Question About "Drill Now"
wesmorgan1
8 Comments
It's a simple question, but one that has basically been left unasked. If we're going to open up our land to private firms, are we going to require them to sell the oil only to the US? I mean, why should we open up our protected land if the oil companies are going to sell the crude oil to China or India, right?
OPEC gains its strength, in large part, from the fact that most of its members have nationalized their oil companies. We certainly don't want to follow THAT path, but my question holds - why should we give breaks to companies that will turn around and sell the resulting oil to our competitors?
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Reader Comments (8)
Since world prices are all interconnected by demand and supply, your point to only sell American oil in the U.S to get a lower price won't work unless the government dictates what oil can sell for. The oil will go into the tabulation of world supply and effect CBOT, London and Dubai trading. Also, with the oil refined in U.S. refineries due to there proximity and lower cost, the end-use carbon products will be used by U.S. consumers.
If that's the case, then I think any new leases should be accompanied by royalties on (eventual) production.
Will individual states modify their laws so that oil companies no longer need to produce numerous different blends?
Zoy;
Energy producers have asked for years to be allowed to make fewer grades. They don't care if it's the most enviromentally stringent, just let us make it and not 99 others. Believe it or not it is over a 100 different grades.
Yeah, that's a piece of the problem that usually goes under the radar. A 2005 GAO report (one-page highlights here) found that, once octane levels and blends were all taken into account, 45 different types of gasoline were produced in the US in 2004.
I have a family member in the refining business (he's a chemical engineer), and he's told me of the work required to shift refineries from one blending process to another. Designing/building/running a refinery around 11 blends/45 types is a bit much.
I'm with you - let's work from the most environmentally friendly (which would probably be California's mandated blend) and go from there.
Just remember, "I'm from the government, and I'm here to help you." [bleachh]
"Pelosi stands firm against drilling"
We'll see for how long.
http://www.iht.com/articles/2008/07/17/america/pelosi.php
Answering Zoy's comment about the lesser cost-effectiveness of oil shale recovery (as compared to conventional drilling) in another thread...
That's right, Zoy. The current oil-shale recovery technique is retorting; the shale is mined, then run through a heating process to liquefy and separate the oil. One can find references to research in "retorting in situ", which would be heating the shale in place and pumping the resulting oil with conventional techniques.
Here's the eye-opening statistic--emphasis added--courtesy of Energy Business Report (this is from the abstract):
I would have few objections to government sponsorship of research into cost-effective oil shale recovery; I'd rather see NSF managing the research than see us giving tax credits to industry for the same thing. (In addition, the information gleaned from NSF research can be equally shared across the private sector through technology transfer, thus leveling the playing field for the industry - not a bad thing...)