Obama, McCain and Offshore Drilling 42 comments
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While preparing for an MSNBC interview recently about the presidential candidates' energy plans, I was struck by how similar they are. They are both in favor of reducing carbon emissions, they both want more wind and solar power, they both favor clean coal technologies, they both like cap-and-trade systems to reduce greenhouse gases, and they both want to see more nuclear power. Of course, they differ on degree and implementation on some of these issues. John McCain would rely on market forces and incentives. Barack Obama prefers more government mandates.
Until very recently, one critical difference was where they stood on offshore drilling. Obama was opposed to it. McCain is in favor. Obama stressed that oil companies already hold leases to 68 million acres of land and 40 million acres offshore. He said he would force them to drill in these areas or lose their rights to do so. However, McCain thinks it is better to let oil companies drill where the oil actually is. He has called for lifting federal restrictions on drilling in the Outer Continental Shelf.
But now Obama has changed his tune. Last weekend, he indicated a willingness to compromise on offshore drilling. Some have criticized him for changing his mind. I applaud him. Obama is moving from idealism to reality on this and other key issues. Even the Wall Street Journal applauded Obama this morning for backpedaling on his threatened tax increases. Apparently his advisors have told him that tax increases (even if they are intended to hit only the rich) can indeed slow the economy. That's not a particularly good idea when unemployment is rising and recession is a real possibility.
John Maynard Keynes once said, "When the facts change, I change my mind." Facts haven't changed, but it is encouraging to see that Senator Obama shows a willingness to change his mind as he becomes more familiar with the facts.
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This article has 42 comments:
> jack
However there is no technology that can replace all of the uses for crude oil altogether, and if we waste our domestic resources trying to lower the price of gasoline simply so we can drive our 8mpg Suburbans at a low price for a little longer, we'll have no domestic sources to tap when the real crunch-time comes. And it is coming, its just a matter of time.
When the Saudi's have the prudence to intentionally leave some of their oil fields untapped to secure oil production for their future generations, should we be asking the same questions of ourselves and our domestic production? Why do we want maximum exploitation of our domestic resources? If our concerns are energy security, should those concerns not extend into the long term?
I'm assuming you are arguing against progressive taxation here. Valid or not, the fact remains that progressive taxation is likely to remain in some form or another (as it does under the Bush tax cuts) no matter who is elected, as it has for the last 100 years. Does that mean this country has been essentially socialist during that time? Or do you define this 'redistribution' as occurring only at a certain threshold gradient across tax brackets (in which case I assume you define Obama's policies as meeting this, and Bush's policies as not)?
Obama is VEHEMENTLY OPPOSED to both offshore oil and gas exploration and nuclear powered reactors to generate electricity.
His so-called "change of heart" on exploring the OCS for oil and gas will come with conditions that are impossible for energy exploration and production companies to meet. The only reason he's even saying he's for this is because 80% of Americans favor it. One of his first actions as president would be to REINSTATE the executive order abandoned by President Bush BANNING offshore exploration. The next will be to reinstate President Carter's anti-energy WINDFALL PROFITS TAX on these companies (and spend the money on God knows what!), which was and will be a complete disaster for oil and gas production.
But you don't have to take my word for it. Anyone who doubts this can simply WATCH the Congressional debate on this issue during the next three weeks on C-Span. Maybe the would be Messiah will even make an appearance himself, but I doubt it. (Since he didn't deign himself to visit wounded GI's in a German military hosital, it's obvious he doesn't have much taste care for controversy.)
You stealth Greens and Obama apologists take the cake, you know that!
Why don't we give the lease back to the MMS? Because 90% of the cost of the lease is front loaded, so the variable cost to hold it is relatively cheap. One never knows if drilling conditions will change, so why give up a poor asset if there's a chance it will be worth something later?
What is known, is that the eastern Gulf of Mexico has abundant oil and gas reserves, so much that if it is opened up, I can guarantee that my company's leases won't get drilled in the next decade. We'll have paid millions to the MMS for nothing, but then I guess we'll never have to worry about paying 'windfall' profits tax....
Let's see...
The "Surge" was wrong. No, it's right.
Domestic oil and gas exploration won't produce additional energy. But now it will.
We need higher taxes to improve our economy. No, they'll hurt.
Just what we need in a President!
The energy picture of the future for the US and many other countries is more nuclear and a lot of renewables. Why nuclear? Because in reality it is the most flexible energy resource, in the sense that it can supply the 'extra energy' needed to make the other energies function as desired.
Nuclear energy is great for electricity. No one disputes that. Unfortunately, thanks to the Democrats, their ridiculous regulatory schemes and the environmental lobby, we can't build them here.
As for transport, NG is the only short term, mid-term or (possibly) long term answer. We have a 100+ year domestic supply, and the potential of gas hydrates is virtually unlimited beyond that.
Out of curiosity, who do you ascribe to being the "leading academic energy economist?" I didn't catch his/her name in your post.
OPEC pleads: Stop overpumping. OPEC President Chakib Khelil called on members to stop exceeding the cartel's set quota - a move that would reduce supplies by 520K barrels a day. "It's definitely a defensive measure to keep prices above $100," an energy analyst said, calling the move a bit of a shock. OPEC kept its production quota unchanged at 28.8M barrels/day. Crude futures gained as much as 1.5% overnight, but are flat at 6:15 AM
Are you saying that the Dem's are responsible for the NRC? If so, I would seriously consider taking a look at the NRC's website, and the approval process for a nuclear reactor, including design certification and standardization.
The NRC routinely finds minor problems with the 104 operating reactors in the US, and has found material problems in a number of reactors. I would point in particular to Palo Verde #3 which had numerous emergency system failures that went unaddressed for months, and to Davis-Besse which suffered significant reactor vessel head degradation.
www.nrc.gov/reading-rm...
www.nrc.gov/reactors/o...
The NRC has indeed done a great job ensuring safety, but they do this only at great lengths, including assigning on-site inspectors to every reactor, and having a very lengthy certification process for new reactors. Some may argue that these regulations are too complicated, but they also are the reason we have had no major nuclear accident.
Generally speaking, the public's aversion to nuclear power comes more through a misunderstanding of the term 'radiation' such as what followed in the 3-Mile Island incident. This unjustified fear of 'radiation' in general, without understanding the types or strengths, is the same reason there is great fear of a 'dirty bomb' even though the practical consequences of casualties and decontamination have been modeled to be relatively benign.
Those issues aside, there are still strong reasons to support more nuclear power. However, I am somewhat baffled by your statement about the eco-radicals as their opposition to nuclear power has greatly softened in the last 10-15 years, as most dramatically demonstrated by Patrick Moore, former founding member of Greenpeace and now nuclear power advocate.
www.washingtonpost.com...
en.wikipedia.org/wiki/...
Second, Germany, with a solar-climate similar to Seattle, with 2/3rds of its day's overcast, generated vastly more solar power than any other country in 2006; more than 4.5 times the US, which has much more favorable locations for solar power.
en.wikipedia.org/wiki/...
Finally, with regards to the so-called 'clean coal' technology, which is Integrated Gasification and Combined Cycle (turn coal into a gas, burn it in a turbine) and eventually Carbon Capture and Sequestration, there is no real advancement on this front. I should point out there there is only one operating IGCC plant in the US (without CCS), and it was built in 1995. There are very few new IGCC's under construction (I know of one), so for all the ACC's advertising on CNN, they are doing very little to demonstrate their "commitment to clean coal."
en.wikipedia.org/wiki/...
I find it particularly interested that Peabody spent something like 10% of their revenue on lobbying efforts while a company like Exxon only spent 1%. It could be said that this paid off well, as WV went to Bush in 2000 and 2004 after 6 out of 8 of the last elections having been a blue state.
No one thinks that wind and solar are complete answers. But they are source of energy that 1) have dropped dramatically in terms of capital and O&M costs over the last 20 years, unlike nuclear and 2) have zero fuel costs. This will have to be combined with nuclear base-load, which generally cannot provide regulation, and NG simple-cycle CT's, of which we have plenty, and many more NG combined-cycle units to replace conventional coal units as they are retired. Add to this some storage capabilities of both new and old technologies, and you have a plan for a grid for the future. And yes, you can make solar and wind eventually work without tax credits, in some markets already.
I think most people are OK with some redistribution of wealth. We have to pay for common goods and services such as police, fire, defense, infrastructure. What bothers me is redistribution just because I have more of than someone else, particularly when that somone else will do nothing for themselves. We have in this country a culture that is radically dependant upon government mandated transfers to themselves. They refuse to do anything to help themselves. We saw evidence of this in the aftermath of Hurricane Katrina. While residents of MS and AL united to rebuild their communities, some residents of NOLA wanted to know what the government was going to do for them. Then, you have the redistribution of wealth that benefits illegal aliens at the expense of tax-payers, and this is going on while the recipients of Congressional generosity insult, defame, and plot crimes against the same source of that largese - the American Union and it's citizenry.
Thanks for your thoughtful post. I don't know where to start, but I'll try.
YES, we are over-regulated, and it's not the doings of the Democrats entirely. But they are the main culprits.
1. The Alaskan pipeline was built in 3 years and sending oil to the U.S. Today's estimates for a simple 80 mile spur to ANWR and production there are 8-10 years. Why is that?
2. We can't even COPY a French nuclear reactor, although they've never had an accident. We have to start from scratch, which will take 10-20 years to get one built and running. Why is that?
3. The D's have made it so than rather get a single NEFPA, you need one for EVERY STAGE of energy exploration and production. We're lucky anything in the energy sector gets built AT ALL, much less worry about our "crisis!"
4. The accompanying environmental lawsuits (over nothing!) are endless, courtesy of the Democrats in Congress and their handmaidens, the environmentalists and trial lawyers.
5. Thanks to the Democrat congress, the government cannot even publish the PROPOSED regulations for the extraction of oil shale in the Rocky Mountains, as a result of a stealth clause they inserted in last's year's budget resolution.
Either you are unaware of these canards, don't care or are duplicitous in them. Either way, we both get to pay for them. As for me, I'll keep on clinging to my "guns and religion," thank you.
> jack
I have problems with both Obama and McCain on energy. Obama has the ridiculous position of a windfall tax on the oil companies. I believe the oil companies HAVE ripped off the taxpayer with the greedy play to get out of paying the Gulf royalties on what everybody pretty much agrees is a technicality, but I do NOT think taxing profits is the solution to that.
But I simply do not like the shallow way McCain thinks. We need A LOT to happen A LOT sooner than just more drilling, and without a SUBSTANTIAL alternative energy investment RIGHT NOW, we are screwed.
The non oil alternatives (including tight gas) are far more viable in the short run than oil drilling.
Maybe it's his military background, but McCAIN thinks at such a tactical level on virtually every issue. From the surge (vs not starting the war in the first place), to the economy, to energy, it is a focus on taking the hill rather than winning (or avoiding) the war
He and Obama are EXACTLY alike in that regard. 20/20 HINDSIGHT!
People are working on their own toward solutions because our government has been witless. All that money (borrowed from abroad) to wage war for control of Middle East and Asian oil, and no tax credits or other support for our initiatives. Trillions on our great-grandchildren's credit to provide socialism for the Wall Street connivers, and for the rest of us, You're On Your Own.
McCain and Palin want to just drill, drill, drill for expensive-to-recover small amounts of oil that will be sold to the highest bidder in 2030, which won't be us because the country has no money left, and nothing to heat and air-condition buildings or get people and goods from one place to another.
I could rant on, but I've got to get back to work. All those expenses that keep going up and up.
Let us vote for McCain/Palin and throw Obama/Biden/Pelosi/ out and get this country moving again!
Tim Miles should move to Russia or China since he seems to be enamored with communism a.k.a. socialism. I feel sure he is a Dim-wit-O-crat!
If half of you guys had a clue as to what it takes to explore, lease, drill, and pipeline or transprot crude and gas to a refinery or gas processing plant, process it, and then bring it to the end consumer, you might be qualified to expound your positions. Instead, you sound like a bunch of inmates in an asylum!
If big oil is such a rip off, why don't you make yourselves rich by buying oil company stock. Better yet, just come up with several million dollars to risk drilling a hole in the ground and hope you hit oil or gas. Of course if you don't, you will be out the expense of plugging the well. And then, the worst case scenario is getting a good enough show of oil or gas to entice you to spend money trying to stimulate the well (fracturing can run into hundreds of thousands of dollars), and then having to realize it is not a commercial well.
It is not cheap to complete an oil or gas well either. Well head equipment, water and gas separators, heater treaters, tank batteries, and treating chemicals do not come cheap.
There are more broke oil men than there are millionaires!
The oil traders or speculators are the ones who cause oil prices to go higher. However, for every one that makes money, another one is on the losing end.
Corn was exempted from speculators by law (Gerald Ford was duped into introducing this legislation). Corn prices have fluctuated wildly every since. Even the corn growers who wanted the bill passed now admit it was a bad mistake, and would like the law repealed.
A free market system benefits us all. Idiots in government screw up every thing they touch!
No, we don't start from scratch. We standardize designs, then we approve the implementation of those standardized designs. A good example is the Westinghouse AP1000. You must also realize that the suppliers for many of these designs are limited in their capacity, such as AREVA, the French manufacturer, is tied up on high-pressure large casting for most of France's build-out / replacements AFAIK. Also, consider that when you site a nuclear plant, you must have adequate water flow for cooling, and you must perform fault line studies (can't have an earthquake). All of the welds must be inspected and done to a very high level of quality. All of the materials are of a much higher quality than in a coal plant. And the only entity that will insure a nuke plant is the US Gov't; apparently no private company wants the risk.
"the CCT program includes more than just IGCC projects,"
Well, the website isn't updated, but AFAIK, the FutureGen plant funding was all canceled. Scrubbing technologies (SOx and NOx control) are NOT clean coal, its just less-dirty; we should already be scrubbing all the coal, but thanks to the invalidation of CAIR, we have those scrubbers installed on many plants in the Eastern US, but not running and instead the flue gases are flowing unscrubbed out by-pass ducts. Meanwhile the utilities that sunk capital into those scrubbers can no longer participate in the cap-and-trade system that would have allowed them to recover much of that cost through selling allowances.
So the only 'clean' coal is CTL (which has a terrible EROEI) and IGCC. I was not referring to TECO Polk County (which I believe previously was not up-rated to a commercial size?), but to Wabash River Repowering in Indiana which was started in 1995 and still in use today.
You know that element mercury? The one that's proven to be highly toxic? It comes out of those coal stacks, and we were position to do something about it, until that same DC court invalidated CAMR.
I'm realistic; I understand our gen-stacks and their mix of coal-fired gen. I've also been on-site at coal plants and seen how dirty even the most modern emissions-controlled conventional coal plant is. And to think that we aren't running out of coal? Not exactly true; we have a lot but its getting harder and harder to get to in the East, where the good stuff is; the stuff that has a high BTU content. Yes there is lots of PRB coal in Wyoming, but it has poor heat content, and it trades such relative to the Appalachian coals. In fact, natural gas on a BTU basis is actually potentially cheaper than CAP or NAP coal on a clean-dark spread right now, due to the metallurgical demand for high BTU-content coal for coking purposes.
CCS; well you can debate it, but I'm not even talking about that here. Simply put, coal is a complex hydrocarbon, and when you burn it, you are certain to release a ton of by-products. This is not the case with natural gas (not nearly as much so), or with fuels like wood gas (coal gasification), hydrogen, etc. NOx, SOx, ozone, mercury, particulate matter / fly ash; its all spewing out of these plants. They'll continue to make up our gen fleet for now, but its a fallacy to think we can continue to lean on coal for base-load forever, unless you want every city to look like Beijing.
-how should we USE our domestic resources in the most prudent way?
-how should we ration our domestic resources for future generations?
I should also mention that France is getting ready for their next round of nuke build-outs, and that right now the time-tables are 2020-2030, which is quite similar to the US.
www.world-nuclear.org/...
www.nrc.gov/reactors/n...
Nuclear power is interesting but probably not practical as a source of large amounts of new power. Nuclear power plants are fantastically complex, take years to site, design and build. I don't see how we could build enough nuclear plants to do much more than replace the plants that will be retiring in the near future. The trend is for nuclear plants to be more and more expensive. This does not bode well for the nuclear industry. Breeder reactors are a dream that has not materialized. People keep mentioning them as if they are ready to go, just waiting in the wings. If only the liberals would let them be built. Reminds me of the stories about the carburetors that allow cars to get 100mpg. If only (big oil, Detroit, other bad guy) would let them be produced. Some test reactors have been built. They were too complex. Not going to happen. Thorium reactors are also promising (lots of Th around) but to date nothing has been commercialized.
Energy independence is a fun slogan. It will happen pretty soon. Not because of more drilling here but because the oil producer states will one-by-one stop exporting. This happened to North Sea oil a few years back. This will happen to Mexico in two or three years. If Mexico is not a failed state now it might soon be one. Won't that be fun.
Methyl Hydrates buried in the outer continental shelf contain vast amounts of methane which we don't yet know how to use. This is buried ice, it is not pumped out. Currently it needs to be mined which is not practical on a large scale. Disturbing the buried deposits might lead to sudden releases of enormous amounts of methane into the air.
The most accessible new energy source is conservation. We waste vast amounts of oil, mostly in transportation. Cutting back on that waste at 5% a year would greatly reduce out need for imports, for a while.