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EIA: ANWR Oil Production Would Peak at 780K Barrels per Day
23 May 2008
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| ANWR production would peak in 2028 (ten years after the start of production). Click to enlarge. Source: EIA |
The opening of the Arctic National Wildlife Refuge (ANWR 1002 Area) to oil and natural gas development would result in additional oil production of a peak 780,000 barrels per day in 2027, according to the mean case developed by the Energy Information Administration in a revised assessment of ANWR potential. That would result in trimming $0.75 (in 2006 dollars) off the projected cost of a barrel of oil, according to the EIA.
In an assessment of ANWR four years ago, the EIA concluded that ANWR production would peak, in the mean case scenario, in 2024 at 870,000 barrels of oil per day. (Earlier post.) EIA revised its earlier assessment in response to a request from Alaska Senator Ted Stevens.
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| Opening ANWR would drop US dependence on imported oil in 2030 by 3 percentage points in the mean case—from 54% to 51%. The high and low resource cases project a 2030 oil import dependency of 48% and 52%, respectively. Click to enlarge. Source: EIA |
The new analysis—like the earlier one—assumes production begins 10 years after the opening of the area to development via enabling legislation. The primary constraints to a more rapid development of the ANWR oil resources are the limited weather “windows” for collecting seismic data and drilling wells (a 3-to-4 month winter window) and for ocean barging of heavy infrastructure equipment to the well site (a 2-to-3 month summer window).
The assumed timeline is as follows:
2 to 3 years to obtain leases, including the development of a US Bureau of Land Management (BLM) leasing program, which includes approval of an Environmental Impact Statement, the collection and analysis of seismic data, and the auction and award of leases.
2 to 3 years to drill a single exploratory well. Exploratory wells are slower to drill because geophysical data are collected during drilling, e.g., rock cores and well logs. Typically, Alaska North Slope exploration wells take two full winter seasons to reach the desired depth.
1 to 2 years to develop a production development plan and obtain BLM approval for that plan, if a commercial oil reservoir is discovered. Considerably more time could be required if the discovered oil reservoir is very deep, is filled with heavy oil, or is highly faulted. The petroleum company might have to collect more seismic data or drill delineation wells to confirm that the deposit is commercial.
3 to 4 years to construct the feeder pipelines; to fabricate oil separation and treatment plants, and transport them up from the lower-48 States to the North Slope by ocean barge; construct drilling pads; drill to depth; and complete the wells.
The analysis also assumes sequential development of fields, with new fields in ANWR beginning development 2 years after a prior ANWR field begins oil production. The decision to use a 2-year time lag in bringing ANWR fields into production is driven by four factors, according to the EIA:
The large expected size of the ANWR fields, which complicates the logistical problems associated with their development.
The required considerable investment infrastructure to begin production in these fields and to link these fields to the TransAlaska Pipeline System (TAPS).
Competition in investment and drilling resources from other domestic and foreign projects, which potentially limits the resources available for ANWR development.
Increasing the rate of ANWR development might also require an expansion of TAPS throughput capacity.
In the new low and high ANWR oil resource cases, additional oil production resulting from the opening of ANWR peaks in 2028 (10 years after the beginning of production) at 510,000 and 1.45 million barrels per day, respectively. Between 2018 and 2030, cumulative additional oil production is 2.6 billion barrels for the mean oil resource case, while the low and high resource cases project a cumulative additional oil production of 1.9 and 4.3 billion barrels, respectively.
Crude oil imports are projected to decline by about one barrel for every barrel of ANWR oil production. Opening ANWR results in the lowest oil import dependency levels during the 2022 through 2026 time frame, when oil import dependency falls to the minimum values of 46 and 49% for the high and low oil resource cases, respectively. During that timeframe, the mean resource case and AEO2008 reference case project an average oil import dependency of 48 and 51%, respectively.
Because ANWR oil production is declining after 2028, US oil dependency rises to 51% in 2030 in the mean resource case, compared to 54% in the AEO2008 reference case. The high and low resource cases project a 2030 oil import dependency of 48% and 52%, respectively.
Additional oil production resulting from the opening of ANWR would be only a small portion of total world oil production, and would likely be offset in part by somewhat lower production outside the United States. The opening of ANWR is projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, light crude oil prices of $0.41 per barrel (2006 dollars) in 2026 for the low oil resource case, $0.75 per barrel in 2025 for the mean oil resource case, and $1.44 per barrel in 2027 for the high oil resource case, relative to the reference case.
The EIA projects world oil consumption will be 117.6 millions barrels per day in 2030.
The steady rise in oil prices has re-energized efforts in Congress to open domestic oil and gas resources for exploration and production. Among the legislation proposed is a bill co-sponsored by Representative Roscoe Bartlett (R-MD), who had formerly opposed opening ANWR for exploration.
The American Energy Independence and Price Reduction Act (H.R. 6107), introduced by Rep. Bartlett and Rep. Don Young (R-Alaska), would use revenues from the ANWR leases to fund a variety of alternative and renewable energy programs. The bill assumes production will come online in 5 years.
I have resisted drilling in ANWR because I believe that these oil reserves are like money in the bank that is yielding huge interest rates. I don’t think you ought to rush to the bank and pull it out and spend it. Today, with oil at $134 per barrel, there is obviously no surplus energy or capital to invest in alternatives. I am joining as an original cosponsor of this new bill because it dedicates the entire federal share of revenues from ANWR to increase federal investments in the research, development and production of cleaner domestic, alternative and renewable sources of energy, energy efficiency and conservation.
Of course, it is impossible to drill without some environmental impact. However, I have been to ANWR. I am convinced that the environmental impact will be minimal.
—Rep. Bartlett
Bartlett has been a consistent voice in the House about the issue of Peak Oil.
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Comments
now the time has run out and we have to start a crash drilling program.. the environment will recover,hopefully... nature can deal with spilled oil and a few dead caribou.
We have to get to that oil before it is worthless
Posted by: Herm | May 23, 2008 1:34:37 PM
We should've opened it ten years ago, when we could've been much more careful. In a peak oil situation I wonder if even a Democratic President would even approve a crash drilling program?
Posted by: Cervus | May 23, 2008 1:48:23 PM
What I don't understand is how this little amount of oil is supposed to help solve or even reduce the impact of the high price of oil due to increased demand. The article indicates that the price of a barrel of oil would drop by $0.75 per barrel. With oil prices going up $2 - 3 per day, who would even notice this drop.
What does this extra supply really do in terms of making gas cheaper? Nothing.
When will it start to help? Ten years from now.
Who would profit from it? The oil companies who are earning record profits.
Who will lose? The people of the US that live in Alaska and all of the animals that depend on those lost as part of the food chain.
More toxic waste to clean up, and more wildlife lost in a very clean area.
Posted by: jrojai | May 23, 2008 1:51:05 PM
oil supply is very inelastic, you cant store many barrels of it economically so even this little amount will help tremendously.. just may be enough to tide us over to full electrification of vehicles.. plus with a crash program (without worrying about the environment) they may be able to increase production.
Per T boone Pickens, there is a world shortage of about 2 million barrels per day (production 85m barrels vs comsumption of 87m barrels daily).. and that accounts for the massive price increases.. this area alone may take care of half of that, so a massive impact.. way more than $0.75 a barrel
Posted by: Herm | May 23, 2008 3:01:30 PM
jrojai - nice feelings, but you really need to join us in reality.
The chance that something harmful might possibly happen is so small that it is statistically nill. If by some stroke of the worst kind of luck something did go wrong, the area affected would be equivalent to the size of a postage stamp in a region the size of a football field. Less than 1/2 of 1% of the wildlife reserve is considered viable for drilling.
Why this is even an issue, defies common sense.
Posted by: Joseph | May 23, 2008 3:02:19 PM
Herm:
Pickens may or may not be right. The Iranians are storing over 20 million barrels of crude they can't sell on supertankers, just like they did in 2006. And prices are in contango--spot prices are less than futures.
That said, I think it's neither one nor the other. Supplies are very tight, but there is a vast amount of speculation going on here due to unregulated electronic exchanges.
Posted by: Cervus | May 23, 2008 3:06:36 PM
Why do we need to start a crash drilling program? Oil is approaching its true value, but we are not there yet. Let it rise and we will learn to adapt. Adaptation is already happening.
There are more intelligent ways to attack high oil prices - like learning how to use less. There are many ways to use less right now that would have a greater impact than drilling for more. Many methods don't even depend on technology. For example, transportation fuel consumption can be significantly reduced if folks would buy more appropriate vehicles and drive smarter. A federal 55mph speed limit could have a greater impact on oil prices and cost to the consumer than opening ANWR (could boost vehicle fuel economy up to 20%).
ANWR will not help us in the short or long term. ANWR is too little, too late. With regard to developing renewable energy feedstocks, is the U.S. not spending more on subsidizing oil and coal than subsidizing renewable energy systems?
Posted by: Relocalize | May 23, 2008 3:37:44 PM
At today's price, that's $35 Billion/year that would stay here instead of going to the Arabs. At the 2027 price, I can't imagine.
Drill now.
Posted by: | May 23, 2008 4:07:35 PM
"Drill now."
Why not buy a more fuel efficient car now?
Posted by: | May 23, 2008 4:22:57 PM
It may be too little too late. What impact will a 3% to 4% decrease in Oil imports (due to ANWR) realy have on trade deficit and GHG?
A much greater (triple) impact can be obtained by reducing yearly consumption (oil import and GHG) by 4% for the next 15 years, i.e. for a total potential reduction of 60%.
This reduction can be easily realized by agressively switching to smaller more efficient Hybrids, PHEVs and BEVs at the rate of 4% per year. Within 15 years, 60% of all vehicles would be hybrids-PHEVs-BEVs and that would have a much greater longer lasting impact than 3 to 5 ANWR.
Americans have a choice to make, the wiser option is to reduce OIL consumption (oil import and GHG) not to maintain or increase it.
Posted by: Harvey D | May 23, 2008 4:25:55 PM
This is complete BS:
You simply cannot make that kind of forecast until after extensive seismic and test drilling is conducted. Complete speculation under the title of an official report.
(I'm neutral on drilling ANWR, but I have to call out bad science)
Posted by: Mike Z. | May 23, 2008 4:36:54 PM
Harvey D: "the wiser option is to reduce OIL consumption (oil import and GHG) not to maintain or increase it."
Every dollar sent to the oil companies is a dollar wasted looking for ever smaller, completely insignificant, puddles of the stuff, ripping the Earth asunder trying to shake oil from tar sands, and generally maintaining a business model that truly needs to die an immensely painful death.
Every gallon of gas not burned by using a more fuel efficient car is a gallon of gas that can be used to bring food to your table, HDTV monitors to your living room, and dispatch the ambulance when your kid goes into anaphylactic shock.
The phrase of the week was "demand destruction." Bring it on!
Posted by: | May 23, 2008 4:38:24 PM
Harvey:
The way gas prices are going, you don't need to mandate any MPG increases. Just sit back and watch $4 gas do its thing. SUV sales have completely collapsed. And I fear my co-worker waited too long to sell his Toyota Tundra. I was helping him find bus routes to work the other day.
In the end, you have to look at both conservation and the supply side of the equation. If we stop drilling completely it'll make the peak oil downslope much, much worse.
Posted by: Cervus | May 23, 2008 4:45:02 PM
I was privileged to fly, in a bush plane,into ANWR last August, and camp/backpack for 10 days. It was and is unique, gorgeous, and very delicate, with a 4 month growing season at best.We even were fortunate enough to see a muskox! Now, in my book, keeping most,if not all,of the remaining fragile and unique places on this planet should be a priority. Talk to me about developing it after everyone in the US gets out of their huge SUV's and trucks for grocercy erands, 2 person 3-6000sq foot homes,and other wasteful habits!
And really, if,(and I for one think this is true) we are running out of oil, then keep some in reserve, and don't squander it now!
Posted by: Richard Burton | May 23, 2008 5:22:10 PM
Cervus:
Oil contango will not last long: oil storing capacity is very limited. 20-30$ per barrel added by speculators will inevitably burst, and I suspect that pension mutual funds foolishly entering en masse oil games will foot the bill.
Posted by: Andrey Levin | May 23, 2008 5:24:06 PM
US is addicted to oil and drilling in the ANWR is like giving the last shot to a drug addict before he collapses. Not sure that this last shot will come in time by the way, 10 years from now the price of gas might be so high that everybody would have shifted to electric or biking or biofuels.
Anyway this drilling shouldn't be allowed until serious measures of energy conservation has been undertaken. 10 billion of barrels of oil is just 16 months of US consumption at current rate.
Posted by: Treehugger | May 23, 2008 5:49:31 PM
Yep... Here it comes. The power mongers who have to have it their way and on their timetable have pushed the button on re-addiction. Or, perhaps more correctly, have SLOWED the transition to renewables and endangered sensitive habitat by hyping (aka exaggerating) oil pricing. This is the result of GREED - not necessarily monetary GREED - just plain ol' power monger GREED.
As unrealistic oil prices put more and more small-medium businesses out of business and cost the Pentagon $$unds allocated for shiny weapons programs, the hew and cry will be national security *not* emergency. Congress attempting to quiet the screaming will pass a fast patchwork of drill, explore and refine packages with the stipulation that recovered oil pricing be "capped." To make it all look handsome they throw the Fed portion of revenues into the green kitty... Sorta like what's happening now:
"(H.R. 6107), introduced by Rep. Bartlett and Rep. Don Young (R-Alaska), would use revenues from the ANWR leases to fund a variety of alternative and renewable energy programs. The bill assumes production will come online in 5 years."
All the result of GREED driven (not $$-driven) power brokers trying to get their way not matter what it takes. Remember, whole war efforts have been predicated on far less than predatory power grabs (e.g. Gulf of Tonkin.)
Posted by: Sulleny | May 23, 2008 6:28:07 PM
People:
Come to your senses. You are being manipulated by the oil companies by outrageous prices into illogical actions. Oil is a toxic substance that is better sequestered in the earth rather that brought up to the surface to continue poisoning our atmosphere, and killing off the animals and your families.
Take the money and bring solar power and electric cars to resolution instead of continuing to burn toxic chemicals in ineffecient internal combustion engines.
Posted by: Lad | May 23, 2008 6:55:24 PM
Opening the Arctic to oil production would be a criminal assault on that fragile environment.
Worse, the gains are fiction and imaginary. Chunking more oil onto the world market just increases global warming and delays the switch to sustainable environmentally friendly alternatives.
Who does it help? A few oil investors, and a lot of SUV drivers.
There is an obvious better alternative. Take the money needed and promised to develop arctic oil, and instead invest it in solar or wind or geothermal projects, ... the payoff is greater, the energy delivered is greater, and the power supplied is sustainable.
Watch who supports this bill and vote them out of office for being greed driven idiots pandering to oil interests. We need to look after the best interests of the country, the people, the wildlife, and the world that sustains us.
Posted by: John Taylor | May 23, 2008 7:27:23 PM
Doubt the oil barons really give damn that their GREED is endangering the sustainable movement? They don't. They just want to have things their way when and where THEY say. Because THEY know better than us. And THEY want everyone to jump when THEY raise prices. Because they are unremittingly driven by GREED for power and control.
Thanks oil barons for the education.
Posted by: Sulleny | May 23, 2008 8:12:43 PM
Best thing to do:
Convert at least one of your vehicles to CNG and use
MyPhill at home to tank up ...or
E-Fuel-100. A home ethanol brewing unit that you can
purchase for around $9,000. They also have an ethanol
conversion kit for your gasoline guzzler.
Get a hybrid, or get on the electric car bandwagon for
2010.
Good luck.
Posted by: swen | May 23, 2008 8:35:19 PM
Frankly, greed can be a good thing. You'll get more investment flooding into sustainable energy tech if the venture capitalists know they can make a lot of money doing it. Look at T Boone Pickens, who wants to build the largest windfarm in the world, in Texas. And he talks about a huge solar corridor from Texas to California. He thinks he can make a lot of money with this project, and wouldn't be doing it otherwise.
And Pickens is an oilman. Hmm.
Posted by: Cervus | May 23, 2008 8:44:32 PM
While anwr by itself will only do so much anwr plus east and west coast plus ctl plus oil shale will combined with h2 bio bev and downsizing to get us along to the point all the new techs can take over.
The real point of anwr tho is not the us its the smaller nations who will have to fall because they cant outbid anyone else for oil and that little trickle is the difference between making it to 2949 and going down in flames before 2020.
And no it wont destroy anwr.
Why must we spend billions on bio and bev AND fc and ctl and gtl and dinisg pianis to liquids... because bev soon means several small nations continue to eat 10 years from now.. h2 soon means many small nations continue to eat 20 years from now.
Every barrel we dont replace or displace or negate the need of is a dead child. And no its not good enough to just do some things and not others because no matter what there will be dead children.
Posted by: | May 23, 2008 10:35:43 PM
DOH! Us eggheads overreacted and made things worse!
Posted by: DOH! | May 23, 2008 10:57:53 PM
And as if we really need to be told about the largest petroleum find in North America, now we have this to contend with:
http://www.energyandcapital.com/aqx_p/4211?gclid=CKzJnre7vpMCFR4sagodyGPuCA
Unfortunately, a little foresight would have seen this kind of blowback coming.
Posted by: gr | May 23, 2008 11:09:28 PM
And this from Canada -
http://www.petrobank.com/can-bakken.html
Posted by: al bertagor | May 23, 2008 11:18:29 PM
Honda Fit
Toyota Yaris
...
Volkswagen Jetta TD
...
Prius
Bike }
Bus } when appropriate
There are loads of solutions available right now, if people would just use them.
You do not need to wait for PHEVs or EVs to solve the problem.
Just get a smaller car and/or drive less.
As people have said $4 gas will bring this on (as it has in Europe and Japan).
If people really want to look down on other road users, I'm sure you could create a roof mounted sight like a gunship helicopter and mount it on your Fit.
It would be easier on the environment than buying a SUV.
And if you really need a SUV for a job - borrow your neighbor's, which he probably won't be using very much.
Posted by: mahonj | May 24, 2008 12:08:52 AM
All this talk of openning ANWR and other site for drilling is just plain silly. There is little oil there compared to our usage. The only group this helps is the oil industry. We will still have high oil prices. If we open these site up, then the US will have no oil reserves at all in fifty years.
Posted by: VaPrius | May 24, 2008 5:19:04 AM
It doesn't matter if ANWR peaks out at 780,000 bpd. That's about all we have room for in the Alaska pipeline anyway. Right now the pipeline is about 60% utilized. We couldn't transport more than this anyway.
We really need to start producing more oil from our coastlines. The oil companies are only allowed to drill off the coast of Texas and Louisiana. Who knows how much oil we have on the Continental Shelf. China is drilling for oil off the coast of Florida but we aren't. Does this make any sense? We are the only country in the world that doesn't develope its own resources.
We need to make a strong commitment to stop using oil. But in the meantime we need to produce all the oil we can from our own country. We need leadership from Congress and the President. We need compromise. New technology is coming but in the meantime we need oil!
Posted by: d burgdorff | May 24, 2008 7:17:25 AM
Here is the meager action your Congress makes:
"“NOPEC” — is a meaningless gesture whose symbolism is intended to mollify angry motorists as gasoline prices approach $4 per gallon. Even though Democrats are intentionally keeping those prices high for environmentalist reasons, they have passed this bill as their way of shaking a stick at the Organization of Petroleum Exporting Countries (OPEC), the international cartel whose supply decisions have enormous and dangerous influence on the price of oil.
The NOPEC bill’s relevant language reads as follows:
"It shall be illegal and a violation of this Act . . . to limit the production or distribution of oil, natural gas, or any other petroleum product . . . or to otherwise take any action in restraint of trade for oil, natural gas, or any petroleum product when such action, combination, or collective action has a direct, substantial, and reasonably foreseeable effect on the market, supply, price, or distribution of oil, natural gas, or other petroleum product in the United States."
This is designed to make OPEC’s activities illegal. But here’s the problem: All that talk about “limiting the production of oil” could apply to Congress just as much it does to OPEC. Thomas Pyle, president of the Institute for Energy Research, comments:
"The Congress itself is guilty of committing the crimes outlined in this legislation. In fact, it is a repeat offender. The only difference between the Congress and OPEC in this regard is that OPEC is willing to produce oil for its citizens and its economies. The U.S. Congress, unfortunately, is not."
Posted by: oleshiek | May 24, 2008 9:18:38 AM
Now the firestorm has begun and the little people are gonna pay.
"For many years, the prospect of ANWR has been considered and investigated by countless government agencies in preparation for the "thumbs up" from Washington. Though it has never been fully given, Congress and the White House have constantly been pushing the possibility for action. It is only a matter of time before permission is granted to tap this valuable resource."
University of Minnesota, Minnesota Daily
http://www.mndaily.com/articles/2008/05/05/72167068
Posted by: tanksarot | May 24, 2008 9:37:17 AM
Came across some interesting data today:
The FHWA’s “Traffic Volume Trends” report, produced monthly since 1942, shows that estimated vehicle miles traveled (VMT) on all U.S. public roads for March 2008 fell 4.3 percent as compared with March 2007 travel. This is the first time estimated March travel on public roads fell since 1979. At 11 billion miles less in March 2008 than in the previous March, this is the sharpest yearly drop for any month in FHWA history.
So, we are responding to high gas prices, and this is before the current price spike. Heard on Bloomberg last week Mastercard said the demand drop was 7%.
Posted by: Cervus | May 24, 2008 10:05:31 PM
If most of us buy the most fuel efficient car or truck available then we wouldn't need to drill for oil in ANWR or depend on foreign oil for that matter. It doesn't have to be a hybrid, just any car capable of doing over 35MPG would help decrease our dependence on foreign oil.
Posted by: Gerald Shields | May 24, 2008 11:10:32 PM
In order to do our share we need to both try hard to invest in better cars and trucks AND get our remaining oil reposits online so as to cushion the blow for the developing world. Our arse is not enough we need that oil more for total world supply then just our own as either way we will consume about the same amount and thus without anwr we will take all that oil from someone else who cant outbid anyone else. It may be little to you but its the total oil needs of ALOT of people and it will decide when the iuk runs our over there.
Posted by: wintermane | May 25, 2008 2:19:58 AM
Sure. Go out and BUY a new car. With what money? I'm a carpenter trying to make ends meet in a construction meltdown. I got two kids to feed, a wife and now my transportation costs have doubled in 18 months! I can't sell the Ram because 1) I need it for work, 2) can't get more than a couple thousand for it. Can't buy a new truck because my credit is already stretched, and these fancy new trucks you guys want me to buy cost a fortune. And why? So you all can have less pollution?
You're making enemies of the working man with your smug "ride a bus" advice and it's going to bite you in the as*!
Posted by: broke | May 25, 2008 7:00:38 AM
Has anybody mentioned the four-ten-hour-work-day? Adapting rail lines with high density residential areas and relaxation of zoning laws to permit mixed busines and residential areas-anybody remember when grocers and bakers would live in apartments above their businesses?"
Posted by: ken | May 25, 2008 7:27:21 AM
"and these fancy new trucks you guys want me to buy cost a fortune. And why? So you all can have less pollution?"
No, so that people such as yourself will use less oil and we'll all have less of a gas cost problem. I agree though that many people such as yourself are now between a rock and a hard place. Still there are a lot of people that have seen this coming for a long time and gotten a pretty raw deal from trying to convince others that gas guzzlers are a bad thing. For instance were you for or against raising gas taxes a few years back or raising CAFE standards? Doing these things 5-10 years ago would have meant a lot less pain now. The majority of Americans are experiencing the fruits of their aversion to government regulation and perhaps it may be a worthwhile although painful lesson.
Posted by: | May 25, 2008 9:42:37 AM
broke: I know the stress of trying to support a family in hard times. I also know a carpenter that works out of a used civic hatchback with three of the seats ripped out and a roof rack on the top. It's amazing how much he can stuff into that car. The only problem he has is the number of sheets of plywood he can get on top at any one time. If it's more than he can handle then he has it delivered or makes a couple of trips.
Posted by: Neil | May 25, 2008 9:56:18 AM
I would like to take back the comment "worthwhile although painful lesson". I wouldn't wish this lesson on anybody. It just irks me that many of the people complaining now I bet would never have voted for energy taxes or other conservation measures when it mattered.
Posted by: | May 25, 2008 10:07:47 AM
“I was privileged to fly, in a bush plane,into ANWR”
“2 person 3-6000sq foot homes,and other wasteful habits!”
One of the universal traits of environmental crackpots is that the are people of privilege telling people of privilege how to live.
Broke, I noticed when I was building my 3000sq foot home that my subcontractor all drove 2wd trucks. When you went down into the city where it did not snow the number of 4wd increased. So the privileged could go skiing.
We can afford bigger houses than the GI-bill Cape Cods our parents built because carpenters are more productive using power tools and modern houses use much less energy. The apartment that I lived when I was in the navy starting a family used more energy than any of the houses that I have been fortunate to live in since.
The way we produce energy has much lower environment impact too. While I am pretty sure Richard Burton can not figure out how to produce the things that our society needs and protect the environment at the same time, us greedy doers can figure it out.
Good luck surviving the housing down turns, broke. At least you have a skill that is needed in the long term. Maybe building energy infrastructure.
Posted by: Kit P | May 25, 2008 10:21:11 AM
Ta a whole slew of house flippers and such got nailed here and blew the housing market to bits.. Still a ton of money around but people are bunkering up now and finding safe places to weather the storm.
Posted by: wintermane | May 25, 2008 11:16:40 AM
@ joseph
well said, and that also explains very well why common sense kills
Posted by: socrates | May 25, 2008 11:33:54 AM
Broke,
I hear Houston is booming. You may try down that way for summer contract work. All my friends in any kind of construction, often had to travel to hot spots. Sometimes the family went, sometimes not. Depended upon time of year. And you may get a good trade in for another truck there as well. Big ranches still need big trucks. Don't forget large companies need people with your skills as well if you want a more stable environment. Someone they can trust to keep outside contractors honest.
I hope the best for you and your family.
Posted by: Michael | May 25, 2008 9:12:15 PM
Some oil facts... transport considerations,
This problem is multi-faceted and shared by all. No one side is to blame. There are over 200 million cars in America. China and India are the the fastest developing transport sector today. This is the cause of price increase. As these countries of a billion each come online to modern world standards so to does energy cost increase for oil. Russia itself has seen double-digit increase as women never drove in the past are now buying cars. Places like St. Pete are a mess daily with massive traffic jams on roads never intended for so many cars. This is the cause. Three countries representing 1/3 of world population coming online to live as modern as the West.
Russia has no incentive to decrease the price of oil as this is their only true industry of any notable size besides other mineral based commodities. Putin used it as a tool cutting off supplies at one time which threatened Europe. It is still one of the most corrupt societies in the world. It renationalized all oil property which is now run by Putin's old friends, many from KGB days. He's loving all of this and has now situated himself as the defacto leader, with a figure head as President.
Fortunately, China and India have great incentive. These nations have many companies already involved in free market working with the West. Large deals are online for battery and solar power. With many more factories scheduled.
Oil drilling is restricted in this nation since the 70s. It forces American oil companies abroad into other countries, many hostile or dangerous that adds to the chaotic atmosphere of futures prices.
Our largest company, Exxon-Mobil is only 14th in the world. It must import 90% of its oil from countries like Nigeria, Saudi, Russia. It has no choice. The largest companies are nationalized and mainly Middle East nations, with Russia and Venezuela in the mix. China and India subsidize gas prices so there is no incentive for drivers in those nations to save. Russia does as well.
List of Top 15 oil/gas companies in the world:
Iran (NIOC)
Saudi (Arammco)
Russia (Gazprom)
Qatar
UAE
Iraq
Kuwait
Venezuela(falling fast)
Nigeria
Libya
Algeria
Russia (Roseneft)
Malaysia
Exxon Mobil 14th
PetroChina
94% of the worlds current oil supply is locked up by foreign governments.
Source of oil/gas: Credit Suisse Bank
report by powerline
graph: http://www.powerlineblog.com/OilChart9.php
If you look at the size of Exxon-Mobil in comparison for reserves on hand, it is easy to see our problem of supply and demand is easily influenced by foreign hands.
Hope this helps to see some of the reasons we suffer supply and high price problems today. As someone said, China drills not more than 75 miles off our coast. Who will we trust to keep our oceans safe? China? Or an American company with oversight from EPA and ENV orgs like Sierra Club?
Posted by: | May 25, 2008 9:32:52 PM
An interesting exercise. The effect of manipulated rise in oil singles out the population that gets hurt the most - small business. Since U.S. economy continues to support a large base of sole proprietorships and small business - there will be many families like broke's. A vast number of workers live from paycheck to paycheck without cash to buy new, pricey vehicles.
In the meantime the government, reluctant to put domestic energy policy in place years ago, will now be forced to approve new drilling. Clearly it is a knee jerk reaction which will have marginal effect outside of allowing government to claim they are reacting. But the ANWR habitat will suffer because of it. And resources best left in the ground will be exploited. And renewable investment will decline as speculators defer to oil again.
Had the oil sheiks and manipulators not forced prices so high so fast, our transition to alternative energy would have continued on a reasonable time line. But the manipulators are impatient to get what they want - the last oil dollars before the collapse. Over-action begets the same. Unfortunately not only does small business get hurt - the environment does too.
Posted by: gr | May 26, 2008 6:33:28 AM
Oil independance is at least three/four decades away, if at all, so lets drill and stop the madness.
Posted by: shigley | May 26, 2008 3:29:08 PM
The sooner we drill the safer the drilling will be. I do not wana even think how it would go if we had a total econ meltdown and it became a national defense matter.
That is what will happen sooner or later folks.
Posted by: wintermane | May 26, 2008 6:45:59 PM
broke: you're in a tight spot, all right. Part of the problem was that 20 years ago, you and folks with 8 dogs and 12 kids were the only people driving trucks and suburbans. That was before the car companies realized they could make huge profits if they could get around CAFE and build cheap low-tech trucks if only they could get everybody to buy them. Hence the marketing campaign that convinced people that huge SUVs (that were cheap to make) were somehow more valuable and safer (they never were, only more dangerous for everyone else) and that that is what the public really wanted. And people somehow bought that load of BS. NOW we are no closer to using less oil and there's a glut of big trucks and SUVs on the market that far exceeds demand for the people that actually always did need them.
The truth is we are not going to drill our way to lower prices. Didn't happen in the 70's. The prices of everything else just went up to match. Took awhile, too. Going to happen again, as well. Only way off the oil dependency roller coaster is with electric drivetrains. Hopefully we won't forget that once the inflation of everything else has washed out the memory of the oil price jump that started it.
Posted by: DaveP | May 27, 2008 5:09:55 PM
Things can change in a hurry in the oil business. Iraq was only allowed to produce 2.5 million barrels per day under the United Nations "oil for food" program. Despite overthrowing Saddom Husein and having the sanctions lifted, the continuing violence has prevented any increase in production. With Iraq's known reserves they could easily produce enough oil to take care of world demand for many years to come. Is it any wonder that oil rich countries like Iran and Saudi Arabia fund insurgents?
Posted by: d burgdorff | May 27, 2008 7:03:33 PM
SUVs were never cheaper to make, all cars pretty much cost the same to make within a few hundred $$ of each other.. but they could be sold at a much higher profit since people expected larger cars to be worth more.. of course gas was $1 a gallon back in 1990. Ford and GM desperately need the high profit items to pay union wages and benefits..
Posted by: Herm | May 28, 2008 7:14:18 AM
I live less than 2 miles from a working oil well. There are a lot of panic-filled wive's tales written here about what happens to the environment when oil is pumped from the ground. Use logic people! Big Bad Oil doesn't want to spill something they are going thousands of miles to drill miles under the surface of the earth to get. They sell oil for a profit and get fined for any mess.
Cervus summed up the typical Environmentalist delusion in his post and repeated by many others- He admonishes everyone to use less oil, drive less etc etc in the same paragraph about FLYING TO A WILDERNESS TO SIGHTSEE!
How about we in Texas keep our SUVs, pickups and OUR OIL. You left-leaning left-coasters can hug trees and push your cars around till you figure out that the rest of the country is tired of paying for your environmental legislation. You might even drill in your own states too. You think I'm joking? Wait till gas gets to be $10+ a gallon and people remember how you libs forced this country into the mess by stopping oil exploration. Bush's energy plan had Alternative Energy tax breaks that would have had BILLIONS of $$ in wind and solar power easing the demand on oil as these oil fields came on line. Good Job Liberals! You sure showed Bush- and every American that uses gasoline! I guess you environmentalists never thought about the consequences of slowing supply while demand goes up. Your about to get a lesson in capitalism. We Texans have oil. Do YOU?
Posted by: Texan | May 29, 2008 2:21:57 AM
Texan: He admonishes everyone to use less oil, drive less etc etc in the same paragraph about FLYING TO A WILDERNESS TO SIGHTSEE!
Aviation is a surprisingly small portion of the total oil consumed.
http://peakoildebunked.blogspot.com/2008/01/326-detailed-breakdown-of-us-petroleum.html
Looking at that table, I guess we would have to fly about 5x as much as we do to roughly equal the oil use by cars.
So, yeah, driving a lot less is a good idea. Begin with the commute (where the bulk of the oil use in cars goes). Attack the biggest problems head-on, and you'll get the biggest results.
"I guess you environmentalists never thought about the consequences of slowing supply while demand goes up."
You could put pumps on an even 1 kilometer grid over the entire United States -- lower 48, Alaska, and Hawaii -- and you would still not be able to cover your demand.
Even if all these pumps magically appeared tomorrow morning.
I like SUV's too, but when physical reality says it's time to change, then it's time to change. "Invest in the future you want". Mine includes electrified cars, nuclear power, wind power, solar power, anything except fossil-fuel power. Sharp CO2 production dropoffs -- hopefully negative production!
The alternative is most unpleasant indeed. Thankfully, it is entirely avoidable too.
But if Texas wants to be a living museum of 19th century transportation technology, who are we to argue with them? As the signs say, "Don't mess with Texas".
Posted by: mdf | May 29, 2008 6:08:47 AM
Broke's gas cost is only part of the equation that will bury him and millions just like him in this country. The fact is that when you make it more expensive to move things around then EVERYTHING gets more expensive. This won't effect the rich elite.
Broke is immediately feeling increased gas prices putting a crimp on his ability to provide for his family, and in a short time he will start noticing that everything else costs more too. We are effectively giving many of the americans who can least afford it a very unwelcome pay cut.
Our policies of allowing foreign nations to define the cost of goods vital for transportation has come home to roost.
Posted by: poor tax | Jun 2, 2008 5:50:16 PM
1. "The problem is that back when oil was ..." Does it matter? Are we supposed to go back in time and make everyone buy Falcons, Fiestas and Vegas (even though gas was cheap)?
2. "Don't get more oil, use less. If everyone just...". If If If. They won't, so let it go. Go back to dreaming how we should have never created the SUV.
Of all the reasons oil prices are climbing (speculation, hoarding ..) drilling in the badlands of ANWAR will help, as will drilling along the coasts. We need to do all these, drilling, conservation, expensive hybrids and expensive shale oil etc. America might weather this crisis until solar etc takes over. Saying conserve can do better and then doing nothing else is not the answer.
Posted by: ToppaTom | Jun 13, 2008 12:43:22 PM
Check out the Energy Information Administration's findings on drilling in the OCS:
http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html
It would only bring in 200,000 barrels a day (1 percent of current consumption, and consumption is still rising!), and that in 2030! Drilling is a panacea. What we need to do in the short term is conserve. Raise fuel-efficiency standards to global levels, provide low-interest loans to retrofit homes and businesses with energy-saving insulation, appliances, heat pumps, solar and on-demand water heaters, maintain current solar tax credits, etc.
Then the alternative technologies instantly become more competitive because we would have decreased our consumption.
We cannot go on like this. Extract, consume, discard, as if there were no limits. If current conditions are not enough to convince us we need to change our ways, what will?
Using less is the easiest, safest, cheapest, most feasible, way to solve the energy crisis.
Posted by: Rob Field | Jul 8, 2008 9:32:39 AM
The ANWR drilling area is just small portion of the total refuge. The rest will be totally undisturbed. Only the mosquito-infested marsh is where the drilling will be. Plus, technology is much more advanced than when the Alaskan pipeline went in and that has been fine. All you enviro wackos need to take your own medicine and quite using ANY oil or plastic and shut up.
Posted by: john | Aug 19, 2008 8:06:49 AM
