Tuesday, July 22, 2008

To Drill or Not To Drill...

The San Francisco Chronicle takes an in-depth look at offshore oil drilling and reiterates what many including, Arnold, have been saying: Yes, there's oil offshore, but even if we open it up today, it will be years before we see a drop of it.

According to the Chronicle:

"If the federal government opened California's coast to drilling tomorrow, the first exploratory wells probably wouldn't be drilled for at least six years, Medlock said. Bringing newly discovered oil fields into full production would take longer.

That means any new oil wouldn't arrive on the market until midway through the next decade, at the earliest. The process is slow enough that the Energy Information Administration, the statistics branch of the U.S. Department of Energy, estimated last year that opening the coasts to offshore drilling would have no significant impact on oil prices before 2030."

The pro-drilling crowd takes the not-altogether-unreasonable position that, given the long lead time, the prudent thing to do is to start the process now as a hedge against future energy needs, should our efforts to develop altenative energy resources fall short of expectations.

While estimates differ on what's actually out there in terms of supply, the general idea goes like this:

"The federal government estimates the nation's outer continental shelf might hold 85.9 billion barrels of crude, including 10.13 billion barrels off California. For comparison, the United States consumes about 7.56 billion barrels of oil per year. The nation's sea floor also could hold 419.9 trillion cubic feet of natural gas, equal to U.S. consumption for 14 1/2 years. But the federal estimates are just that - estimates. "

The only thing that is 100% certain about offshore drilling is that it will be completely politicized by both candidates in the upcoming presidential election, so it's not going away any time soon.

The lowdown on offshore oil reserves [San Francisco Chronicle]