If you were to go to Baku, you would see that the entire oil infrastructure is Russian made.

In steps dick chaney, he wants to cut a deal to create a pipeline through Az and Armenia, but as we all know those two nations don't like each other. So he tries to go the northern route through georgia, then back through turkey.

the russians don't want any part of this. So they begin the saber rattling with georgia, which happened about 5 minutes after the new Russian republic was formed. They saw the writing on the wall.

That area is a cesspool. The Caspian is a dead sea. Anything that still lives in it, is a toxic treat.

These deals are still going on and had been going on during george w. morons* reign of stupidity.

The caspian is a vastly different ball of wax than the east coast. If there were russian, chinese or some other nations put ships out there (there energy is nationalized) there would be a minor international incident. Those nations know that. So they have their work done by a third party aka the oil corps. All so very ethical. LOL

Now you also must remember, politicians may give the impression that they are looking out for the interests of the people of this nation, but always remember the old saying, "be careful of people who claim to be looking out for your own best interest". All politicians will only help us if it benefits them somehow.

They question you need to ask is: how does this benefit the white house? What do they get from this little tactic?

Nothing, absolutely nothing is ever as it appears. When they tell you to look in one place, don't; look in the other direction instead. :)

[sabrina 1]

59. A riddle ! lol, I like riddles ~

How does it benefit the WH? They claim they want Republican support for better energy policies.

Isn't there money to be made in alternative energy? The cost of living in a world fueled by oil is astronomical, not least in terms of the lives lost.

I don't know how this will benefit the WH. What you proposed as the reason behind this policy, is not what they are claiming as the reason. Obama has completely contradicted himself on this issue since the campaign. That could cost the Democratic Party in the fall. Losses because of HCR will add to the number of people who feel betrayed. And then there's the Wall St. bailout which alienated many more people. They can hardly afford to keep alienating their own supporters, that's hardly a benefit.

So, to even try to guess what they expect to benefit from it is beyond me at this point. But I'll think about it.

Regarding the Baku pipeline, I did read about it during the Georgia debacle. It was interesting that here in the U.S. most people did not know that Georgia was the aggressor in Osettia initially and that Russia went in to stop them. U.S. news painted the Russians as the aggressors without giving much information on the region at all, or the oil connection that was at the bottom of it all.

It is a mess as you say. But in a way doesn't it make MY point that people will be drawn towards any potential opportunity to get rich, or richer than they already are?

Reading the history of Baku and its oil resources, (going back about 500 years) I remember one Briton in the early 1900s while reporting on the situation regarding the pipeline, that he had concluded that the only way to achieve success in the area was by supporting a 'lasting peace'. He went on to make suggestions as to how that could be achieved. But, it never came to pass.

I think that as long as there is oil to be found, anywhere, any development of alternative energy will be delayed.

I still cannot think of any benefit to this policy of drilling in the U.S. but I'm sure it's related to a much larger issue than just calling the bluff of Republicans.

[Javaman]

61. The obvious benefit is...

weakening the position of those who want to drill us out of foreign oil dependency. That's not going to happen.

The hidden benefit is: by drawing in the republicans to answer to their own hair brained arguments, it weakens them when real energy policy is once again put up for debate.

Obama can say, "look, I gave you the drilling off shore, but it appears there was nothing there, because if there was, everyone would be running out ther to drill". But since Obama's pronouncement to drill, the repubs have been back peddling. So now they have no excuse. Granted, nothing stops the repubs from just saying no to anything else Obama puts forth, much like they have been, but they do it now from a much weakened position.

It appears as if Obama has finally had enough of their BS. (about time) He is slowly dismantling their arguments. He's a good lawyer.

There will only be money to be made in alt energy when there is sufficient demand. Until it's made attractive for not just businesses but also the average person to use, it won't go into mass production. I, currently power my home via wind. I did it as the right thing to do, not the cost effective thing to do, because it's much more expensive. I can afford it, but many people can't. And if you have a business who is struggling against foreign competition, any edge that you can get, regardless of "green image", is what they will always opt for. This is why it's really important for the whole world to get on board with alt energy, not just for helping the planet, but for changing the way business is done both in profit and competition. As for the average person, I would love to put panels on my home, but even with the rebates here in Texas, I still can't afford it.

Remember one other simple rule about politics: All politicians contradict themselves. None ever hold to their promises. If we come away from Obama's presidency with 10% of his promises kept, we will have done well.

As far as the fall elections, well, that is the fault of the house and of the senate. They woke up too late to recover from their stupor of trying to be nice to the repubs. They only have themselves to blame. Certainly not us. We, the people, have been screaming at them to get off their collective asses. Hard feelings last a long time in the public. Plus, in my personal opinion, the abandoning of Dr. Deans 50 state project right after the presidential election wasn't the brightest move either.

Georgia was the aggressor this time around, but if you go back to the early 90's when Russia was still trying to figure itself out, and Georgia was doing all it could to scrape off the Soviet stink, you will see overt moves by Russia to try and swallow Georgia back up. This has been a back and forth for a very long time. Georgia, this last time, just got really tired of having Russian troops stationed on their soil. Can you blame them? But their aggressive behavior was a very ill conceived action based upon a lot of hope that the international community would come to their aid, but given the set up and the prevailing atmosphere at the time, it wasn't a very wise move. Plus, the excuse by the Russians to go into Georgia was also very weak. Claiming to protect a disputed region between Russia and Georgia. The whole thing was a cluster for both sides.

As as people wanting to get even more rich based upon whatever fidgit is popular this week will always have a percentage of gullibility. You have to remember, there are those who invest, there are those who speculate and there are those who take long shots based on flimsy evidence presented by people whom they deem the "insiders". Those insiders will always make a killing on those seeking quick cash. This happens every day.

Using the early 20th century Brits as an example for how to deal with a nation, really isn't the best example. The first place the Brits sent forces upon the outbreak of WWI was to Basra in Southern Iraq. By 1914, much of the British Navy had been converted to oil. But like many island nations, they weren't very oil wealthy. Oil was well known to exist in Southern Iraq since the time of the Greek Empire. It was a key ingredient in Greek fire. If the initial battles in WWI were being waged, at first in Central Europe, why send troops to Southern Iraq? Also, you might want to see how the Brits divided up the middle east after WWI. I don't see any of that supporting of "lasting peace" going on there. But then, you also have to look upon what the term "lasting peace" meant to an early 20th century British General. It really wasn't much different than what we, the US, are doing over there now under the guise of promoting "peace".

As far as alt energy being delayed, because as you say, "as long as there is oil to be found", the fact of reality is: any alternative energy that is produced still uses fossil fuels to run their plants and to manufacture their products. The best solution would be to come up with a closed loop process. Engineers have, but alas, it's not cost effective. And that is the rub.

And lastly, you said, "I still cannot think of any benefit to this policy of drilling in the U.S.", you have to remember, nothing has been drilled for yet and probably won't be. Part of calling a bluff is just that, knowing that the other side is full of BS.

It's like this. Right now, it's not cost effective to explore let along drill. If the price of oil sky rockets to the triple digits again, oil will be the least of our worries. Food and it's distribution will be very high on the list. At that point, people, much like last time, will once again scream for electric and gas cars with better mileage (we are a fickle bunch), however, if you had noticed, (someone else pointed it out) that while Obama was giving the go ahead to drill, he also signed into law an increase in MPG for all cars and trucks to be increased by 2016 to 35 MPG. That's minimum. He knows what's coming down the pike. He knows that oil fields are failing all over the world, he knows that our current way of life is not sustainable.

What I see happening in the next few years are two things: 1) the price of oil will go up 2) we will have to conserve.

With those two things happening, the demand for alt energy will rise and things will begin in earnest.

I have always said here on DU and on a few other sites I post: if you want people to change, raise the price per gallon to at least 5 bucks. People will demand change then, rather than wait for someone to give it to them. Just the facts.

I honestly believe that the $147 per barrel spike back in '08, that was attributed to speculators, was a test. A test to see how people would react when the real thing comes along. Lots of data was collected.

I have been really enjoying this conversation. :) Cheers.

[sabrina 1]

74. A lot to absorb ~

But first, as I said before, IF there is zero chance of drilling because they know already that nothing is there, this is a great strategy.

But, :-) there's always a 'but' ~ I just read the post below, #66 which points out that there hasn't been any exploration for a long time, and that with new technology it is possible that what is known now, could change. S/he points out what happened in Brazil eg.

So, my question is, what if that were to happen here? It would be too late to try to reverse everything.

Regarding the British Empire, I wasn't suggesting that they were an example to follow. Absolutely not. Just noting that at least one person back then, probably had the right idea, that peace rather than conflict will be the only solution. So far, that still seems like a long way off, if ever.

'Knowing the other side of is full of bs'. Yes, but do we really know that?

I agree that even if we move towards alternative energy there will still be a need for fossil fuels. Good for you for using wind energy. I have a friend whose whole house runs on both wind and solar energy. He did it all himself, and it was expensive. However the more demand there is for solar panels eg, the cheaper they should be. As you said, if oil prices go up, the demand will increase. Obama did mention in his speech that we have had periods like that, but then we go right back to depending on oil. You may be right about the high prices being a test. I wonder what they discovered? I was surprised that there wasn't more of an uproar and increased demands for alternative energy.

The problem with raising the price of oil is that many people cannot afford it. People, especially the elderly, die when they cannot heat their homes. There would have to be some way to provide for the most vulnerable people even if prices were to go up.

I think it will be interesting to watch how the Oil Industry reacts to this.

Thanks for the conversation, Javaman ~ I enjoyed it also. :-)

[Javaman]

36. Some people don't like it when they are fooled

by a magician.

other people applaud it.

I have to admit, at first, I was pissed, but then I started thinking and came to the same conclusion you did. They released the info on a wednesday.

If they really wanted to piss off the left, they would have indeed tried to sneak this by on a friday dump.

This was artfully played.

With those on the left thinking they were sold out now screaming and the right also screaming that they never wanted to drill, the issue is put right up front for everyone to see and dissect.

And dissect they will. And as it's turning out, the right was completely full of total bullshit.

Obama probably said a few months ago, "do me a favor and see if you can get me the oil exploration reports for the lease areas on the East coast".

After looking over the data, he probably called in Chu and said, "what would be the cost of trying to extract what little oil lies out there?

Chu, scratching his chin responded, the the EIOER is negligible. It's a no win. It will cost them to much.

Obama smiled and thanked him.

And here we are today. :)

Obams ia a lawyer and a good one at that. He perpares his cases very well. It's not chess, he just does the foot work.

[Statistical]

66. That is one huge gamble. You are betting 40 year old technology didn't miss any oil

Nobody (even the biggest and best oil companies) thought Brazil offshore had any meaningful oil in deep water. See the problem is 30 years ago everyone assumed that oil can't form underneath salt formations. So when exploration hit couple hundred feet of salt they assumed there is no oil. Salt layer also reflects explosive testing very well hiding what is below it.

So the major oil companies wrote off Brazil deep water. After all the explored it "extensively" using state of the art technology in the 70s.

Then in 2006 Petrobras found 8 billion barrels in Tupi oil field beneath the salt layer, then another 8 billion in Jupiter oil field the next year.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aB2k_D7LKkv4

So what is your backup plan if the oil companies using new technology find billions of barrels? A "do over"? A ban on oil after they find it?

[Jeff In Milwaukee]

37. I don't think you understood the post...

The point here is that this has been a PHONY ISSUE used by the Republicans and their Oil Industry Bosses.

There was never any compelling reason to drill offshore, otherwise they would have drilled in any one of the thousands of leased areas that they ALREADY HAVE. They've just been using it as a campaign issue (and an excuse to keep oil prices high)

In saying, "Go ahead and drill off the coast of Virginia," Obama has called their bluff. They have to go out there and drill now or look like the liars and fools that they are.

There are going to be any oil rigs going up anywhere, anytime soon. And there probably never will be.

[Javaman]

33. Exactly. this is what the right fails to understand. Having a lease doesn't mean there is oil.

It just means they have a lease. They can poke holes in the ground there all they want, doesn't mean they will find a drop.

exploration is a costly issue for oil corps.

Screaming to drill in the past worked as good political pr, but when push comes to shove, the data shows the reality.

Obama called their bluff. He probably got his hands on some of that data and said to himself, "huh, this is all bullshit. let these idiots drill for all that "oil"."

This is why the right wing morons are now stammering as fast as they can to explain how the "didn't" say "drill, baby, drill".

the right was just expertly pwn'd by the big O. LOL

[rufus dog]

54. Having the lease does allow them to claim the "potential" as reserves

So if you are investing in oil companies you could be scammed. Other than that it is no harm no foul.

[Javaman]

57. yeah, that's done all the time.

It's amazing how many people fall for that. It's the same scam that was used in florida during the twenties to sell swamp land.

As long as they can keep claiming it has oil with out actually going out there to drill for it, they, in the past, could claim that the Dems were stopping them. Well, not anymore LOL

[Statistical]

64. What about Brazil in 2004?

Brazil opened offshore areas to exploration mainly because of hope there would be oil there.

Brazil really didn't expect to find any oil or more correctly any massive amount of oil.


Oil companies did a lot of exploration and found some small pockets (none they felt the desire to exploit) until 2008.

http://www.foxnews.com/wires/2008Apr14/0,4670,BrazilOil,00.html

A deep-water exploration area could contain as much as 33 billion barrels of oil, an amount that would nearly triple Brazil's reserves and make the offshore bloc the world's third-largest known oil reserve, a top energy official said Monday.

BLAM!!!!!! 33 billion barrels just waiting under the waves. Holy shit that was off the charts of even the most optimistic oil copany. It was truly a Black Swan event.

Once that happens you can't undo it. So by opening up area to exploration basically your line of thinking is that we can gamble they won't find oil.

What happens if they do. What happens if we have a Brazil event off the coast of Florida, or VA, or Maine?

[sabrina 1]

16. No, I don't get it.

T. Boone Pickens' statement is just one reaction to this announcement. And while he may not invest, there are plenty of others who will, right in the article you linked to:

The American Petroleum Institute, using the high end of government estimates, hopes that the opening of the areas on the Atlantic and eastern gulf alone would make available more than four billion barrels of oil and more than 30 trillion cubic feet of natural gas — enough to fuel more than 2.4 million cars and heat eight million households for 60 years.

“It’s a promising development and it recognizes that the administration understands the potential job creation and domestic energy production that will result from offshore access,” said Erik Milito, director of the institute’s upstream and industry operations.

And then there the foreign investors. What was their reaction to the potential to destroy the U.S. coastline? Again in your article, a statement from a Norwegian who is already in the business here, was very positive.

I know we are going to be getting the 'but see, Obama's playing chess' talking points again. That he's getting something in return and that we need not worry, because 'there's nothing there and it won't happen'.

Sorry, but we heard that before, from Clinton when he passed NAFTA eg and sold U.S. jobs in the 'hope' that it would benefit us sometime in the future. I'm sure the same arguments were made back then, that we are about to hear again.

I prefer to listen to those who have nothing to gain from this, other than the protection of our environment, and none of them are happy.

[Robb]

21. 4 billion barrels of oil, on API's high side.

There's that much undeveloped in the Bakken formation in North Dakota/Montana, measured by the USGS with the latest gizmos, and you can (almost) drive a truck up to it.

...You think anyone's going to put their money toward an expensive, unproven, unpopular investment? Foreign or otherwise? Guess again.

People here lately like to use the word kabuki. Well this was political theater, right here.

[sabrina 1]

24. No, it is Russian Roullette. At least let's get

the games Obama is playing right.

There is also natural gas and we do not know what is there. There are plenty of people willing to explore, probably using government funds if this should ever pass, which I'm hoping it won't.

The cynicism of it is what gets me. He didn't dare sell off any coastline where the people and their Senators are strongly opposed to it, even Republican Senators.

No, he takes advantage of states which are badly represented and the people will pay the price.

Please do us a favor and stop excusing this. If you agree with it fine, but don't try to sell it to people who are not so partisan that they can tell when they are being played regardless of party.

If you are correct, it's like handing a child a bomb wrapped in shiny paper and saying 'don't worry, it's timed to go off a year from now, so it's okay for him to play with it for six months.'

[Robb]

25. LOL there's no bomb, even.

Do the math. Watch the news cycle. And ease off the drama -- or don't, actually, because that's part of the process.

Obviously I'm not in favor of actually drilling for oil in environmentally sensitive areas. That's why I like this so much.

[sabrina 1]

26. If you are willing to play Russian Roullette with our

environment, do so. Btw, did you agree with George Bush when he did the same thing? Why did we oppose him again? What happened to all those potential drillers? Have they vanished into thin air?

I'm counting on the moratorium that Bush's proposals couldn't lift. But then again, reading your posts, it's 'okay if a Democrat does it' that might now be a false hope.

[Statistical]

63. So what happens when an oil company does some exploration and finds a massive find.

Nobody thought there was a lot of oil off coast of Brazil until this:

A deep-water exploration area could contain as much as 33 billion barrels of oil, an amount that would nearly triple Brazil's reserves and make the offshore bloc the world's third-largest known oil reserve, a top energy official said Monday.

http://www.foxnews.com/wires/2008Apr14/0,4670,BrazilOil,00.html

So when that happens how are you going to suddenly "undo" what lifting the ban will do.

Think you are going to be able to get political will to reinstate the ban AFTER they find a massive pocket of oil.

[texastoast]

41. Here's from Boone

We’ve got their attention and things are starting to move.

President Obama made the announcement this morning that he is in favor of drilling for oil off the shores of parts of the Atlantic Coast from Virginia on south, the Gulf coast of Florida, and Alaska. Why? Because the Administration agrees with us that we have to do what we’ve been saying all along: Anything American to reduce our dependence on foreign oil.

I want you to be among the first to see the official statement we put out today so you can be up-to-speed:

“President Obama’s plan to promote more offshore drilling for oil and natural gas is an important step in achieving true energy reform. We should be taking full advantage of every available American resource to help decrease our crippling dependency on foreign oil -- a dependency that is slowing our economic recovery and jeopardizing our homeland security.

“Even if the estimates of the reserves are correct, we are 10 years away from being able to use them. It’s imperative that we promote other immediately available domestic alternatives to solve the national security crisis created by foreign oil dependency.

“Transportation has to lead the way -- it accounts for two-thirds of our oil imports. No energy strategy can be effective unless it promotes the use of domestic natural gas as a transportation fuel alternative to foreign oil/diesel, and the focus has to be on America’s eight million heavy duty vehicles. The NAT GAS Act , a bipartisan bill proposed on both sides of Congress, would advance the use of natural gas as a transportation fuel.”

[Robb]

44. Classic, thank you. nt

[tabasco]

51. Hahahahaha! He called their bluff!

Am I right??

[Subdivisions]

76. Yes, you're right. It took me a bit to realize it, but this is a brilliant move.

Conducting new surveys will create jobs and it can no longer be used as a bat by the opposition. If there's profitable oil down there, it will reduce our dependence on foreign oil. If there isn't, at least jobs were created to find out.

I have several problems with it but mainly I'm concerned about the potential environmental impact. Another is that it diverts investment from advancing renewables.

But, politically, it's a win.

[Rosco T.]

52. T. Boone Pickens wants to make money...

.. no beans about that.

He's not gonna do something that a) won't make him money, b) won't make it reasonably quick, c) will cause him to lose money.

You may not like what he says, but if it comes to money and making it, believe him.

[bridgit]

58. Boone Pickens is a pretty smart guy

[Statistical]

65. Yeah Brazil thought the same thing in 2004.

Lots of old studies indicating small pockets of oil some in very hard to extract locations. Most were done by American companies in the late 60s and early 70s. Simply too little & too deep to be high priorities. They moved on to greener or maybe I should say blacker pastures.

Brazil energy dept opened up large sections of deep water to exploration in early 2000s. Why not sell some exploration leases right? win-win. Maybe the 30 year old technology missed something. rihgt?

Oil companies did about 4 years of exploring (at a pretty slow pace). Lots of small pockets. None that were immediately worth drilling (oil companies aren't looking for oil they are looking for cheap oil). They recorded them in their books and moved on.

THEN BLAM!!!!!!
2006 Petrobras strikes not just an oil field but a mega-field. Literally the LARGEST OIL DISCOVERY in 30 years.
Tupi oil field. 8 billion barrels. Present Asset Value in 2006 was $64 billion.

http://en.wikipedia.org/wiki/Tupi_oil_field

http://www.bloomberg.com/apps/news?pid=20601086&sid=aB2k_D7LKkv4

Still only one field right?
2007 Lightning strikes twice. Another MEGA FIELD. Jupiter oil field. Another 8 billion barrels
http://en.wikipedia.org/wiki/Jupiter_field

Now work is being done to build 18 platforms to extract oil from those two fields.

Further exploration in 2008 indicates Brazilian offshore oil may be as much as 33 billion barrels off the coast of Brazil. If it can be extracted at say a $30 margin that is a trillion dollars in oil. Oil is now a MASSIVE business in Brazil. Brazil could be the Saudi Arabia of the Western Hemisphere.

You can't put the Genie back in the bottle.
So this is essentially a massive gamble. You are hoping oil companies find nothing but what is your backup plan if they find something like the Brazilian Tupi oil field (which prior to 2005 nobody even knew existed).

Are you going to ask for a "do over"? You really think you can stop that snowball after they find billions of dollars worth of oil?

[uponit7771]

77. Great fact based reply (a rarety here IMHO) and you're right that it's a gamble but it seems like...

...a win win from a not so great decision. If we find oil there soon Obama can claim he helped find it fpr America and then put heavy restrictions around keeping it from fuckin up everything around it if we don't find oil companies will have to STFU.

The real problem is a KKKon president who wont give a damn what they do to the surroundings and let the oil companies put the oil on the "Free Market" vs selling it straight to US refineries at a small extraction profit margin.

[MilesColtrane]

72. The fact that Pickens is looking for federal subsidies for his planned giant wind farm...

in the Texas panhandle has absolutely nothing to do with his bearish prognostication on the amount of oil reserves offshore.

Nothing whatsoever, pardner.

[titoresque]

73. This is great!

And just in time for the primaries. No more "Drill baby Drill!" Love it!