Letter From American Association of Petroleum Geologists

Liberal and Envionut talking points just plain false.

Hey folks,

Hope you all had a good Monday. Now I want to start off telling you, and some of my friends out there that like to use some of my stuff, this is going to go long. But I have a lot to say about this. I also want to answer a private question publicly.

"Why did you allow DS Harford to post that today, when it seems that he does not agree with you on why energy costs are so high? You seem to be pushing people to sign the 'Drill Now' petition, yet it seems to me that DS Harford is against that. I'm just wondering. Not that I really expect an answer."

Well, I always try to answer. Of course, some of the Loonies out there will be waiting for a while. It's sometimes hard for me to deal with stupidity. {Smile} Basically, I can answer that question and a few others along that same lines by asking you this. What is wrong with differing opinions? That is what the OPN {The Our opinion Network} is all about.

Now do Doug and I, or do YOU and I, agree on EVERYTHING? No. That does not mean that one of us HAS to be completely wrong and not worthy of being heard. Who says that Doug and I DIS-agree on this? I agree with what he said. That IS how a price is figured for a barrel of oil.

What you may be talking about here is the way Doug kept saying "Newty." Does this mean he does not accept the petition as important, or the fact it will change anything? I do not think so. Do I blame the Speculators? No. Big Oil? No. I do not blame them for wanting to maximize their profits.

Take the guy that came up with the "Pet Rock." He looked down, picked up a rock, put eyes on it, became rich. Should he get millions for it? If he can, then why not? Big Oil is in business to make money.

Do I question if production is manipulated from time to time to artificially inflate profit? Yup. They have been doing that for YEARS. Do I feel that the Speculators have driven the price up FAR past the confines of Supply and Demand? Yup. But I do not blame them. We have to rely on them and play their games because the Envionuts, and some in our Government have prevented us from using our own resources for FAR to long.

Drill here, Drill Now, Pay Less WILL work. As a matter of fact, it IS working. 1,136,368 people, at the time I'm writing this, HAVE signed the petition. New polls show 76 percent of Americans believe that we SHOULD. Including now over half of Liberals polled.

So what happens? According to the Christian Science Monitor, CSM - Some signs of relief on gasoline prices

Some of the long-term factors that have pushed oil prices to record levels are starting to change.

In large part because gasoline prices are over $4 a gallon, demand for fuel in the US is falling for the first time in 17 years. China is raising prices for gasoline and diesel – a move that might ultimately lower demand. And, on Sunday, there were signs supply might increase as Saudi Arabia's oil minister indicated that the country would increase production through the end of the year if needed. Iraq is also set to sign contracts with foreign companies to hike production.

"It's all a step in the right direction," says Phil Flynn, an oil analyst and trader at Alaron Trading in Chicago. "These are certainly signs to the market that prices can't just continue to go up."

That's not it folks. The simple fact is the prices started going down when President Bush stood up and said ENOUGH! When long time foes of drilling, starting listening to YOU, and changed their opinion. When the majority of Americans said DRILL NOW.

So you have this movement that has exploded for us to use our own oil. But here is the REAL problem that some of the Liberals have with this. One, they WANT the price high. If the price of oil continued to skyrocket, they can continue to attack Big Oil. The movement of some Liberals in Government is growing to SOCIALIZE the oil companies. Two predominate Democrats have come right out and said so. Second, they want to tax them "Windfall Profits" tax. There is no such thing when talking about oil. More on that in a second. Third, GWBS. Some FEAR that if we drill and use our own resources, it WILL work. The prices will become so cheap that people will stop looking for Alternative Fuels. They will lose their momentum with the American people. AFs will no longer be as appealing as they are now with the high gas prices.

First, Socializing the oil companies pretty much speaks for itself. "Windfall Profits?" Do you even know what that means? That means you do nothing to gain profit from something. In other words, winning the Lotto, receiving an unexpected inheritance, the Government taxing Big Oil, ETC. Many trace this back to Colonial Times. The British Government controlled how much and what kind of wood they could use. However, if a storm came through and knocked down a bunch of trees, they could use them due to that being an act of God.

Big Oil does NOT sit back and do nothing to profit. They search out, drill, refine, and ship. What Big Oil gets is profit. NOT Windfall Profit. That is what our Government gets by taxing up to 6 times the amount Big Oil gets, without doing ANYTHING to earn it. So what you really have is the third reason. GWBS.

SO some Liberal, Envionut, came out with the talking points to argue against drilling and using our own. EVERY good Lib out there is simply repeating it. One of the biggest parts of this completely false argument is that Big Oil already has something like 68 million acres and are doing nothing.

Nancey Pelosi said this in a statement yesterday.

"With American consumers and businesses struggling as the price at the pump cascades across our economy, Senator McCain's proposals show he aims to continue the 'drill and veto' policies of the current Administration. John McCain's energy proposal is an attempt to divert attention away from his recent flip flop and his support of the failed Bush-Cheney policies that have resulted in skyrocketing gasoline prices for consumers and skyrocketing profits for Big Oil."

A Complete and outright lie. It has been the Envionuts and the Liberals that PREVENT us from using our own resources for over 30 years. No new refineries. No Nuclear planets, No drilling. THAT is what caused the high gas prices today.

"Last week, Senator McCain reversed himself and said we need to drill more. Today, he has reversed years of failing to support more efficient cars, new energy technologies and green jobs. Democrats welcome a debate on energy independence from Senator McCain, but we just don't know which John McCain we are debating."

OK, if you truly believe, which I really don't you do, but if you truly believe the garbage of it will take over ten years to drill and produce oil, then it will mean nothing price-wise, then I ask you this. HOW LONG will it take to start using AFs? How will "Windfall Profit Tax" add one more gallon, or decrease the prices at the pump?

"Americans are suffering under the Bush-Cheney-McCain policies that were written by Big Oil: $4 a gallon gasoline; $136 per barrel oil and increased reliance on foreign sources of energy. Americans need and deserve a consistent vision for energy independence that will invest in real solutions from their next President."

No Pelosi, the American people are suffering because of IDIOTS like you.

Do you want some REAL information about those 68 million acres, and the drilling procedure itself? Well, it turns out that the American Association of Petroleum Geologists sent this letter to Nancey Pelosi and others in Government. Interesting read.

Willard R. (Will) Green, President June 23, 2008
The Honorable Nancy Pelosi, Speaker U.S. House of Representatives
Washington, DC 20515
The Honorable Steny Hoyer, Majority Leader
The Honorable John Boehner, Republican Leader U.S. House of Representatives Washington, DC 20515

Dear Speaker Pelosi, Majority Leader Hoyer, and Minority Leader Boehner:

Given the on-going debate about access and leasing activity on federal onshore lands and the Outer Continental Shelf, I would like to offer some perspective, on behalf of the American Association of Petroleum Geologists (AAPG), on the science and process of finding oil and natural gas.

AAPG, an international geoscience organization, is the world's largest professional geological society representing over 33,000 members. The purpose of AAPG is to advance the science of geology, foster scientific research, promote technology and advance the well-being of its members. With members in 116 countries, more than two-thirds of whom work and reside in the United States, AAPG serves as a voice for the shared interests of energy geologists and geophysicists in our profession worldwide. AAPG strives to increase public awareness of the crucial role that the geosciences, and particularly petroleum and energy-related geology, play in our society.

Finding and developing oil and natural gas blends science, engineering, and economics. It has distinct phases: exploration, development, and production. And it is risky, because finding oil and natural gas traps, places where oil and natural gas migrate and concentrate, buried under thousands of feet of rock is like finding the proverbial needle in a haystack. Talent and technology increase our chances of a discovery, but there are no guarantees.

What is exploration? Well, the grid pattern on a block map makes it tempting to think of exploration as a process of simply drilling a well in each grid block to determine whether it contains oil. But because of the natural variation in regional geology, one cannot assume oil and natural gas are evenly distributed across a given lease or region.

Rather, exploration is about unraveling the geologic history of the rock underneath that grid block, trying to understand where oil or natural gas may have formed and where it migrated. If the geology isn't right, you won't find oil or natural gas.

Legendary geologist Wallace Pratt once observed, "Where oil is first found is in the minds of men." When preparing a lease bid, geologists use their knowledge to identify the specific areas in a region that they believe have the highest likelihood of containing oil and natural gas traps. Successful exploration begins with an idea - a hypothesis of where oil may be found.

Since exploration is about developing and testing ideas, some acreage available for leasing is never leased. That is because no one develops a compelling idea of why oil or natural gas should be there. Similarly, some acreage is leased and drilled repeatedly with no success. Then, one day, a geologist develops an idea that works, resulting in new oil or natural gas production from the same land that others dismissed as barren.

Once a lease is awarded, geologists begin an intensive assessment. They collect new geological, geophysical, and geochemical data to better understand the geology in their lease area. They use this data to construct a geological model that best explains where they think oil and natural gas were generated, where it may have been trapped, and whether the trap is big enough to warrant drilling.

If there is no evidence of a suitable trap, the explorer will relinquish the lease and walk away. If they see a trap that looks interesting, they schedule a drill rig to find out if they are right. Drilling is the true test of the geologists' model, and it isn't a decision to be made lightly. Drilling costs for a single well can range from $0.5 million for shallow onshore wells to over $25 million for tests in deep water offshore.

As the well is drilling, geologists continually collect and evaluate data to see whether it conforms to their expectations based on the geological model. Eventually, they reach the rock layer where they think the trap is located.

If there is no oil or natural gas when the drill reaches the trap they were targeting, they've drilled a dry hole. At this point the explorers will evaluate why the hole is dry: was there never oil and gas here; how was the geological model wrong; and can it be improved based on what they know from the drilled well? Depending on the results of this analysis, they may tweak the exploration idea and drill another well or decide the idea failed and relinquish the lease.

If there is oil and/or natural gas, they've drilled a discovery. Typically, they will test the well to see what volumes of oil and/or natural gas flow from it. Sometimes the flow rates do not justify further expenditures and the well is abandoned. If the results are promising, they will usually drill several additional wells to better define the size and shape of the trap. All of this data improves the geological model.

Based on this revised geological model, engineers plan how to develop the new field (e.g., number of production wells to drill, construction of oil field facilities and pipelines).

Using complex economic tools, they must decide whether the revenue from the oil and natural gas sales will exceed the past and continuing expenses to decide whether it is a commercial discovery.

The process of leasing, evaluating, drilling, and developing an oil or natural gas field typically takes five to ten years. Some fields come online sooner. Others are delayed by permitting or regulatory delays or constraints in the availability of data acquisition and drilling equipment and crews. Large projects and those in deep water may require a decade or more to ramp up to full production.

As you can see, oil and natural gas exploration is not simple and it is not easy. It requires geological ingenuity, advanced technologies, and the time to do the job right. It also requires access to areas where exploration ideas can be tested--the greater the number of areas available for exploration, the higher the chance of finding oil and natural gas traps.

U.S. consumers are burdened by high crude oil prices. Conservation and efficiency improvements are necessary responses, but equally important is increasing long-term supply from stable parts of the world, such as our very own federal lands and Outer Continental Shelf.

As Congress considers measures to deal with high crude oil prices, I urge caution. Policies that increase exploration costs, decrease the available time to properly evaluate leases, and restrict access to federal lands and the Outer Continental Shelf do not provide the American people with short-term relief from high prices and undermine the goal of increasing stable long-term supplies.

I am happy to further discuss these ideas. Please contact me through our Geoscience & Energy Office in Washington, D.C. at 202-684-8225 or 202-355-3415.

Sincerely,
Willard R. (Will) Green President
Cc: The Honorable Nick Rahall, Chairman, Committee on Natural Resources The Honorable Don Young, Ranking Member, Committee on Natural Resources

Does that sound like "Windfall Profits" to you? It really is simple. Drill here, Drill now, Pay less WILL work. It has already started and we have not even put one drill on the ground. We need to do this. We need to do this now. And it IS, just that simple.
Peter

Sources:
CSM - Some signs of relief on gasoline prices
AAPG- Letter to Pelosi
Office of the Speaker of The House
Office of Roy Blunt