Oil Prices going waaaaay up!

The Coffee Shop
1

I saw an article http://uk.biz.yahoo.com/050331/323/ffes2.html

that says there is potential for a spike in oil prices up to $105.00 a barrel. So far we (the US) have been willing to pony up the $2.50-$3.00 a gallon for gas. Would we be willing to pay twice that?

I also saw this article http://seattletimes.nwsource.com/html/opinion/2002225669_murkowski31.html

written by the governor of Alaska. In it he lays out a very positive argument to allow drilling at ANWR. I believe we need to find an alternative fuel source but until that happens I also believe we need to drastically reduce our dependence on foreign oil. If the article is true, and I have no reason to doubt it, why are people opposed to using ANWR to provide our own oil?

2

Are you aware of how little ANWR will affect the global oil supply chain and the price of oil?

ANWR is a very small oil field. A drop in the bucket. The risk is greater than the reward.

3

I don’t care if they drill in ANWR or not, but it’s not a solution to any of our problems. Except maybe corporate profits of oil companies, but they seem to be doing fine right now anyway.

4

Yes but if you read the governors article the amount available could provide the state of Washington ALL of their oil needs for 15 years. He goes on to say that those opposed distort the amount by saying it would only provide enough for 6 months. Thats assuming ANWR is the ONLY source for all of the worlds supply. Not looking for an argument just a better understanding of what risks people feel are there.

5

What is the solution then? I am not being a smart a$$. I just want to know. The public accepting alternative fuels is a looooong way off. Not to say we should not pursue them just we aren’t ready to do so at this time. Have you given up your car yet?

6

There aren’t any “risks” per se. We’ve come a long way in drilling technology. What is represents is even greater.

First off, the oil wouldn’t be on the market for another 10 years even if work started tommorrow.

It does nothing to encourage manufacturers of petroleum driven equipment to develop, market, and sell more economical vehicles. Until the oil companies are told “no” there will be no incentive to cure the real issue.

The money spent for exploration and tapping of these reserves would be better spent on R&D to develop alternative sources of energy driven products.

7

The solution will work itself out in the market.

Why would I give up my car?

8

The public will be forced to alternative vehicles once it makes economic sense to do so…The auto manufacturers aren’t being forced to sell them because there’s no market. However, the day’s of $1/gallon gas are long over. I guarantee there are engineers and managers sitting around conference tables at GM, Ford, Honda, and Toyota rolling out plans for tooking assembly lines up for hybrids and alternative energy vehicles.

9

State of Washinton: 5,894,143
United States: 280,218,971

Ratio WA/USA: 0.021034061

Estimated years for washington: 15
Estimated years for Whole US: 0.315510919

Oh goody! A four month supply!

10

Be careful on both those articles. There was also a major American investment firm that suggested $100 barrel oil.

Personally, I don’t see that happening for a while unless there is a major war or supply disruption.

As I posted on another thread, I’m betting we will see a drop in oil prices to around $30 within the next two years. BUT we’ll see $40 barrel prices as an average for a while. Much also depends on the strength of the dollar. Stronger dollar, lower cost of oil.

As for the Alaska junk, be very careful of Murkowski. There are dozens of books and thousands of articles written about the risks and rewards of ANWR drilling. As thoughtful people, we have to weigh those out. The risk is that there is a real potential for environmental damage to one of the last pristine areas of our country. Some exagerate the threat, but the threat is there. The reward accrues almost entirely to the people of Alaska. Even at the highest forecast projections, ANWR oil would only reduce our price of gasoline by a penny or two. And that assumes that OPEC continues pumping flat out. If they decide to reduce production at the same scale that ANWR produces, then there is no impact on price. It only decreases slightly the outflow of money to OPEC nations. And there’s that huge IF. We don’t know for sure there’s any oil there, or how much is there, or what quality it is.

11

Thanks for the reply. As I try to continue educating myself I appreciate comments like yours. What I do not get though is I have seen pictures of the area in question. It is a barren land with nothing there. It may be pristine but what harm would be done drilling on 2000 acres of an area the size of Colorado?

12

Again that assumes ANWR as the ONLY source. What is wrong with adding to our own ability to supply ourselves?

13

Sure the area is remote and barren of life. However, to tap one of the last stretches of proven reserves for such a little amount sets a precendence and again delays the crux of the issue. We can sit and drill the earth until its dry but until the public is forced to look at alternative measures to curb our appetite for oil industry will continue to provide vehicles that aren’t fuel efficient. it’s time to force the providers of equipment to implement the sesigns that have been sitting on the shelves with dust on them. The technology for almost doubling fuel efficiency standards are in place.

14

Why tap such a remote area? Why don’t we keep ANWR in our back pocket for a rainy day instead of going to the effort of tapping it now? We’re running out of good oil reserves. Why not work the other side of the issue?

15

Again that assumes ANWR as the ONLY source. What is wrong with adding to our own ability to supply ourselves?

I guess the point I was hoping to make was to reinforce that when you consider that:

  • it’s a four month supply for the US
  • it would take the better part of a decade to begin making use of it
  • it would take MUCH more than four months to extract this four month supply
  • as mentioned by another poster, OPEC could adjust their output by a fraction of a percent and completely negate the total output Alaska could generate

The oil in Alaska has virtually no impact on the market.

16

Thanks for the reply. As I try to continue educating myself I appreciate comments like yours. What I do not get though is I have seen pictures of the area in question. It is a barren land with nothing there. It may be pristine but what harm would be done drilling on 2000 acres of an area the size of Colorado?

You may be deceived by spin (done on both sides). When pro-drilling advocates depict ANWR, they show pictures taken during winter, with “nothing there”; this is probably what you saw. When anti-drilling folks depict ANWR, they show photos taken during “warmer” periods, which include the vast number of animals that actually do frequent the area. I’ve heard that many birds that show up in the lower 48 migrate through or two that area. Disrupt it, and the effect reaches our states.

Go here: http://www.anwr.org/backgrnd/birds.htm and look around. Note that this is not an environmental Web site!

17

Great link. Tons of info. You are probably correct the pictures I have seen were most likely in the winter. What else was interesting on that site is an article that says based on geologic indicators there may well be alot of oil available in ANWR. Only some test drilling will tell. I feel it would be worth the effort for some exploratory drilling to know for sure.

18

Outside ANWR page

http://outside.away.com/outside/features/anwr.html

Some pro, some against drilling arguments and articles, plus some beautiful photography…

19

Great link. Tons of info. You are probably correct the pictures I have seen were most likely in the winter. What else was interesting on that site is an article that says based on geologic indicators there may well be alot of oil available in ANWR. Only some test drilling will tell. I feel it would be worth the effort for some exploratory drilling to know for sure.

Aaaarrrrrg! Let me type this very slowly…

  • If the Governor’s liberal estimate of the oil avalable in Alaska is correct, it’s still not enough to make any real difference.
  • There is NO (that means zero) oil in ANWR available to us for the better part of 10 years even if we start drilling like gangbusters right this second.

The trick is not to find more oil. There isn’t enough that can be cost effectively produced to make a real difference anyway. The trick is to reduce the rate that we use oil to the point that the stuff in ANWR represents a 50 year supply for the whole US. That means gasoline use only for shipping and mass transit, if that.

I don’t know why I’m wasting the bandwidth anyway. This is a self-solving problem. At some point, gas will get so expensive that only the very wealthy will be able to afford to own a traditional gas-powered vehicle. What amazes me is that there is ANYONE with analytical ability who can’t see this coming. We should be further along in our development of alternate fuels and transportation. Once it becomes a full fledged crisis (which I think is still many years away) we’ll have several years worth of “disaster mode” until things get worked out.

Get all the oil you can from Alaska, and you’ve made four months difference (for the US only), but changed nothing else.

But one way or another, we will run out of cheap oil, and we will find another way. As usual, we’re going into it blind, ignorant, and with no planning. Hasn’t killed us yet! :slight_smile:

20

I’m really not thick headed:) I do want to understand more about this. Here is another article that appears to dispute what you are saying. In addition check this link out http://www.anwr.org/features/pdfs/ANWR_estimates.pdf and tell me where they are wrong.

HOW MUCH OIL & GAS IS IN ANWR’S COASTAL PLAIN?

High potential. The high potential for significant discoveries of oil and gas in ANWR has long been recognized. Early explorers of the region at the turn of the century, found oil seeps and oil-stained sands. However, since ANWR was established in 1960, exploration in the region has been restricted to surface geological investigations, aeromagnetic surveys, and two winter seismic surveys (in 1983-84 and 1984-85). No exploratory drilling has been accomplished in the area except for one well commenced in the winter of 1984-85 on Kaktovik Inupiat Corporation and Arctic Slope Regional Corporation lands southeast of Kaktovik on the Coastal Plain.

Location to big finds. Although little oil and gas exploration has taken place in ANWR, the Coastal Plain is believed to have economically recoverable oil resources. The Coastal Plain lies between two known major discovery areas. About 65 miles to the west of the Coastal Plain, the Prudhoe Bay, Lisburne, Endicott, Milne Point, and Kuparuk oil fields are currently in production. Approximately 1.5 million barrels of oil a day are produced from these fields, representing 25% of our domestic production. To the east of the Coastal Plain, major discoveries have been made in Canada, near the Mackenzie River Delta and in the Beaufort Sea.

U.S. Geological Survey - 1980. In 1980, the U.S. Geological Survey estimated the Coastal Plain could contain up to 17 billion barrels of oil and 34 trillion cubic feet of natural gas.

U.S. Department of Interior - 1987. After several years of surface geological investigations, aeromagnetic surveys, and two winter seismic surveys (in 1983-84 and 1984-85), the U.S. Department of Interior (DOI), in its April, 1987 report on the oil and gas potential of the Coastal Plain, estimated that there are billions of barrels of oil to be discovered in the area. DOI estimates that “in-place resources” range from 4.8 billion to 29.4 billion barrels of oil. Recoverable oil estimates ranges from 600 million barrels at the low end to 9.2 billion barrels at the high end. They also reported identifying 26 separate oil and gas prospects in the Coastal Plain that could each contain “super giant” fields (500 million barrels or more).

**U.S. Geological Survey - 1998. **The most recent petroleum assessment prepared by the USGS in 1998 (OFR 98-34), increased the estimate for technically recoverable mean crude oil resources. (See Oil in the ANWR? It’s Time to Find Out!)

Only drilling will tell. The geologic indicators are very favorable for the presence of significant oil and gas resources in ANWR, but the limited data means that there is a high level of uncertainty about how much oil and gas may be present. Consequently, current estimates represent the best scientific guesses. However, most geologists agree that the potential is on the order of billions of barrels of recoverable oil and trillions of cubic feet of recoverable gas and that these resources may rival or exceed the initial reserves at Prudhoe Bay. The validity of these estimates can be proved only by drilling exploratory wells. Authorization for exploration must be given by Congress and the President.

In 1996 the North Slope oil fields produced about 1.5 million barrels of oil per day, or approximately 25 percent of the U.S. domestic production. However, Prudhoe Bay, which accounts for over half of North Slope production, began its decline in 1988, and no new fields have yet been discovered with the potential to compensate for that decline.