Offshore vs. Onshore - Options for energy

The Coffee Shop
1

I wondered, a year (or so) ago when the Obama Administration “blessed” the Beauford Sea oil leases (for you strict left-leaning partisans that need to be thrown a bone, I will conceded the leases were let under Bush 2) while leaving ANWR off limits, “What is our greenie president thinking”. The facts of the situation:

  1. Offshore exploration and production are inherently more problematic than onshore work.

  2. The additional problems result in increased production costs, and lower margins for the oil companies. They also constitute increased risk. Same reward, increased cost and risk: the oil companies would rather be onshore.

  3. When bad things happen, offshore spills are disastrous, as everyone is seeing now in the Gulf.

  4. ANWR is frozen nine months a year, making cleanup, during those nine months, almost simple. During the other three months, cleanup is still fairly straightforward. Even a major spill can be handled. Do you remember a few years ago when that nutjob shot a 300 Win Mag into the Trans Alaska pipeline, and the oil was gushing (it’s currently running at 800 psi) out? No? You know why – the cleanup was a breeze, especially compared to the offshore environment.

  5. The oil companies have been pretty good stewards on the North Slope. I would bet that any new developments would start off as green developments (no uncontained spills, to the point of drip pans under every vehicle, reporting of any quantity spill). Most sites in Alaska have these restrictions/operating practices now, but they didn’t always.

  6. There are no realistic plans on the horizon to significantly (my definition – greater than 20% reduction) reduce our dependence on fossil fuels – even the windfarm wet dreams (I’m not advocating NOT trying to reduce our dependence, just stating the obvious fact that we aren’t there, and we aren’t moving there very fast). Given that our demand is essentially constant, we will need supply.

  7. Alaska, the largest domestic supplier of petroleum for the US, is supplying less than 10% of our demand. The Trans-Alaska Pipeline System (TAPS) is running at 1/3 capacity.

So now Obama has cancelled (actually, they are under review, but will be cancelled) the Beauford Sea oil leases. Great. Nice “knee jerk” reaction. Now what is the real solution for our energy needs?

Until we decrease our dependence on oil, we will need to drill, or purchase it from someone who is drilling. Would you rather drill onshore in ANWR, with the controls that are in place for it, and utilize a capital asset that is already in place (TAPS), thus avoiding construction of another huge oil pipeline (and its associated environmental risks), or buy from Saudi Arabia/Russia/-stans, where there are minimal environmental controls, or, worse yet, drill offshore?

Unfortunately, the “green movement”, while having some good wins to its credit that have improved all of our lives, often misses the boat on the bigger issues. Win the battle, lose the war. Opposing ANWR, and permitting offshore drilling? Bad choice. Now let’s see what happens. Oppose offshore drilling – in favor of what? No drilling. It won’t work, until we come up with that “magic energy pill”, and it’s not on the horizon.

We will need our energy from somewhere – the question is, where? Onshore development, offshore development, or buy it from someone who really doesn’t care about how they get it out of the ground (Russia, Saudi, or one of the –stans)? Those are the real choices…

This doesn’t even consider the devastating impact of the $$ shipped overseas to supply our petroleum demands, and their effect on our economy - a discussion for another day …

Dan

2

**Until we decrease our dependence on oil, we will need to drill, or purchase it from someone who is drilling. **

That’s why I have invested in Canada’s oil sands.

3

So now Obama has cancelled (actually, they are under review, but will be cancelled) the Beauford Sea oil leases. Great. Nice “knee jerk” reaction. Now what is the real solution for our energy needs?

There isn’t any solution. You can drill drill drill all you want it is a drop in the bucket of our current consumption.

Short of a revolution in nuclear power the only answer is less people or people using drastically less energy than they used to.

as to your other questions, decisions made by politicians are made based on politics, not on reason, physics, math, or anything else. You know that

=)

4

I asked this in another thread, but I’ll ask it here too, what if those evil liberals had not blocked drilling in ANWR? Do you think that would have stopped deep water offshore drilling?

5

I asked this in another thread, but I’ll ask it here too, what if those evil liberals had not blocked drilling in ANWR? Do you think that would have stopped deep water offshore drilling?

No.

That’s not the point of this discussion. The point is to take a real look at the potential consequences of actions. When you disallow responsible development onshore (or in the US), but do nothing to modify the demand, you naturally push the development elsewhere. Either deep water offshore, or into other countries where there is less control on the process of development.

When you do either of these, you are morally liable for some of the natural consequences of your actions.

Dan

6

So, if the USA stops offshore drilling, does that mean that Venzula, Russia, Mexico, Azerbaijan, etc will also stop. Nope, don’t think so. There is only one solution: find an economical replacement for the internal combustion engine.

7

So, if the USA stops offshore drilling, does that mean that Venzula, Russia, Mexico, Azerbaijan, etc will also stop. Nope, don’t think so. There is only one solution: find an economical replacement for the internal combustion engine.

There ya go. Wasn’t that easy!

That’s the problem - because you can’t package the problem and solve it in one easy stroke of the pen. you go pretending a magic pill is out there. It’s not.

I advocate you look at the problem holistically, but solve it incrementally, where you can, both in terms of available technology, in terms of sphere of influence. There is no “replacement to the internal combustion engine” that can technically do the job (yet), nor can we unilaterally influence “Venzula, Russia, Mexico, Azerbaijan, etc”.

You’ve just illustrated my point wonderfully.

Dan

8

There is no “replacement to the internal combustion engine” that can technically do the job (yet), nor can we unilaterally influence “Venzula, Russia, Mexico, Azerbaijan, etc”.

Exactly!!! Therefore, you can count on continued offshore drilling by a whole host of countries. You can also count on additional catastrophes offshore. The President suspends all future offshore drilling like that is going to make any difference.

solve it incrementally Won’t happen in our lifetime.

9

solve it incrementally Won’t happen in our lifetime.

Really - so Gates, Jobs, and Paul Allen all foresaw and planned the iPhone or Android when they made DOS/AppleI? Technological solutions only mature incrementally. They also happen a lot faster than we think. The PC is still only a generation old …

Forward thinkers in society (and specifically technology) don’t necessarily see the complete path forward when they implement, but they do recognize a path that has potential to provide a solution.

Dan

10

I agree with Dan on all points.

Less than one lifetime ago, 'Lil Audrey’s Grandfather worked ground and planted with horses. Just this weekend, her father said he’d never forget the day the first tractor arrived.

The world has progressed exponentially as a function of cheap energy (perhaps too quickly, as we can no longer feed and water it). Another energy source and another method of exploiting it will be developed within a lifetime.

It may be too late. We still don’t have water enough.

11

I know this is going to sound crazy coming from me but I agree with a much of what you say in your original post. Our oceans are vastly more productive in terms of food, atmospheric regulation, and beneficial uses than the arctic regions. Plus, as you say, it’s way easier to regulate, inspect and clean up land operations than off shore operations.

I would only support it though if the deal did in fact eliminate off shore drilling in exchange for opening ANWR. AND, the deal included raising CAFE standard even more than just happened, AND…get ready for it…Congress included a fossil carbon tax that ramped up over the coming years to further force technological innovation.

AND, heavily incentivizing electric personal transportation (i.e. the Leaf, the Volt, Tesla, etc.) would go a LONG way to cutting into our imports of oil (sixty percent of our total use is for transportation; about 40 percent for personal/passenger use). We have the technology now, it’s proven, we have plenty of electrical capacity at night, it’s safer, cleaner (coal use will decrease when the carbon tax hits), and domestically produced.

In short, I agree, drilling on land is the lesser of the two evils re. offshore vs. onshore but it’s not an excuse to keep shooting oil into our veins. We have to take drastic action to kick this habit.

12

I know this is going to sound crazy coming from me but I agree with a much of what you say in your original post. Our oceans are vastly more productive in terms of food, atmospheric regulation, and beneficial uses than the arctic regions. Plus, as you say, it’s way easier to regulate, inspect and clean up land operations than off shore operations.

I would only support it though if the deal did in fact eliminate off shore drilling in exchange for opening ANWR. AND, the deal included raising CAFE standard even more than just happened, AND…get ready for it…Congress included a fossil carbon tax that ramped up over the coming years to further force technological innovation.

AND, heavily incentivizing electric personal transportation (i.e. the Leaf, the Volt, Tesla, etc.) would go a LONG way to cutting into our imports of oil (sixty percent of our total use is for transportation; about 40 percent for personal/passenger use). We have the technology now, it’s proven, we have plenty of electrical capacity at night, it’s safer, cleaner (coal use will decrease when the carbon tax hits), and domestically produced.

In short, I agree, drilling on land is the lesser of the two evils re. offshore vs. onshore but it’s not an excuse to keep shooting oil into our veins. We have to take drastic action to kick this habit.
**
I would support this if they first:

FORCED welfare receipients to be sterilized, and didn’t allow them to own cars, tvs, cell phones, etc.
FORCED politicians to live in DC all the time and walk/ride bikes to work.
FORCED all government workers (excl military) to live close enough to work to walk or ride to work.
INCENTIVIZED people to work harder by eliminating the minimum wage and limiting unemployment to 8 weeks.

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13

"I would support this if they first:

FORCED welfare receipients to be sterilized, and didn’t allow them to own cars, tvs, cell phones, etc.

Nope, welfare recipients don’t have near the carbon footprints the wealthy do. Their welfare checks don’t allow for xx vacations a year to far off locations and servants that have to drive to their jobs at the huge mansions the rich have out in the country.

FORCED politicians to live in DC all the time and walk/ride bikes to work.

I am totally with you on that one.

FORCED all government workers (excl military) to live close enough to work to walk or ride to work.

Excellent idea. I do it myself.

INCENTIVIZED people to work harder by eliminating the minimum wage and limiting unemployment to 8 weeks."

Sure but you’re going to pay one way or another; prisons and police vs. a living wage. I just don’t like the noise associated with the former.

14

The point wasn’t that reducing the welfare state would reduce the overall carbon impact, but more that if you are interested in FORCING people to do the right thing, that would be a great place to start.

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15

OK, so I re-read your list with the theme stated by the OP; how are any of your items related to the damage caused by oil drilling spills and releases?

I mean I get the whole “make the generals send their kids to fight wars first” thing, but how is punishing the “lazy” poor going to help with oil pollution and fossil carbon?

My ideas at least stayed mostly on task; you just have an axe to grind against “lazy” folks and government officials that don’t believe in the same stuff you do. How is that going to help the environment?

16

… AND, heavily incentivizing electric personal transportation (i.e. the Leaf, the Volt, Tesla, etc.) would go a LONG way to cutting into our imports of oil (sixty percent of our total use is for transportation; about 40 percent for personal/passenger use).

I’d be curious regarding your references here. The latest numbers I’ve seen for the breakdown in fuel usage are:

28% for transportation (gas and jet fuel)
40% for electrical power generation
20% for direct heating
32% for industrial usage

There is some double counting in here, as some of the industrial load is double counted as electric generation, but you get the general idea. Ref. “Physics for Future Presidents” (fun read, BTW).

The problem here, however, is that that transportation is not the huge low hanging fruit. I agree that we should attack it, as there are reasonable solutions available, but it’s only part of the answer.

We have the technology now, it’s proven, we have plenty of electrical capacity at night …

You need energy storage to flatten out the daily load curve. If e-vehicles proliferate, and if the utilities developed an off-peak rate structure for residential usage to incent people to use energy off-peak (it’s in the utilities interest, too), then the “ideal” energy storage devices to control the load factor would be the e-vehicle batteries. They (when more fully deployed) are distributed (good for the transmission and distribution system), have relatively long availabilities when “plugged in” to charge, and could be used to provide energy to the system (called spinning reserve) to aid in regulation. The only requirement would be that they be charged in time to go to work in the morning.

This is an example of what I consider an emerging technology (or a confluence of emerging technologies) pointing towards a real solution.

I want a Tesla, BTW! Cool car.

Dan

17

I dunno, in broad terms I tend to see shrinking supply, at least in this case (oil), as a long-term positive in that it will increase price… we’ve seen it happen several times in my lifespan when gas prices rise sharply people begin to make different transportation choices, companies alter their process and strategies accordingly, etc. Problem is the prices eventually relax and we go back to old habits just the same. For sure there are huge gains yet to be made in alternatives like the electric cars mentioned, but just the basic market dynamics of supply & demand and the inevitable increase in oil costs will help force the issue as much or more than any gov’t policy or intervention (although those have their place as well). I know it’s not entirely apples-to-apples due to spatial differences, etc, but consider the cost of gas in Europe and how much more judiciously it’s used there compared the the US.

To look at it another way, gas is actually quite *cheap *when you measure it in historical context or compared to other staples (like, uh, beer) because so much of the associated cost (environmental, military) is externalized. This disaster is helping to re-focus what some of those costs really are, and IMO gas should me more expensive to honestly reflect this.

18

**"To look at it another way, gas is actually quite cheap when you measure it in historical context or compared to other staples (like, uh, beer) because so much of the associated cost (environmental, military) is externalized. This disaster is helping to re-focus what some of those costs really are, and IMO gas should me more expensive to honestly reflect this. "

Very well said.

My reason for strongly advocating government intervention BEFORE market dynamics hit is that we can control the pain in increments whereas market forces can be incredibly violent and painful. But this concept of small sacrifice to prevent dangerous outcomes is very anti-American it seems.

If you identify the things that pose the greatest risk to future and long term enjoyment of the planet, and we know them intimately- climate change, population pressure, nuclear proliferation, Snuggies… it seems as if we disproportionately spend time and resources worrying about things that might blow us up or kill us violently even if that means spending less or fewer resources on the slow death by a thousand cuts.

I think it’s our nature as humans to fear acute pain over chronic just because the latter means we can glimpse one more day of sunlight, one more breath, one more drink of water before the end. Strangely, getting blown up seems to be really quick and probably the pain is over very soon. But seeing the world die around you, the water and air polluted, the crops withering, the fish dying is an agonizing and torturous end.

19

“The point is to take a real look at the potential consequences of actions. When you disallow responsible development onshore (or in the US), but do nothing to modify the demand, you naturally push the development elsewhere.”

I’m still trying to grapple with the statement above. I mean, here I have dedicated the last 20 years of my life, along with many others, to try to modify the demand. But every day, and every step of the way is stymied by certain political interests. As an example, for many years, these political interests managed to put in place laws to specifically forbid the DOT from even investigating the costs and benefits of increased fuel economy in vehicles. Those same interests then put in place actual incentives for people to buy Hummers. They mock those who try to build market demand for efficient vehicles by being early adopters of those vehicles. I was at a conference last week where a speaker described the tax incentives in Texas. More than 99% of incentives go to fossil fuels, but people rail against the less than 1% that was going toward renewable energy resources. About 100 years ago, socialized support was provided for oil resources to be developed. The majority of these supports were made in perpetuity. Easements for petroleum pipelines (we still separate the nation into PADDs - Petroleum Area Defense Districts. Limited liabilities for any damages. Depletion tax credits. Don’t get me wrong, development of oil resources has provided amazing benefits to society, socialized benefits. Meanwhile, most incentives for non-fossil fuels have clear and regularly occuring sunsets.

So, yes, I agree completely with you when you say that people should be “morally liable for some of the natural consequences of their actions.” I just have a different perspective on where that moral responsibility should lie.

20

OK, so I re-read your list with the theme stated by the OP; how are any of your items related to the damage caused by oil drilling spills and releases?

I wasn’t really addressing the environmental issues, I was addressing your idea of the government FORCING it’s citizens to act a certain way, and INCENTIVIZING certain behaviors.

Living green, reducing your carbon footprint is all good, but if the government is going to start FORCING people to ‘act better’, then there are other areas that I would hope that they would start with. Oh, and they should do all of the things they are proposing BEFORE making the people do it.

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