SUN EDITORIAL:

Change the chant

Republicans wild about offshore oil, but wind is a much better answer

Saturday, Sept. 6, 2008 | 2:11 a.m.

Drill, baby, drill!

Egged on by former New York City Mayor Rudy Giuliani, thousands of delegates attending the Republican National Convention gleefully burst into that chant during prime time Wednesday night.

Their chorus was in support of opening more federally owned offshore sites to drilling, even though tens of millions of offshore acres approved for drilling are sitting idle.

Why they are pushing offshore drilling for oil as the predominant answer to the nation’s high energy prices beats us, unless they are simply, unthinkingly, following the politically motivated lead of their standard-bearer, John McCain.

Our heavy dependence on oil — mostly for transportation but also for producing electricity — is what is keeping energy prices high. Unless we as a nation reduce our demand, prices for oil-based products will just keep getting higher.

As oil is bought and sold on a world, not a national, market, only production that significantly raises the global supply of oil would significantly lower prices. The recoverable amount of offshore oil is unknown, but most analysts do not believe it is enough to have much effect on world supply.

The Republican delegates should have been chanting instead about diversifying our energy base by way of a different offshore strategy.

In June the Delaware Legislature approved a large wind farm 12 miles off that state’s shores, a project scheduled to be completed by 2012. Other wind projects proposed for the waters off Massachusetts, New Jersey and Rhode Island are in the approval stage.

Wind farms are becoming common on land throughout the country because they have proved to be a clean source of competitively priced energy. So why not go offshore, where the wind is often much stronger?

Environmental concerns about wind have greatly lessened over the past few years as technology has improved. And complaints about windmills’ being unsightly have dropped off considerably as the price of conventional energy has gone up.

Let’s hear a new chant in the offshore debate: Wind, baby, wind!

Discussion: 46 comments so far…

By jfnance32

9/6/08 at 2:34 a.m.

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"The recoverable amount of offshore oil is unknown, but most analysts do not believe it is enough to have much effect on world supply."

This is coming from the same crowd that supports Obama releasing 500,000 a day from the national reserve stockpile. According to Obama, that would have a "significant", on oil prices.

Also, why we would we want to keep trillions of dollars oil and gas locked up? Even if we did the wind magic plan, it would take many decades to convert. The last time I checked we can not pour wind energy into our cars. It is better to use our resources then to send trillions in cash to other countries.

Wind is not cheap. It produces energy at a price far above current market prices. Also, it requires building miles of expensive high power transmission lines.

Wind is not a reliable 24/7 source of energy. For each kilowatt of wind that we have then we will have a standby kilowatt of reliable coal, natural gas and nuclear energy. We will be duplicating captial and labor cost. Only fuel cost will be saved.

Storing energy currently is a very expensive technology. It will at least doubles the cost of the wind or solar plants which are already not cost effective systems as-is.

This is typical of Democrats. They really do not care about the wallets of the everyday Joe that live paycheck to paycheck.

If we added a ton of expensive of wind and solar to our utility bills then I would expect Democrats to duck for cover just like they do when gas prices are high. The never fuss up to wanting to keep trillions of gas and oil locked up.
By Future2012

9/6/08 at 7:50 a.m.

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Nobody, except Cape Cod residents and environmentalists, has stopped Wind Power, even though the price point is not yet competitive.

Bring Wind on and get those roadblock environmentalists out of their protect the earth at all cost mode.

But we still need all of the above domestic energy source to stop sending 700 billion petro dollar over seas.
By colonelmoore

9/6/08 at 8:45 a.m.

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Three points to be clear about:

1) Anyone who paying attention knows that the offshore drilling mantra is one part of a comprehensive plan including alternative sources of energy and fuel efficiency. This was ignored in the editorial.

2) Offshore wind costs much more than land-based facilities. Laying the infrastructure to bring the power ashore is expensive. Sea water corrodes. This is why several European offshore wind projects were canceled in spite of Europe's hefty wind subsidies.

3) Energy does not equal fuel. Wind does not fill gas tanks. Replacing gasoline with wind (or nuclear power for that matter) will need massive changes to our energy and transportation infrastructures. This will take a long time and lots of money.

We should pilot test strategies with long-term promise first before making heavy commitments. And we should prioritize strategies that can increase fuel supplies without overhauling existing infrastructure. Drilling can be relied on as a stopgap until proven alternatives are on the table. This is the McCain plan.
By laguna

9/6/08 at 9:15 a.m.

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we need the 'all of the above' energy policy, if the Greenspun empire wasnt against nuclear power, we would hear about it also.
By notacon

9/6/08 at 9:15 a.m.

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Please note that we are presently subsidizing oil heavily though the need for a large military presence in the middle east.

We can use compressed natural gas from domestic sources for vehicles and use plug in hybrid technology for the first 30-40 miles of travel using the present battery technology. Even Iran presently has dual fuel (gasoline/natural gas) capabilities on their new automobiles.

The 30-40 miles is the distance of the average daily commute in the US. Wind and solar can contribute heavily to providing the electrical energy for that first 30-40 miles.

I would rather subsidize the construction of permanent wind farms and solar plants located on US soil than military missions abroad to protect our oil supply.
By Future2012

9/6/08 at 11:14 a.m.

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Apparently Harry Reid and Nancy Pelosi did not “hear” the whole solution from the Clean Energy Summit.

It included Clean Coal, Nuclear power, and “drilling”. Even Barak Obama and T. Boone Pickens have these as part of the “all of the above energy security package” they would support.

So far we still are not serious about funding energy security. Note:
- The economy is $13 trillion per year
- The federal budget is $3 trillion per year
- The petro dollars going out of the country are $700 billion per year

And yet Congress is arguing about funding just $15 billion of renewable price supports per year (Obama’s $150 billion over ten years).

But, first Harry and Nancy, are playing a game of making winners and losers. Harry and Nancy have to treat hard to get oil support as enriching big oil, while the rest of us want to stop the impact of sending $700 billion down the drain.

Do it All, Do it now, Do it Domestic.
By redikop3

9/6/08 at 11:16 a.m.

Comment removed by staff.
By dmoran

9/6/08 at 11:34 a.m.

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The reason the chant is "drill, baby, drill" is because that is the area where the parties disagree. We already agree on "wind, baby, wind" and other alternatives. Where we disagree is on whether immediately switching to alternatives and conservation can alone meet our energy needs for the next several decades. Energy professionals say no way. Not only is drilling going to meet only a fraction of our needs, the same is true of conservation and alternatives for many years. For instance, if we were to immediately get 3 million conventional cars swapped out for 3 million cars getting 100 miles to the gallon, the impact would be to reduce our annual oil use by only 1%. Obama is hoping to get 1 million plug-in hybrids on the road by 2015. Conservation is actually the only way to make a more sizeable impact immediately, but that won't do it alone either.

Drilling would only partially replace fields on which we currently depend which are in decline. We would still need to move toward alternatives. Obama said that drilling is a "stopgap measure" in his speech. What he did not say is that he seems willing to consider it as a necessary stopgap and is looking at it seriously. McCain was right when he said the two sides need to stop rejecting good ideas merely because the other side thought of it first. Democrats had a good reason to oppose drilling when it was a major threat to the environment. But now that there are effective improvements in drilling technology and we are facing an energy crunch which could seriously damage world economies in the coming decades, we all need to embrace a "do everything" approach.
By peterclarke

9/6/08 at 2:03 p.m.

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What the Americans need is to get off purchasing foreign oil asap and start drilling for new oil and gas plus using all their own new sources of energy now. Because Every 1 year of delay in drilling for USA oil=10 more years dependency on foreign oil, which =20 more years of fighting foreign radical Islamic terrorists paid for by our continued purchase of $700 billion per year in foreign oil.....Keep smiling....
By BritheGreat

9/6/08 at 2:08 p.m.

Comment removed by staff.
By truthdetector

9/6/08 at 2:58 p.m.

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If anyone wants to know the TRUE facts, then read on:

1. Why not go offshore?: way more expensive than on land (see Denmark), hypocrites like Sen. Kennedy don't want them close to "their beach," and WE HAVE THE BEST WIND POTENTIAL IN THE WORLD ON LAND, stretching from Texas to North Dakota.

2. We limit off-shore drilling to 125 miles off the coast, BUT China is going to DRILL OUR oil off of Cuba, which is less than 50 miles away from the Keys.

3. Yes, we should all conserve, which is what we are doing - oil consumption has DECREASED by over 400,000 barrells per day (bpd) in 2008.

4. As for the US using oil for electric generation, these oil based products account for only 1.1% of US electric generation.

5. US electric generation as of April 2008 : coal 50%, nuclear 20%, Natural gas 19%, hydroelectric 6.7%, petro-fired 1.1%, others - primarily biomass, but also geothermal, wind, solar - only 3.5%.

6. Need to drill in ANWR:
A. Not a forest, it is frozen TUNDRA most of the year, small footprint, next to Prudhoe Bay - our largest discovery EVER, Alaskan pipe-line only pumping at half capacity, thus ANWR would greatly extend its useful life, will harm less animals than wind(let's not forget the birds, bats,), plus it has a TON of oil.

7. Say what you will, but GW Bush did more for renewable energy than anyone else, and I think these should all be expanded: THE FACTS:
A. Wind Power capacity in MW :
year 2000 - 2566 mw's
current existing - 19,549 mw's:under construt 9,022 mw's
B. Solar photo. peak kilowatts :
year 2000 - 19,838 kw ; year 2006 206,511 kw
C. Ethanol :
year 2000 - 1.63 billion gallons ; 2007 - 6.5 billion gallons ; current capacity - 9.961 billion gallons, with another 3.79 billion gallons capacity under construction.
D Biodiesel :
2000 - 2 million gallons : 2007 - 450 million gallons.
E. I also support hybrids, electric plug-ins, and E85 flex-fuel, increased MPG standards, nat. gas, and clean coal. E85 has huge potential, but state gov't fraud, such as in NJ, which gets a federal subsidy for using E85 capable vehicles for their fleets, but have ZERO E85 filing pumps, has hurt the cause. States such as Minn. and Illinois, are doing a fine job. No, I don't support Obama, but I call em like I see em. Country first!!!

In conclusion, we do need to drill for more domestic oil. Domestic production was over 6.5 million bpd in 1995, but now only 5 million bpd, with over 26% coming from the hurricane-prone Gulf. Folks, we need to drill in ANWR and LIMITED increase off-shore. PERIOD.

FULL DISCLOSURE : I have a major interest in a bio-diesel plant in Ohio. We currently use soy, but are experimenting with other, more sustainable sources. Yes, all the things I mentioned will DIRECTLY compete, and possibly hurt, price per gallon for my bio-diesel, but remember COUNTRY FIRST. Thanks for your time,

TRUTH DETECTOR
By truthdetector

9/6/08 at 3:06 p.m.

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BritheGreat,

I agree that we need to drill, and do ALL the above. Let's not forget, plug-in electrics ( like the Chevy Volt), will be here within a couple years. Nothing wrong with using more US wind to generate more US electricity for US Chevy Volt.

TRUTH DETECTOR
By jfnance32

9/6/08 at 3:42 p.m.

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The solar and wind need more time to mature.

They are expensive technologies that generate energy at 2x's the price of current market prices.

The Volt will be a disappointment.

It will cost around $48,000.

It will be a tiny car with very few thrills.

It will need to be recharge after 250 miles of use for 6-8 hours which is not user friendly for long trips.

All these things are good starts.

It will be decades before solar, wind and the electric car can provide meaningful cost effective uses.
By mbecker908

9/6/08 at 3:59 p.m.

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Wind baby Wind.

OK, I'll support that, along with drilling in the OCS and ANWR. I'll support wind, along with building new nuclear power plants. I'll support wind, along with coal gassification. I'll support wind, along with developing the technology to extract oil from shale and opening up the oil shale reserves in the Mountain States.

I'll support wind, as part of a long term energy strategy. You might want to address your editorial to Senators Kennedy and Kerry, however. They have the opportunity to support wind power with Cape Wind, but are doing everything in their power to kill it. Harry Reed should be pushing this program and bringing the Senators from Massachusetts into line on alternative energy.

Hypocrites.
By MrT

9/6/08 at 4:23 p.m.

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Come on now...yu know what the chant meant. It meant that the Democrats alligned with the Environmentalist wackos has prevented any new drilling for 30 years. In 1996 the REpublican congress passed a bill to allow more drilling and Bill Clinton vetoed it. If we had drilling back then we wouldn't be in the pickel we are in now. Also, the last I looked, natural gas also need to have wells drilled. We need all energy sources...ont one.Wind is good fro only some select locations...and Liberal Ted Kennedy blocked the largest privately funded wind farm on cape Cod..so Democrates have also opposed wind energy!
By howdydostu

9/6/08 at 4:50 p.m.

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Has anybody noticed that the price of oil, though unstable, has dropped about $40.00 a barrel WITHOUT opening one more refinery or drilling one more oil-well??
Drilling gives permission for companies like Exxon-Mobile, who have NO allegiance to the United States, to continue PUMPING BILLIONS OF THEIR OBSCENE PROFIT DOLLARS to hostile countries!!
The fight after 9/11 was misguided, we should have started our quest in ernest to free ourselves from terrorist bondage...we were told to go shopping instead!! We lost 8 precious years with no real leadership.
The Republicans under McCain-Palin want more of the same..I say we take up the call of a 10 year goal and see what we can accomplish!
Wake up, citizens and take the challenge...in 10 years, without drilling, we can have REAL energy independance!!
Its the anniversary of 9/11...we must NEVER forget!
Stuart & Robert Wyman-Cahall
Las Vegas, NV 89142
By jfnance32

9/6/08 at 5:24 p.m.

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1st...the price oil always goes down during the fall. It will go up some during the winter...fall in the spring

2nd...The US, China, Japan and Europe are either in a recession or very slow growth...this is pushing demand down.

If demand returns to the same level this past summer next summer then expect gas prices to go up back to around $4.00 or higher.

The reason why they are so high during the summer is that peak demand is just marignally above supply capacity. Any thing, like a storm or a war, could push demand above supply. This makes contracts for future deliveries of oil very valuable.

There is no way in 10 years you can have energy independence without more domestic drilling. Even Obama's website says so. It is impossible unless we are willing to stop driving or spend a trillions of dollars on expensive replacements systems..
By shihan

9/6/08 at 6:37 p.m.

Comment removed by staff.
By howdydostu

9/6/08 at 7:50 p.m.

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There is far more going on other than supply-demand issues when the price of sweet crude oil drops the way it did! Even the threat of recent hurricanes barely nudged the price upward, which has always been the case.
Maybe I'm old enough, or maybe young enough, lol, to remember when our leaders would challange us. People didn't scoff when JFK challanged us to put a man on the moon within 10 yeas...in those days we had what was called the American spirit...something that these last eight years have robbed us of.
09/11 was an oppertunity squandered and the people in power, via McCain-Palin, want 4 more years.
Enough!
Stuart & Robert Wyman-Cahall
Las Vegas, NV 89142
By Gordon

9/6/08 at 8:07 p.m.

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Nance: Can you point to another seasonal reduction of 27%? (and still falling, many predict will level off around $80 barrel, a 45% reduction).

Why didn't republicans pass offshore oil drilling when they controlled government from 2001-2006? One reason is McCain WAS against it.

Are you really surprised the price of a barrel of oil rose from $30 to $147 with a Texas oil man running the country? Read about the manipulation of supply and price here http://wyden.senate.gov/issues/wyden_oil...
By odeman

9/6/08 at 8:19 p.m.

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Although all of you people posting here care and want to get things done, what about your neighbors? Will they allow you to put solar panels on your roof or a windmill in the backyard or will they take you to court? Try to pass an ordinace to allow those same things, will your neighbors shoot it down? Redrock wanted to build a much taller hotel, and the zoning allowed it, but a few vocal Summerlin residents created trouble so they built smaller. It was probably the same people that tried to keep that new interchange closed. Between the wackies and your own neighbors, it's going to be a tough road to energy independence.
When one considers that there are well over 100 million vehicles on our roads, the decline in the amount of gas used isn't much. While you may have cut your usage of gas, your neighbor is whining about the high price but is still flying low in his gas hog and putting on the miles.
By truthdetector

9/6/08 at 8:24 p.m.

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odeman,

You couldn't be more WRONG!!

http://www.api.org/Newsroom/demand_five_...
By truthdetector

9/6/08 at 9:16 p.m.

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Gordon,

Let's not try to re-write history.

http://www.worldnetdaily.com/index.php?p...

As for for your article about the 1990's, it was about REFINING CAPACITY!!!

http://tonto.eia.doe.gov/dnav/pet/hist/m...

And if a couple POS oil companies tried to manipulate, which you may have a point, why would you blame McCain?

We do NOT need any new refineries. If you look at the utilization percentages (table above), capacity has been in the mid to high 80's for the last two years. This is due to the HUGE increase in the use of ethanol for the last year and a half. Remember, ethanol and bio-diesel does NOT need to be refined - just blended. Ethanol usage in the US has replaced almost 7% of the gas we use in our vehicles, and will be 10% next year. And bio-diesel usage is also starting to rapidly accelerate, which would again increase refining capacity.

If Bush truely wanted to "manipulate" the cost of oil, why, Sir, would he ramp-up renewables usage (increase supply), increase MPG standards for auto man. (decrease demand), and call for more drilling (increase supply). Don't Liberals understand the law of supply and demand?
By truthdetector

9/6/08 at 9:44 p.m.

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howdydostu,

Once again, supply and demand.

http://blogs.dailymail.com/donsurber/200...

Liberals can't seem to understand the concept of the futures market.

The price of oil DID spike just before Gustov, but quickly fell when it was much weaker than expected. Check the records.

As for 9/11 and having "American Spirit," I sure am proud of our President for protecting the homeland, and I sure am proud of our troops and their "American Spirit." But then again, I do "cling to my guns and religion."

You unbelievably wrote the following:

Has anybody noticed that the price of oil, though unstable, has dropped about $40.00 a barrel WITHOUT opening one more refinery or drilling one more oil-well??
Drilling gives permission for companies like Exxon-Mobile, who have NO allegiance to the United States, to continue PUMPING BILLIONS OF THEIR OBSCENE PROFIT DOLLARS to hostile countries!!

I already tried to educate you about not needing refineries, so let's move on. I agree that we shouldn't force Exxon to drill overseas, They should drill HERE.

Now, sir, please give us your "energy plan." Come on, show some leadership and let us in on your "secret plan" to become energy independent in 10 years, without more drilling, of course.
By Gordon

9/6/08 at 9:53 p.m.

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If you read the report it details supply manipulation (both oil and refined gas) to drive up price. Why don’t neo-cons understand supply and demand and its affect on price. Check this chart to see their efforts in action http://tonto.eia.doe.gov/dnav/pet/hist/w...

I didn’t blame McCain for manipulation, I just pointed out the hypocrisy that McCain was against offshore drilling.

“ramp-up renewables usage (increase supply), increase MPG standards for auto man. (decrease demand), and call for more drilling (increase supply).” Thank you for pointing out the Democrats accomplishments since 2006.

700 billion to the middle east? Is that per year or total? Look at the chart of where our ‘foreign’ oil supplies come from here: http://tonto.eia.doe.gov/dnav/pet/pet_mo... Not all from the middle east, and not all middle east countries are enemies.

Can somebody provide a source for the claim ‘700 billion being sent to the middle east’?

The price of a barrel of oil was $22.10 in January 2001 (see http://tonto.eia.doe.gov/dnav/pet/hist/w... )

The recent peak price of $147 in July 2008. An increase of 560% since Bush took office. This would also amount to a 560% increase for the middle east under the Bush administration.

The battle cry of republicans used to be lack of refining capacity. They just leave out the fact that Big Oil voluntarily shut down refineries to reduce supply margins. See the number of operable refineries by year here http://tonto.eia.doe.gov/dnav/pet/hist/8... . They constantly touted that no new refineries had been built in 20 years, never mind what was VOLUNTARILY shut down.
By Gordon

9/6/08 at 10:03 p.m.

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Does big oil really want to increase supply?

20 million acres in the western gulf coast were offered for lease August 20, 2008 at auction. "About 90 percent of the tracts the government auctioned off received no bids." Read the full article here http://ap.google.com/article/ALeqM5gB6bi...

Production at existing fields can easily be increased with additional straws, but that would bring down prices. Something big oil does NOT want.
By Gordon

9/6/08 at 10:13 p.m.

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Thank you for calling me a liberal. Liberal is defined as: broad-minded, tolerant of different views and standards of behavior in others.

You would insult me by calling me a conservative. Defined as: Narrow-minded, reluctant to accept change, in favor of preserving the status quo and traditional values and customs, and against abrupt change.
By truthdetector

9/6/08 at 10:26 p.m.

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Gordon,

1. I wasn't aware that the dems. called for more drilling since 2006.
2. Could you please point out any reference that I made about $700 million. But I will answer anyway. I would put the figure at $300 billion. The $700 billion LIE comes from T.Boone (import 5 mbd X $140 = 700) T.Boone is looking for fed. handout, btw Pelosi just invested $100,000 with him. Let me guess how she will vote?
3. As for the $22 pbb in 2001, please look at the increase in demand from China, US, and India since 2001. Then look at decrease in supply. Once again, supply/demand.
4. I have posted that I am in the bio-diesel bus., so believe me, I am no fan of big oil.
5. If you credit the dem. Congress for #1, why don't you also blame THEM for $147 ppb? How can you have it both ways?

I am actually enjoying this. Thanks.
By gfsomsel

9/6/08 at 10:32 p.m.

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A quick survey of the responses here does not reveal any mention of nuclear power. This should be implemented. A large portion of France's electrical needs are met with nuclear power. While I have some reservations regarding nuclear waste, I think it might be feasible to shoot it into the sun where it would simply add a small quantity to it.

Wind is highly questionable. It is unreliable and poses a hazard to migratory birds and bats.

http://www.heartland.org/policybot/resul...

http://www.greatfallstribune.com/apps/pb...

Drilling will provide energy while the development of other sources is pursued.
By jfnance32

9/6/08 at 10:35 p.m.

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Conflicting logic:

Oil companies do not want to drill.

So we should not allow them to drill.

Or perhaps you fudging your logic.

In the same paragraph, it says "A total of 53 companies offered $607 million for leases covering 1.8 million acres in federal waters off Texas. About 90 percent of the tracts the government auctioned off received no bids. The highest bid — $61 million — came from StatoilHydro USA, followed closely by Chevron USA Inc., which offered $52 million for a tract."

Why would they bid $600 million on areas?

Perhaps, they think there is a good chance of oil in thoses areas.

Of course, they are not going to bid on areas where they think there is no oil or little oil.

The bids are not a sure thing. They still have to do future testing to see if the bid area actually has drillable oil.

Here is a study by a government agency. This is the same agency that Democrats want to give more power to oversee the foreign oil markets.

http://www.cftc.gov/stellent/groups/publ...

It concluded: "The Task Force’s preliminary assessment is that current oil prices and the increase in oil prices between January 2003 and June 2008 are largely due to fundamental supply and demand factors"

And "The world economy has expanded at its fastest pace in decades, and that strong growth has translated into substantial increases in the demand for oil, particularly from emerging market countries. On the supply side, the production of oil has responded sluggishly, compounded by production shortfalls associated with geopolitical unrest in countries with large oil reserves."
By jfnance32

9/6/08 at 10:35 p.m.

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Here is another article from the Federal Reserve Bank on the topic:

http://www.dallasfed.org/research/eclett...

It says: "A good starting point is strong demand, which has pushed world oil markets close to capacity. New supplies haven’t kept up with this demand, fueling expectations that oil markets will remain tight for the foreseeable future. A weakening dollar has put upward pressure on the price of a commodity that trades in the U.S. currency. And because a large share of oil production takes place in politically unstable regions, fears of supply disruptions loom over markets."

Here is a NY Times article, it says: "Bolstered by speedy economic development and industrialization, energy demand from Asia has been one of the main contributors to higher oil prices. Over the last two years, China and India accounted for about 70 percent of the increase in energy demand and the world’s energy needs would increase 55 percent by 2030. "

http://www.nytimes.com/2007/11/07/busine...

The core reason for the high gas prices this past summer is that peak demand was marignal above supply capacity. Any distruption in supply, like a storm or a war, could push supply beneath demand. That makes contracts for future promises of oil very valuable.

Demand goes down during fall so prices will fall.

Demand goes back up during the winter so expect them to go back in the winter.

Demand goes down during the spring so prices fall during the spring.

Summer is peak demand and that is when prices will be the highest.

Japan, China, Europe and the USA economies are weaking so that is pushing demand down, too.

If those economies recovery by next summer then expect high gas prices next summer.
By truthdetector

9/6/08 at 10:58 p.m.

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jfnance32,

SPOT ON. Once again, it goes back to supply/demand. If the fed opened up acres that actually had oil (supply), than the oil companies would actually bid for it.(demand)

And since it currently costs about $80 pb to produce, and this number is going to $90 - $100 pb, I don't think to many companies will line up. Let's see, purchase a lease, invest another $100 mil for platform, HOPEFULLY find oil, pray you don't get hit by a hurricane, hope the Suadis (who can produce for a couple bucks per barr) don't squeeze you out, hope that you don't spring a leak and get sued, finally make some money, give half to the gov't ...for nothing...and than listen to Obama talk about a WINDFALL TAX. Fed has it good..claim land, charge for a blind lease, take a cut if they find oil, tax the end users by the gallon at the retail level...and if they find A LOT of OIL....WINDFALL TAX.

http://money.cnn.com/2008/08/21/news/eco...
By truthdetector

9/6/08 at 11:02 p.m.

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gfsomsel,

I agree about nuclear. I don't know about shooting it into the sun, "that's above my pay-grade." lol
By moi61537

9/7/08 at 6:15 a.m.

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Has anyone considered how large wind farms and large solar collector farms could disrupt wind and thermal patterns? What function does solar heating of deserts and arid plateaus perform for the overall weather patterns of the Earth. If solar collectors prevent that heating will there thermal plumes coming from the solar collectors? How about disruption of wind patterns by large turbine farms?
By Gordon

9/7/08 at 7:37 a.m.

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Nance: "Conflicting logic: Oil companies do not want to drill. So we should not allow them to drill."

Democrats want a condition on all leases of 'use it or lose it'. Why? Because oil has sat on millions of acres already leased to them for decades. Why do republicans refuse to allow a simple condition that would force them to drill.

Democrats have tried to get a vote 8 different times for comprehensive energy legislation. The republicans have blocked each of these votes due to 'use it or lose it' conditions and doing 'all the above'. Republicans 'talk' of doing it all, but ONLY want to vote on 'ONE solution' UNrestricted offshore oil leases. Democrats are looking out for the taxpayer, Republicans are looking out for big oil.

A combination of demand destruction, a strenghthening dollar, and seasonal demand declines, have brought prices down. Now that current production exceeds demand, how much you want to bet that production falls, keeping supply even with demand. Big oil was caught off-guard with worldwide demand destruction due to Bush's failed economy. As long as you keep supply and demand 'even' prices will remain high, but big oil only has control of the supply side.

Gas is down 60 cents a gallon with no drilling legislation passed. Every expert has said that drilling ALL of our resources would 'maybe' bring down gas prices 5 cents in 10 years.

Nance: Still waiting for your example of another period where seasonal adjustment brought prices down 27%.
By jfnance32

9/7/08 at 9:33 a.m.

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"Every expert has said that drilling ALL of our resources would 'maybe' bring down gas prices 5 cents in 10 years."

Obama said that releasing 500k daily barrels from our national reserve will have a dramatic effect on gas prices. I guess you disagree with your candidate on this and did not consider Obama's group to be an expert on the subject.

We need to return to the point that supply cacapity has a safe marginal above peak demand during the summer. Now supply capacity is just above peak demand. Any disruption like a storm or war could push demand above supply. This adds a premium price to contracts that promise future delieveries of oil.

Once we return to a safe margin then the premium will be removed during the expensive peak demand summer months.

Adding supply is critical to returning the market place to a stable environment.

"Democrats want a condition on all leases of 'use it or lose it'. "

The oil leases already have "use it or lose it". I think the Dems want to narrow the time window.

Oil companies bid on leases because they have some indication there is profitable oil in the area. Once they get the lease they they do drill tests.

If an oil lease does not have oil or little oil then the oil companies will not spend money to lose money.

"Nance: Still waiting for your example of another period where seasonal adjustment brought prices down 27%."

We just left a period where peak demand was marignally above supply. That marginal difference between supply and demand and the possibility of an Iranian conflict to disrupte oil production and deliveries has never occurred in the marketplace. Oil purchasers had high anxiety that any event could push demand above supply.

Since the summer months are ending then demand has fallen to a point where this anxiety has been greatly reduce and there is no need to pay premiums for future promises to deliever oil.

The world's economy is cooling and this trend continue then next summer there will be more safety margin of supply over demand. Prices will not be as high as this summer.

But if economy recovers by next summer and if not enough significant supply is added then expect prices to be at the same or near same level next summer.

I posted three articles from highly reputable sources (CTC, Federal Reserve and NY Times) that say the price of oil has been a reflection of this problem of marignal supply above peak demand and the high possibility of war or storms to disprupting supply.

I can find more articles if you want me to.
By Gordon

9/7/08 at 9:47 a.m.

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Nance, in reality your saying basically the same as me. We differ on how 'supply' is manipulated.

There is a big difference in bringing 500k a day online in 10 years and bringing that online today to regulate supply margins.

Capitalism only works when we have fair regulation and antitrust laws preventing price fixing, price gouging, and monopolies. Evidence is mounting that the Big 5 oil companies have worked together to manipulate the markets.
By shihan

9/7/08 at 10:22 a.m.

Comment removed by staff.
By jfnance32

9/7/08 at 10:32 a.m.

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"There is a big difference in bringing 500k a day online in 10 years and bringing that online today to regulate supply margins."

10 years ago Clinton veto ANWR.

If 10 years ago if ANWR was open then most say it would have produced 2 to 3 million barrels a day which is well above 500k a day.

That short sightness is hurting us today.

Locking down trillions of dollars of oil and gas will hurt us in the future.
By truthdetector

9/7/08 at 11:35 a.m.

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Dems energy policy :

NO TO DRILLING FOR OIL - ANYWHERE!!!!!!
NO TO USING COAL FOR ELECTRIC GENERATION!!!!!!
ZERO USE OF CARBONS FOR ENERGY!!!!
GOOD OLE AL GORE :

http://www.usnews.com/blogs/capital-comm...
By Gordon

9/7/08 at 4:56 p.m.

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Trying to explain economics to a neo-con is like trying to explain it to a 2 year old. Your thoughts are dictated by the Talking Heads you worship. I'm sure you agree with GWB that our economy is fundamentally sound.

I am a well compensated CFP and market analyst who does his own research and comes to logical conclusions. My clients have made nice profits this year due to my analysis, which has been spot on. I don't expect you to agree with anything a 'liberal' would say, right or wrong. I also would never claim to be 100% correct, no one analyst is.

"with India and China competing for a larger share of oil on the world market, the demand has increased while the supply has remained practically the same"

You've stated exactly what I've been saying, Big Oil controls supply to be even with demand.

"The oil companies don't set the price, YOU DO!!!" Please do explain what future trading is and how the deregulation of energy trading has affected the current markets.

So now that current production exceeds demand, watch production(supply) fall to stay even with demand. I realize you will never see anything other than what's told to you by your false gods, but maybe someday you'll see reality.

I obviously am not going to type a 300 page analysis on a blog, but that's about what it would take to fully cover this complex issue. Bottom line there IS manipulation going on.
By truthdetector

9/7/08 at 6:29 p.m.

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Gordon,

Cute, let's just call people pagans. And I am sure we are all impressed with your qualifications. I am just a good ole boy from Ohio, with an MBA and MSA from OSU. I, unlike you, have taken a private oil exploration company public, cashed out, and am currently invested in a bio-desiel plant with almost 50 mgy production capacity... And another 50 mgy plant about to break ground by Lake Erie.
As a "well compensated CFP," why would you not want to drill in ANWR in order to diversify production away from the hurricane plagued GOM? Furthermore, my partner spoke with Rep. Young of Alaska over the weekend, and I was pleasantly surprised to learn that oil can be produced from ANWR at about $2.5 per barr., as opposed to $85 - $90 per barr, in deep water gulf.
I do agree with you on one thing : I believe we will see a cut from OPEC.
By Gordon

9/7/08 at 7:47 p.m.

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Personally I have no problem with ANWR or offshore drilling. I do have a problem with the way it is presented as the 'cure' to our energy problems. I also do not want domestic resources given away to greedy/manipulative oil companies with no restrictions or oversight.

Republicans assume all democrats follow the party line the same way republicans do. Democrats are open to debate, free thinking, and able to compromise to move forward with quality legislation and in our case discussion. (Yes their are extreme lefties, but extreme right is much more common)

Do you agree with royalties paid to citizens for domestic oil? You already stated you feel 'windfall profit tax' is wrong. Do you realize Palin supports both. Read http://www.theglobeandmail.com/servlet/s...
If it wasn't for her inserting religious ideology into politics and government, I'd consider voting republican.

OPEC is expected to keep production steady at its meeting Tuesday.

I'm curious, what's the minimum per barrel price to keep biodiesel a viable alternative?
By revtomperl

9/7/08 at 9:29 p.m.

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Ok, so this sometimes sounds like advance to the rear! The Governator of California recently pointed out that Jimmy Carter was way ahead of his time in encouraging the development of alternate energy sources and then Runny Reagan canceled his projects when oil became plentiful and cheap again. If we had moved ahead under smiley Carter, we would be in a much better position today. Run Barry Run - lets move forward and have a little faith in the ability of the human imagination to resolve the mess in which we find ourselves!

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