Hey folks,
That's right. The Moratoria has expired yesterday. I know there is a lot of excitement out there right now. YES. It is a great victory. But let's talk about this whole debate and what we can REALLY expect to see in the near future.
First the arguments we will hear intensified even more. One even if we start drilling NOW, we will not have oil for ten to twenty years. Two, "What If?" What if there is a major hurricane that destroys one of these Rigs. We will have damage done to the environment that we have never seen before. We are putting the PLANET in danger so that the oil companies can continue to get rich. Three, who the hell wants to see these ugly things anyway.Well. lets answer the the two most important ones. The seeing the ugly thing is irrelevant because you can not see them from shore. When done, you will never even know they were there. Remember I posted Ten to Fifteen Years
I posted the Video, which is beyond impressive, and ended it with this.
So let's recap. No oil. A structure larger than the Eiffel Tower, weighing as much as 10,000 cars, that will be producing oil from THREE different fields, and a product to market within 2 years. Do not tell me we can't do it. Do not tell me we can't drill our way out of foreign dependency. Out of outrageous gas prices, and do not tell me that this will kill the planet. We can do whatever we set our minds to. THAT is what has always, and will always, keep us great.
During the API Conference with API President Red Cavaney, it was brought out that it could be even sooner than that. However, there is a bit of a catch. More on that in a second.
How about the "What If" thing? Well, We have had some MAJOR Hurricanes over the past few years. Some have hit the Rigs head on. Yet? Not one drop of oil has leaked. As one of the other Bloggers Gregg Blach over at Goat's Barnyard participating in the conference points out,
"There are over 2000 mapped natural seepages off the Ca coast that leak hundreds of barrels a day into our coastal waters. Tapping those seeps would reduce that leakage substantially. Another point is that drilling platforms are not that big and are no more noticeable than a passing ship to the casual observer."
OK. So doing away with those arguments, what about new refineries? Back on August 3, 2008, I posted this. Interesting Concept for New Refineries This truly was something I never heard before. The concept was to use closed Military Bases and convert them into new Oil Refineries.Well, there you go. A simple solution to a SIMPLE problem. The Military bases are already there. Renovating them into refineries will not effect the environment anymore than they do now. No new land cleared. No need of surveys to see the impact. It's truly a brilliant plan. They are there, just refine the bases to refine oil, problem solved.
This was one of the questions I was going to pose to Mr. Cavaney. Joy McCann, Little Miss Attila beat me to it. Here is Mr. Cavaney's response.
A couple of years ago, the government started an effort to try and make available Air Force bases and other kinds of bases, some kind of surplus land to use [for] a refinery. But what people encountered – by the time you look at all the infrastructure you would need to get the raw material there and then to process it and get it all out, the cost got so high per barrel of output that you just couldn’t get the return on it and so there wasn’t much happening there. And you went back to the model that they currently use where you can add a barrel of capacity to an existing refinery at about 60 percent of the cost of a brand-new barrel from a new refinery and you can bring it on at least twice, if not three times as fast. And that’s sort of the conundrum we get caught in at these more remote locations.That makes sense. So we have the Moratoria expiring. The Ban lifted. We should see new oil hitting the market soon. Right? Not so fast. Like I said, this IS a great victory for all of us that have been working so hard at fighting the Failure of the House Pelosi, and the rest of those standing in the way of us producing and using our OWN resources. This IS a result of all of you that wrote letters, made phone calls, and signed petitions like Newt's Drill Here, Drill Now, Pay Less. But there are still some very obvious obstacles to overcome.
One is the most obvious. We are about 30 days away from the election. When the new President takes over, if it is the WRONG one, they can simply reinstate the ban by Executive Order. So it really will not matter that the Moratoria expired. Devil's Advocate, Copious Dissent asked about this. Here is the exchange.
00:05:37 DEVIL’S ADVOCATE: Yes, this is Devil’s Advocate from Copious Dissent. I just have a quick question on how much the potential of a reinstatement of the moratorium is actually stalling future production. If you know that they might throw it in at the last minute after you spend millions of dollars on whatever you need to do to get production going, how is that impacting you, just the fear of that getting put in place again?
00:05:56 MR. CAVANEY: Yeah, well, right now, we’re continuing on a path that we would have been on had the moratoria languished, stayed in the continuing resolution or not. What we’re actually looking for and what we need is some proactive signal from Congress in particular or whoever the next president is that the moratoria is passed and here is what we can agree to in terms of potential exploration and production opportunities. That’s really what we need to go to the next round. Otherwise, we would just continue along as we have been looking at the five-year plan and taking those quarterly leases as they came up.
But as I said, we consider this because it did take a proactive decision not to include the moratoria as the first good sign that there is some folks paying attention to what the public is asking for.
Then of course you have the Envionut groups out there that are already trying to prevent any new drilling by bogus and idiotic lawsuits. I asked Mr Cavaney about this.
I have a follow-up on the refineries and the moratoria itself. This is Peter from OPNTalk. And the issue that I see – I think it’s a positive thing, the moratoria being lifted, obviously. That’s what 85 percent of Americans feel. We need to use our own resources. But in reality, is this – it’s a victory. But are we not going to be faced with lawsuit after lawsuit after lawsuit? We’re dealing with certain individuals in this country that, you know, do not necessarily look at things logically or even sanely. And you know, we’ll have groups of people, one right after another, filing lawsuits that could tie this up, in essence, the rest of our lifetime, fighting it out in court. Is there any way, are you guys looking into a possibility of lumping everybody together in a class-action lawsuit, one court, one time, get it done with? Then, let’s move on with production? 00:20:21 MR. CAVANEY: (Chuckles.) Maybe in our dreams. But I don’t know of anybody that’s actually tried to do that. Your point is well made. Let me just, for those people that may not know – back in February of this year, in the Chukchi up in Alaska, they had a lease sale, as a matter of fact, a very attractive lease sale. It ended up bringing in about $2.7 billion of bonus bids for the government. And do you know, as we sit here today, every single one of those leases has a lawsuit filed against it?
(Cross talk.)
00:20:52 MR. CAVANEY: So there is now a very direct effort, obviously, like a whack-a-mole. Every time you do something, you’re going to get a response. So we’re just going to have to work our way through that. And hopefully, by beginning to explain it to people and having people pay closer attention, you know, we’re going to get the right kind of support in the public.
The one thing that gave us encouragement was the fact that you could almost look at it – when gasoline got up to $4.00 a gallon, all of a sudden, in people’s minds all over the country, a connect the dots occurred. And people asked all the right kind of questions, came to the right conclusion. And politicians started to move. So I think people will begin to understand that there is a connection between security. There is a connection between diversity to how we do this and a lot – [24:14] – are intended as much as anything to – (inaudible) – and to discourage the investment that is needed – (inaudible).
But what about all these new Green jobs? What about all these new jobs that will be creating in our search for Alternative Energy? Doug Lambert, Granite Grok asked about this.
00:30:35 MR. LAMBERT: This is Doug from Granite Grok. And I would just like to follow up on that particular question because we have got a local Senate race here in New Hampshire. And one of the candidates is really, really hitting on the present senator, the Republican John Sununu, as being in bed with you guys. (Chuckles.) Actually Big Oil – we see the commercials every 20 minutes on TV.
And one of the things that the challenger claims is that with renewable and alternative energy, it would look to create millions of jobs. And, you know, that struck me because I am somewhat familiar. I do work in the power generation industry. And just like you spoke of these quality jobs and good numbers of fairly well-paying jobs, I have got to believe that the present industry supplies or provides maybe millions of jobs. But do you have any – do you have a feel for how many people directly or indirectly are employed in the industry present? And what the kinds of expansion that you would like to see domestically – what that might bring for a future job potential – like real numbers that I can use to maybe take on some of these claims?
I will admit this. I never really thought about it the way Mr. Cavaney answered. GREAT answer.
00:31:56 MR. CAVANEY: We use a 1.9 million for the total oil and gas. And if you want to look to the upstream side, which we have been talking about in terms of the offshore activity, you are looking at 200,000 of that would be upstream. And the rest, obviously, is the larger numbers that come with the retail and the distribution and the like.But again, those are direct. They don’t cover all the ancillary kinds of jobs. And that is what we think is particularly important about – our materials that we produce, oil and natural gas, you know, they are the building blocks. They then, whether it is through a refinery or wherever, they then have to undergo conversion steps before they get delivered to another product.
So a lot of our jobs have much – how should we say – are much higher paying, they are much more connected and concentrated for opportunity than, let’s say, some of these green jobs that are being talked about when you are going to go put up a, let’s say, a wind farm, you know. And you are going to have a lot of isolated things. Those are pretty simple skills. They’re in one place, you have transition line and it moves on. So we have found – and this isn’t just our comments. It is from talking – the people that have been out trying to assess the job scene. One of the reasons why you are getting a good rush in college after several decades of not very many people being interested in our industry is they are seeing this potential for not only the jobs in the industry, but the ancillary jobs that come – that is chemical engineers and other kinds of folks taking these building blocks and moving them on.
But you have to remember this also. All these alternative jobs are DECADES off. I followed up on this point.
00:37:37 MR. CARLOCK: This Peter from OPNTalk again. I want to – join what he was just talking about and what you just said. From all of the data that I have seen, as far as new jobs go, it seems like within – between six months and a year, we could have a great deal more jobs. I don’t know the specific number. But when you are talking about all of this alternative energy and everything, we are looking at 10 to 20 years down the road. And when you look at the whole situation logically, you can’t fly a plane with solar, can’t really drive a car with solar. I mean, there’s a lot of things that they have to overcome just to make it viable and affordable for everybody to go out and get. We are not going to have – do away with oil and gas in the next six months and then have all these great jobs that they are talking they are creating. I think we can do both at the same time.
00:34:37 MR. CAVANEY: That is our point. Number one, we have said we need all forms of energy. And we say that because you want to get as many new forms of energy out there active to see which ones can ultimately become competitive without huge subsidies and may be a part of that next generation of energy. You know, it isn’t going to magically appear overnight. But there is no scenario that we have seen from any respected think tank or government that looks at the demands for oil, natural gas going forward that doesn’t show it being basically the cornerstone of any effort that you use.
The people that talked about next generation of a car – they are going to run on, let’s say, electricity. Well, that is fine. But you want to talk about the job component, it goes to the point I made – you go out to a job source where you are going to create electricity. It goes on a transmission line, ends up, gets plugged in. You are not creating out of those things the kind of secondary job growth and the opportunities for derivative products to the same extent that you would where we are.
So we think that we are going to continue to be a job creator here. If we get this increased access, we think that you are going to end up finding petroleum products are going to stay and be an important part for a long, long period of time. There are people that you talk to and that work with a lot of the auto companies. And when you look at whether it was fuel cells in the early rage or some of these others now, you will find that there is a lot of people that feel the more we can get the fuels cleaned up, the improvements that have yet to be realized, the internal combustion engine, and also the things that can be done by converging the electric technology, that you may well find that in the future looking at, you know, one of these variations of, let’s say, take 10 years added on to one of the current-day hybrids, you could have a car that has very, very, very few emissions, that had yet, the kind of mileage equivalent to whatever a fuel cell is going to produce at that time and give you the kind of range you need.
So this race is by no means over yet. But we do want to see more forms of energy and others come up with ideas. That is generally – in our industry, the big game changers have all been written by technology, not by some mandate or by some declarative law that is going to do something.
Do not get me wrong folks, the expiration of the Moratoria IS a great victory. I just want to you to realize that you are not going to see new product being rushed to market and the prices falling and staying down at the pump over night. We need to keep educating people as to the FACTS of the situation. We need to make sure that those that have, and continue to, stand in the way of progress, do not get into a position where they can simply kill the progress we have made.
The election is IMPORTANT. Getting people like Pelosi and Reid out of the way is IMPORTANT. But continuing to educate the public is even MORE important. Knowledge IS power. You have that power. As with Amnesty, the Drilling Moratoria, and now with the $700 million dollar Bail Out, YOU have see your power in full force.
So I leave you today with this thought. Just like with the lower gas prices, do not get complacent with the Moratoria expiring. We must continue to fight for drilling. We must continue the efforts we have been making to continue the progress we have made. We are still fighting an up hill battle, but like I said before, we ARE Americans. We can accomplish ANYTHING.
Peter
Sources:
OPNTalk- API Blogger Conference Call: Energy Current Events
Energy Tomorrow
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