RWB's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/207340/comments http://seekingalpha.com/article/91284-will-drilling-offshore-affect-world-oil-prices?source=feed#comment-233039 233039
This makes Brian Pursley's little burst of outrage even more inexplicable. Menzie Chinn's essay strikes me as reasonable and hedged, and quite willing to acknowledge that there are unknown factors. His engagement with Anon was polite and reasonable. Excellent post.

(For the record, I think we should open the OCS for geo-political reasons and to help our trade imbalance, and in recognition that fossil fuels will continue to be important for decades, even if new technologies being developed now bear fruit. However, there is little that convinces me that production from the OCS will have a significant impact on the price of energy. Still, better to spend that energy dollar here than there, right?)
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This makes Brian Pursley's little burst of outrage even more inexplicable. Menzie Chinn's essay strikes me as reasonable and hedged, and quite willing to acknowledge that there are unknown factors. His engagement with Anon was polite and reasonable. Excellent post.

(For the record, I think we should open the OCS for geo-political reasons and to help our trade imbalance, and in recognition that fossil fuels will continue to be important for decades, even if new technologies being developed now bear fruit. However, there is little that convinces me that production from the OCS will have a significant impact on the price of energy. Still, better to spend that energy dollar here than there, right?)
]]> http://seekingalpha.com/article/91313-is-there-a-future-for-ng-powered-vehicles?source=feed#comment-233010 233010
Also, the infrastructure of public CNG filling stations might be less of a hurdle than you think, as it is possible that appliances sold for home use could allow for home fueling from the natural gas line that already comes to your house (for many Americans).

However, let's also consider this. Right now, we produce about as much natural gas as we consume. We import some. But if a significant portion of our automotive fleet were converted to CNG, our consumption of natural gas would explode. Pickens plan deals with this by taking all those natural gas power plants off-line and replacing them with wind farms. We'd have to do something drastic like that to prevent the cost of natuiral gas from sky-rocketing (more than it already has, that is). Full disclosure--I work for a natural gas E&P company, so skyrocketing natural gas prices would be pretty super for me personally. But for the country, not so super. I bring it up because any large-scale change as advocated here and by Pickens is likely to have some big unintended economic consequences, some good and some bad.]]> Mon, 18 Aug 2008 09:37:05 -0400
Also, the infrastructure of public CNG filling stations might be less of a hurdle than you think, as it is possible that appliances sold for home use could allow for home fueling from the natural gas line that already comes to your house (for many Americans).

However, let's also consider this. Right now, we produce about as much natural gas as we consume. We import some. But if a significant portion of our automotive fleet were converted to CNG, our consumption of natural gas would explode. Pickens plan deals with this by taking all those natural gas power plants off-line and replacing them with wind farms. We'd have to do something drastic like that to prevent the cost of natuiral gas from sky-rocketing (more than it already has, that is). Full disclosure--I work for a natural gas E&P company, so skyrocketing natural gas prices would be pretty super for me personally. But for the country, not so super. I bring it up because any large-scale change as advocated here and by Pickens is likely to have some big unintended economic consequences, some good and some bad.]]> http://seekingalpha.com/article/83379-on-oil-and-its-manipulation?source=feed#comment-196640 196640
America's consumption of oil is not what sets its price. It is a global commodity, and global consumption sets the price. It doesn't matter if we don't get much of our oil from the Middle East--trouble in the Middle East is likely to push futures prices higher worldwide. (And it should be noted that Africa has its own problems with oil that pushes both spot and futures up).

Peter Sterling wrote: "Its idiotic to try and legislate the oil price down. Stop buying oil from overseas first. Develop our own reserves."

Producers will always produce the cheapest oil first. Then they'll produce more expensive oil as long as they can make a profit at the current world price. Right now, there is almost no oil that is basically too expensive to get. But considering the time and capital expenses of developing new fields, and the historical volatility of oil prices, oil producers may be reluctant to dive headlong into more expensive forms of oil (oil sands, oil shales, etc.). So it's not a simple case of "develop our own reserves" solving all our problems. Even if we were to become a net exporter of oil, the oil we consume ourselves would still be priced by the world market.]]> Tue, 01 Jul 2008 12:47:12 -0400
America's consumption of oil is not what sets its price. It is a global commodity, and global consumption sets the price. It doesn't matter if we don't get much of our oil from the Middle East--trouble in the Middle East is likely to push futures prices higher worldwide. (And it should be noted that Africa has its own problems with oil that pushes both spot and futures up).

Peter Sterling wrote: "Its idiotic to try and legislate the oil price down. Stop buying oil from overseas first. Develop our own reserves."

Producers will always produce the cheapest oil first. Then they'll produce more expensive oil as long as they can make a profit at the current world price. Right now, there is almost no oil that is basically too expensive to get. But considering the time and capital expenses of developing new fields, and the historical volatility of oil prices, oil producers may be reluctant to dive headlong into more expensive forms of oil (oil sands, oil shales, etc.). So it's not a simple case of "develop our own reserves" solving all our problems. Even if we were to become a net exporter of oil, the oil we consume ourselves would still be priced by the world market.]]> http://seekingalpha.com/article/82691-we-should-pay-more-attention-to-nigeria-s-war?source=feed#comment-193138 193138
I recall thinking--there are thousands of people onshore living without electricity--no lights, no refrigeration (which also means less safe food and fewer medicines), etc. How much would it cost to build a gas-fired power plant that burned some of this gas flare-off? I understood that some wells in the world were so remote that trying to use the gas was more expensive than just flaring it off. But this was clearly not the case here--these wells were within sight of shore, where people lived in their unelectrified huts.

No wonder they eventually got angry.]]> Thu, 26 Jun 2008 09:03:12 -0400
I recall thinking--there are thousands of people onshore living without electricity--no lights, no refrigeration (which also means less safe food and fewer medicines), etc. How much would it cost to build a gas-fired power plant that burned some of this gas flare-off? I understood that some wells in the world were so remote that trying to use the gas was more expensive than just flaring it off. But this was clearly not the case here--these wells were within sight of shore, where people lived in their unelectrified huts.

No wonder they eventually got angry.]]> http://seekingalpha.com/article/82333-even-democrats-should-support-offshore-drilling?source=feed#comment-190917 190917 Mon, 23 Jun 2008 11:28:49 -0400 http://seekingalpha.com/article/82041-bush-s-new-drilling-proposal-fixing-a-hole?source=feed#comment-189187 189187
I think I was clear that I understand (from direct personal experience) why and E&P company doesn't drill on a lease right away. In fact, there are more reasons than those you state, including inability to marshal enough resources right now (due to capital costs and labor availability) and desire to "tie up" a lease to prevent a competitor from getting it.]]> Fri, 20 Jun 2008 12:00:27 -0400
I think I was clear that I understand (from direct personal experience) why and E&P company doesn't drill on a lease right away. In fact, there are more reasons than those you state, including inability to marshal enough resources right now (due to capital costs and labor availability) and desire to "tie up" a lease to prevent a competitor from getting it.]]> http://seekingalpha.com/article/82041-bush-s-new-drilling-proposal-fixing-a-hole?source=feed#comment-189116 189116
But since this is true, I don't see any problem with the government getting the best deal possible, and charging for undrilled leases, as opposed to letting E&P companies just park on them for (potentially) the entire lease period. This is not a deal that could have been struck in, say, 1997, when oil was cheap. But now that it's expensive, lease-holders--includi... the U.S. government--have a leverage to negotiate (or re-negotiate) a "put-up-or-shut-up" lease. Certainly I'd do that if I were a private landowner negotiating a lease.]]> Fri, 20 Jun 2008 10:55:38 -0400
But since this is true, I don't see any problem with the government getting the best deal possible, and charging for undrilled leases, as opposed to letting E&P companies just park on them for (potentially) the entire lease period. This is not a deal that could have been struck in, say, 1997, when oil was cheap. But now that it's expensive, lease-holders--includi... the U.S. government--have a leverage to negotiate (or re-negotiate) a "put-up-or-shut-up" lease. Certainly I'd do that if I were a private landowner negotiating a lease.]]> http://seekingalpha.com/article/81823-speculators-continue-to-drive-oil-higher-at-risk-of-global-recession?source=feed#comment-187782 187782
I say this as someone who works in the E&P business and would like to see ANWR and the continental shelf open to more E&P. But I think people need to get some perspective on just how little a difference ANWR would make. Maybe ANWR combined with bringing back the 55 mph speed limit combined with much stricter CAFE standards would make a significant difference. But we can't control how much oil is consumed by other countries, so I doubt if there is anything the U.S. alone can do to significantly change the price of oil. ]]> Wed, 18 Jun 2008 12:38:52 -0400
I say this as someone who works in the E&P business and would like to see ANWR and the continental shelf open to more E&P. But I think people need to get some perspective on just how little a difference ANWR would make. Maybe ANWR combined with bringing back the 55 mph speed limit combined with much stricter CAFE standards would make a significant difference. But we can't control how much oil is consumed by other countries, so I doubt if there is anything the U.S. alone can do to significantly change the price of oil. ]]> http://seekingalpha.com/article/81397-the-great-oil-deception-part-two?source=feed#comment-186321 186321 Mon, 16 Jun 2008 09:33:46 -0400 http://seekingalpha.com/article/80919-bp-ceo-three-oil-myths?source=feed#comment-183382 183382 Wed, 11 Jun 2008 11:33:41 -0400 http://seekingalpha.com/article/80647-nationalizing-oil-well-intentioned-but-wrong?source=feed#comment-182358 182358
If Maxine Waters scares you, you are a dolt. She represents the fringe point of view of the Democratic party, and holds little power to push her views onto the country. She does provide handy scary sound-bites for Republicans to exploit, though! At least she's good for something!]]> Tue, 10 Jun 2008 08:45:31 -0400
If Maxine Waters scares you, you are a dolt. She represents the fringe point of view of the Democratic party, and holds little power to push her views onto the country. She does provide handy scary sound-bites for Republicans to exploit, though! At least she's good for something!]]> http://seekingalpha.com/article/80507-is-oil-a-bubble-part-3?source=feed#comment-181820 181820
As someone who supports E&P in Anwar and other currently off-limits areas, I find this kind of talk disengenuous. It skips over the fact that Republicans controlled both houses of Congress and the executive branch for six years--if they had really really cared about ANWAR drilling, they could have forced it through. Especially after 9-11.

For whatever reason, it has not been a high priority for Republicans until now--when it can conveniently be used as a talking point to blame Democrats for high gasoline prices. I don't want to turn this into a political debate, but it seems that if you are looking for people to blame for keeping ANWAR undrilled, you have to look at both parties, not just the Democrats.]]> Mon, 09 Jun 2008 09:46:46 -0400
As someone who supports E&P in Anwar and other currently off-limits areas, I find this kind of talk disengenuous. It skips over the fact that Republicans controlled both houses of Congress and the executive branch for six years--if they had really really cared about ANWAR drilling, they could have forced it through. Especially after 9-11.

For whatever reason, it has not been a high priority for Republicans until now--when it can conveniently be used as a talking point to blame Democrats for high gasoline prices. I don't want to turn this into a political debate, but it seems that if you are looking for people to blame for keeping ANWAR undrilled, you have to look at both parties, not just the Democrats.]]>