Posted by EnKiKur (anonymous) on July 16, 2008 at 9:34 a.m. (Suggest removal)

Oil and gas prices are at record levels in large part because the dollar is at record lows. We aren't doing anything to fix that problem either, in fact we are doing everything we can to make it worse.

Bailing out Fannie Mae, Freddie Mac, IndyMac, Bear-Sterns and others only adds to our inflation problems created through Congress', with consitutent support, spending money on every debt producing project conceivable.

The problem is our monetary system and Congress' use of it. While most people understand that it is wrong to counterfeit money most people cannot understand or accept that the Federal Reserve is in fact engaged in counterfeiting money. What else can one call creating money out of thin air? For everyone but the Federal Reserve that is a crime.

It is also a crime the American people must pay for. We didn't commit the crime, but we are held liable for the damages.

Aaron Burr put an end to one central banker; Andrew Jackson killed the whole bank. Now the bank is killing us.

Posted by bellesouth (anonymous) on July 16, 2008 at 10:14 a.m. (Suggest removal)

Hey, we don't need to open up more drilling. In fact, we don't drill where we are already allowed, so why open up more places for drilling?

Posted by Yeahuhuh (anonymous) on July 16, 2008 at 10:29 a.m. (Suggest removal)

I swear you guys lack insight for folks that constantly deal with the news.

EnKik is right about one aspect of why oil is strangling us -- arbitrary "expedient" decisions about how to give folks a short fix in monetary policy. But your editorial misses the mark in other important ways.

Do you actually believe not a single drop of oil was spilled into the Gulf during Katrina? Or that the oil industry in the Gulf has had no environmental effect on the Louisiana coast?

Drilling the undrilled areas of the continental shelf is something that will happen in good time. When the oil there is produced -- a natural heritage possession of the citizens of the US -- it will be sold back to us at world prices. Let's wait until a time when oil is not so desperately sought after but still valuable. There is also considerable evidence that not enough oil will be produced there in the strategic future to break our present foreign oil dependency. It will be too little too late. We stand to invent ourselves out of dependency with alternatives sooner.

The decision not to drill the shelf is not puritanical. It is practical. Your not-so-veiled accusation that no motives exist aside from puritanical and out of touch environmental concerns is disingenuous. Is your position a pander to the uninformed among your readers? Or do you really not realize that the forces that stop drilling actually know more about the situation than the editorial board?

The reason the president wants the shelf opened up is that oil companies acquire these rights for drilling at lower up front costs than they do onshore reserves. Just the anticipation of the access causes oil stocks to increase in value among the companies that stand to exploit these areas. That by itself -- to oil interests -- justifies the crusade to open these areas to production. Folks like you to parrot the reasons are great -- any reason -- true, wise, or not to give them rights is fine with them.

But ask yourself -- if you had a well you could pump today at $140 or you could pump next week at 50% more money, when would you pump? Wouldn't you INSIST that someone give you a better lease because of a shortage, or national security, or because liberals are tree-hugging idiots, or any reasons anyone would believe? Then you would pump when it was most profitable.

Posted by Yeahuhuh (anonymous) on July 16, 2008 at 10:38 a.m. (Suggest removal)

A further glimpse at reality the way it works...

A natural gas field was recently developed in NW Louisiana -- the Haynesville Shale -- that is reportedly the 4th largest in the world. Mineral rights there presently cost oil companies nearly $30,000 per acre -- and drilling companies there claim there are thousands of wells to be drilled there with nearly 100% completion expected due to the unique nature of shale deposits. 10 million cubic feet of gas per day and up, per well, everyone makes money.

Companies developing this shale stand to make billions, shared with landowners. Companies that develop the shelf do not have those high per acre costs. It should be no wonder why they want to drill the shelf when the onshore prospects exist but sharing the profits with other Americans comes on terms not so much to their liking. It's just business.

To the south of Natchez the Tuscaloosa Marine Shale contains a 100+ ft thick oil saturated layer that underlies 4 parishes and more than 2 counties. The deposit contains billions of barrels of oil and the discovery wells and modern technology to produce it are on line now, yet there is a delay.

The shale prospect south of here is being developed in slow motion so that developers can keep their lease price to landowners as low as possible, and amass tremendous acreage at low cost. And they are being successful at doing that, one company having secured 200,000 acres of leases at annual prices to landowners almost lower than a hunting lease. THAT is the way the industry works. This company with acquired portfolio then announces they wish to sell the company for a profit -- much to the dismay of their investors. Meanwhile understandable industry secrecy keeps the public knowledge low, lease prices as low as possible, and eventual profits for developers as high as possible -- while you are jumping up and down about the continental shelf, they stall development for their own business purposes. They can't be expected to do otherwise if allowed, as they are in this for a profit. You, however, might inform folks about the developments instead of entering the national policy debate before you even report on activities closer to home.

You guys would do much better to report about energy than to opine on policy. C'mon guys.

Posted by EnKiKur (anonymous) on July 16, 2008 at 10:48 a.m. (Suggest removal)

Thanks for that info Yeahuhuh. I recently heard about some agitation over in Texas from leaseholders who are complaining that their producing but capped wells can't be brought online due to lack of refining capacity.

And we have a new foreign friend, Kazakhstan, who has 123 billion barrels of oil just waiting for us. Dick Cheney has been to visit, and Haliburton has a presence in the country.

I wouldn't expect any American production to begin any time soon.

Posted by EnKiKur (anonymous) on July 16, 2008 at 10:53 a.m. (Suggest removal)

The Democrat's job is to endorse national policy Yeahuhuh.
That includes not inquiring too closely into anything.

Posted by Bobaloo (anonymous) on July 16, 2008 at 12:19 p.m. (Suggest removal)

more refineries

Posted by 77shovel (anonymous) on July 16, 2008 at 12:25 p.m. (Suggest removal)

While I agree with a small part of the comments written above, some of them are ludicrous. From someone that does work for "Big Oil" in the Gulf and has for over 25 years, it is amazing how little people know about the real world out there and just who it is that benefits the most. Why are oil prices so high? It is very simple. The entity that gains the most from high oil prices without investing anything into the process is the federal government. You never hear that mentioned. The federal government accumulates royalties on every bit of oil and gas produced in OCS waters (Outer Continental Shelf), as well as all federal lands. Higher oil prices means more revenue. The federal government bids leases in the Gulf for mostly 10 year periods. If not producing,they go back to the government. Those leases are carried out by blind auctions. Why? To maximize profits for the government. Again, no investment, plenty of cash. An example of invesment for you is a project that the company I work for is placing in deepwater now and that will produce next year. By the time they begin production, the cost of the project will have reached approximately 4.7 billion dollars. How much has the government invested for their share of royalties? I'll give you one guess. Zero. Who will tax all parts of the producing, refining, tranportation, and selling of these products. You guessed it, as well as taxing the thousands of employees and businesses that conduct operations in the Gulf. As for all these leases that companies are sitting on, I can't speak for land but in the offshore world, there has to be enough production on a lease to justify spending billions of dollars, or you can't afford to do it. Big Oil companies are businesses with shareholders and operate accordingly. As for refining capacity, it is at close to full capacity now. It will remain that way as long as it remains so expensive and there are so many barriers put up to build new ones. Yes, it will take 7-10 years to begin production if the government opens new areas, at least in most cases, but what happens to prices if we don't take steps. Who knows? I know of at least one case of a very large natural gas find in the Destin Dome area that is already discovered and would take a short time to produce if allowed. I don't suggest that drilling is all of the answer. Just needs to be a part while we develop new technologies and get much more efficeint with what we have. Also, I feel that we are spoiled babies crying over what we have allowed our government to do to us with resources that belong to US, not them.

Posted by bellesouth (anonymous) on July 16, 2008 at 1:33 p.m. (Suggest removal)

http://www.americanprogressaction.org/pr...

The top three conservative myths:

MYTH #1 -- 'DRILL HERE, DRILL NOW, PAY LESS': Newt Gingrich's 527 organization, American Solutions, is promoting a "Drill Here. Drill Now. Pay Less" campaign, collecting over one million signatures on its petition to Congress to "act immediately to lower gasoline prices" by "authorizing the exploration of proven energy reserves" off our coasts. American Solutions is funded by right-wing Las Vegas billionaire Sheldon Adelson, who wants Americans to place another bad bet on oil drilling. As the Energy Information Administration (EIA) has explained, "access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030." But because United States demand for oil far outstrips production -- we consume 25 percent of the world's supply but have two percent of the proven reserves -- further exploitation of domestic resources will not have a long-term impact either. After 2030, the EIA found, "any impact on average wellhead prices is expected to be insignificant." There are numerous ways to immediately affect prices, from use of the Strategic Petroleum Reserve to improved oversight of the oil markets. Over the long term, we must fight global warming and break our addiction to oil through modern technology like plug-in hybrids and smart growth planning.

Posted by bellesouth (anonymous) on July 16, 2008 at 1:35 p.m. (Suggest removal)

MYTH #2 -- CHINA ON OUR COASTS: Conservatives from Rudy Giuliani to Dick Cheney have repeatedly claimed that the United States needs to start drilling for off-shore oil because China is taking "American oil" off the coast of Cuba, just "60 miles off the coast of Florida." Cheney exhorted, "Even the communists have figured out that a good answer to high prices is more supply." That same day, Rep. Roy Blunt (R-MO) wrote that Castro was allowing drilling "45 miles from the Florida keys." Rep. George Radanovich (R-CA) and House Minority Leader John Boehner (R-OH) have also raised the specter of Chinese drilling just off U.S. shores. However, this modern invocation of the Red Scare the claim is completely false. As Cheney was forced to acknowledge, "no Chinese firm is drilling" off Cuba's coast. Talking Points Memo has recorded the large number of conservatives hyping the false story. The Washington Post’s Ben Pershing said the China/Cuba oil drilling claim is the "myth that keeps on giving," calling it "just too juicy not to repeat."

Posted by bellesouth (anonymous) on July 16, 2008 at 1:36 p.m. (Suggest removal)

MYTH #3 -- 'NOT A DROP WAS SPILLED': Offshore drilling advocates know that the specter of oil-slicked beaches would doom their campaign, so they are desperate to wish its environmental impact away. Yesterday, Sen. Mitch McConnell (R-KY) claimed "not a drop of oil was spilled during Katrina or Rita." This myth has been told again and again by the likes of Gov. Bobby Jindal (R-LA), Interior Secretary Dirk Kempthorne, Mike Huckabee, George Will, and Bill O'Reilly. There were, in fact, major onshore and offshore spills due to the hurricanes. According to the official Minerals Management Service report, the hurricanes caused 124 offshore spills for a total of 743,700 gallons, six spilling 42,000 gallons or more. The largest of these spills dropped 152,250 gallons, well over the 100,000 gallon threshhold considered a "major spill." In addition, the hurricanes caused disastrous spills onshore throughout southeast Louisiana and the rest of the Gulf Coast as tanks, pipelines, refineries and other industrial facilities were destroyed, for a total of 595 different oil spills. The nine million gallons reported spilled were comparable with the Exxon Valdez's 10.8 million gallons, but unlike the Exxon Valdez, they were distributed throughout Louisiana, Mississippi, and other Gulf Coast states, many in residential areas.

Posted by Yeahuhuh (anonymous) on July 16, 2008 at 2:58 p.m. (Suggest removal)

Now 77, you seem to have a complaint against the federal government getting funds for offshore leasing. Like in addition to putting up the oil bearing formation, and offering to transfer the bulk of the oil to the producer, that somehow you thnk they should cough up some funds, too?

Are you suggesting that they have no right to the fees? Where would that leave the rest of us -- the folks who own the undivided interest? Completely out of the deal except to buy at world prices?

My only contention is that those fees and royalties are less than when onshore projects are pursued, and that is why companies spend the considerable amount of money that it takes to produce on the OCS. We all know if it wasn't profitable your company would certainly not be there.

I don't think anyone wants to stop drilling. The subject here is if strategic in-ground reserves and environmental issues should be discarded to allow drilling in sensitive areas.

Posted by fire39212 (anonymous) on July 16, 2008 at 3:36 p.m. (Suggest removal)

Keep it turning to the right....

Posted by 77shovel (anonymous) on July 16, 2008 at 3:47 p.m. (Suggest removal)

You won't find in the comments I made that the federal government has no right to collect fees. Those leases belong to the taxpayers and they have every right to share in the production. My point is that the federal government does get a share of the proceeds and higher prices mean more money for them. That removes a lot of their motivation to reduce the price. I would like to know where you get your information about how cheap it is to lease lands offshore. Most lease sales generate anywhere from 1 million to in excess of 35 million dollars per block for a 10 year lease which, by the way, has no guarantees of ever producing one drop of oil or one btu of natural gas. All of the risk belongs to the companies and their shareholders. All I ask is that the federal government, meaning Congress, stop being so hypocritical about how the oil companies are making historical profits when the federal government is doing the same with none of the expense and none of the risk. We brought these prices on ourselves with their policies and short-sightedness.

Posted by 77shovel (anonymous) on July 16, 2008 at 4:23 p.m. (Suggest removal)

Myth 1: Drill now pay less. I have no facts to prove it but, I believe, if Congress allowed drilling today, the price for a barrel of oil would immediately drop. Why? Part of the increase is due to speculation. As for what the EIA claims, that is totally bogus information. There is no way to tell how many reserves we have in many of those areas because they haven't been explored. Geological work has to be done to find out what is there. Even in the areas that were explored before the ban, there is no way to tell what reserves are there due to the advance in technology. The deepwater drilling we are doing now would not have been attempted 20 years ago due to technological restraints. We simply don't know what we have.

Myth 2: Yes, absolutely correct. China is not drilling off of our coast. They are attempting to work with Cuba to plan production off Cuba's coast. I have no idea if they could carry this off but if they can, by utilizing directional drilling, they could conceiveably reach reserves that we could otherwise produce. Not enough information is known at this time to prove any of that.

Myth 3: Of course there were spills caused by Katrina. I don't make it a habit of believing what any politician says. That being said, we do have to produce oil and gas to supply our needs. We hog energy in this country, it's obvious by the amount we use. Every technology is used and every attempt is made by reputable companies to reduce the chances of pollution. To be honest, I was really surprised by how well the platforms offshore fared in Katrina. Judging by some of the damage I personally saw, it's amazing they made it through the storm. We are only just now completing repairs related to Katrina. We are at a crises and we must use technological advances to meet future energy needs, but the simple fact is that those technologies are not advanced enough at this time to get us through. Just take a look at the ethanol fiasco. All it did was cost more at the pump due to subsidies and cause higher prices at the grocery store. That will be the case until we advance our technology. To me, nuclear power and others should all be part of the solution. But meanwhile we are allowing other countries to increase our dependency on them and we don't seem to give much thought to what happens to their people and environment while we hog most of the supply and keep our part of the resources off limits. Keep in mind that we only now have to deal with these prices while most of the rest of the world has been dealing with this for years.

Posted by Krogers (anonymous) on July 16, 2008 at 6:08 p.m. (Suggest removal)

good article ND

Yes anyone that believes in supply and demand knows that we need more domestic supply, and we also know it's out there waiting for us

Weak dollar? yes because we're sending all out money overseas to pay for oil. EKK I'm shocked you couldn't figure that out!!

Posted by Krogers (anonymous) on July 16, 2008 at 6:13 p.m. (Suggest removal)

Very interesting discussion, I wish I had more time to read through all of it

Posted by bellesouth (anonymous) on July 16, 2008 at 6:56 p.m. (Suggest removal)

"I believe, if Congress allowed drilling today, the price for a barrel of oil would immediately drop."

That's not what the experts say. Besides, Congress has allowed drilling today. The oil industry/republicans just want to make an issue out of opening up more places to drill even though they don't drill where they are allowed to now!

Posted by bellesouth (anonymous) on July 16, 2008 at 7:12 p.m. (Suggest removal)

Oh, now the update says it was minimal. NOT!

http://www.mms.gov/tarprojects/581/44814...

Unsurprisingly, this devastation caused significant spillage, according to the official report prepared for the MMS (U.S. Minerals Management Service) by a Norwegian firm:

Hurricanes Katrina and Rita Caused 124 Offshore Spills For A Total Of 743,700 Gallons. 554,400 gallons were crude oil and condensate from platforms, rigs and pipelines, and 189,000 gallons were refined products from platforms and rigs. [MMS, 1/22/07]

Hurricanes Katrina and Rita Caused Six Offshore Spills Of 42,000 Gallons Or Greater. The largest of these was 152,250 gallons, well over the 100,000 gallon threshhold considered a “major spill.” [MMS, 5/1/06]

In addition, the hurricanes caused disastrous spills onshore throughout southeast Louisiana and the rest of the Gulf Coast as tanks, pipelines, refineries and other industrial facilities were destroyed, for a total of 595 different oil spills. The 9 million gallons reported spilled were comparable with the Exxon Valdez’s 10.8 million gallons, but unlike the Exxon Valdez, were distributed throughout Louisiana, Mississippi, and other Gulf Coast states, many in residential areas. The most massive spills included:

– The Bass Enterprises Cox Bay spill of 3.78 million gallons of oil, the largest spill caused by the hurricanes
– The Murphy Oil spill in Mereaux, LA of 819,000 gallons of oil, contaminating 1,700 homes and the local high school

At the time, the Houston Chronicle described the devastation as “among the worst environmental disasters in U.S. history.”

Posted by sammohon (anonymous) on July 16, 2008 at 7:24 p.m. (Suggest removal)

bellesouth...the oil companies don't drill where there isn't a probability of finding oil...your idea that they have all these leases they could drill on now is a spurious liberal red herring...most of those leases are to protect other adjacent producing leases...we must open up the areas where finding oil is a probability.

Posted by EnKiKur (anonymous) on July 16, 2008 at 8:14 p.m. (Suggest removal)

hey Sam! Welcome home.

Posted by bellesouth (anonymous) on July 16, 2008 at 11:02 p.m. (Suggest removal)

Uh, Sam, oh, you mean like the right wing talking points that there were not any spills during the hurricanes. Where's you factual data? Why do they have leases where they don't want to drill? Anywhere but where they can drill right? Political = Money and we know the oil industry ain't hurting for money, right?

Posted by Yeahuhuh (anonymous) on July 17, 2008 at 12:32 p.m. (Suggest removal)

Sammohamon -- Spurious liberal redherring? I know A LOT about leases and I disagree completely. The probability of finding oil at any given time is not a black or white consideration, except in very few circumstances. Also your assessments of the already discovered nature of available lease areas is laughable. You are talking about an awful lot of real estate.

Anyone who will say, imply or speculate that the oil companies who were solvent at $30 oil now find themselves unable to find drilling sites at $135 oil is either not being truthful or is clueless.

So here we have the readers correcting the writing of the Democrat, then the Democrat again making an error in stating that the spills were minor. I accuse them of shooting toward a readership with popularisms but basing their argument on misinformation. Judging from the Democrat's admonitions of legislators and whoever they feel like doing it to, isn't that publishing malfeasance? I mean what makes FOX so laughable is that they shamelessly stroke their readers' prejudices and make them ignorant in the meantime -- for a buck.

Anyone who follows the market knows that causing a micro-blip in prices -- as we might get from announcing a ban was lifted -- is a simple matter of illusion but making for sustained price changes is a much more rigorous process. In this buinsess, though, a microblip in prices can make a limited number of people filthy rich overnight and not do much else.

Check this link for an assessment of Louisiana state leases.

http://www.oilandgasinvestor.com:80/Head...

This for the state shows how many were offered and how many were taken, Prices of onshore and offshore leases, and judge from the high prices paid whether there are any leases available for oil and gas drillers to pursue.

Oil companies don't pay 30,000 bucks and pay out 27.5% royalty for a lease they have any doubts about. They will be glad to blow smoke up your patoot to get cheaper offshore areas to drill, however.

These figures do not address the OCS. But they are indicative.

I would caution anyone who thinks about these things to be conservative with our limited oil reserves -- be conservative in the old sense. It seems from what they write here like most folks in Mississippi feel that they have to have some government giveaways to be conservative. Conservatives have de-evolved an awful lot over the last 20 years in my estimation -- they now sound like the liberals they seem to hate so passionately.

It is entirely legitimate to use public policy not only for giveaways from the government (like most political conservatives seem to want), but to also utilize onshore deposits, new technology, and other schemes that distribute the oil dollar better for our economy than OCS leasing would do.

Posted by Krogers (anonymous) on July 18, 2008 at 11:43 a.m. (Suggest removal)

So what if there were some leaks from a category 5 hurricane! Would expect nothing short of that to happen? It's just a miracle that some of the drilling platforms weren't capsized and that major catastrophe and that loss of human life didn't occur.

What a bunch of nitpickers. Until we have valid and functioning alternatives, we must continue with what is working for us - oil. You guys that are against more domestic oil sources need to start walking and biking.

Posted by Yeahuhuh (anonymous) on July 20, 2008 at 2:17 p.m. (Suggest removal)

Read up Krogers -- NOBODY is against more domestic oil sources. N-O-B-O-D-Y N-O-B-O-D-Y N-O-B-O-D-Y

Some people just remember why some areas are off limits. And the reasons the decisions were made that way.

Just a bet, the Democrat didn't bother to research the matter before they wrote their opinion. They just used a mix of supply side logic, faith in free enterprise, and common sense. The folks on the other side did far more to come to their conclusions.