Energy Tomorrow Blog
Posted March 16, 2012
Yesterday President Obama gave a campaign speech centered around energy policy. In it he said:
“There’s a problem with a strategy that only relies on drilling and that is, America uses more than 20 percent of the world’s oil. If we drilled every square inch of this country -- so we went to your house and we went to the National Mall and we put up those rigs everywhere -- we’d still have only 2 percent of the world’s known oil reserves. Let’s say we miss something -- maybe it’s 3 percent instead of two. We’re using 20; we have two. Now, you don’t need to be getting an excellent education at Prince George’s Community College to know that we’ve got a math problem here. I help out Sasha occasionally with her math homework and I know that if you’ve got two and you’ve got 20, there’s a gap. (Laughter.) There’s a gap, right?”
Posted March 5, 2012
Posted February 29, 2012
Posted February 28, 2012
Posted February 10, 2012
Posted January 31, 2012
“…tonight, I’m directing my administration to open more than 75 percent of our potential offshore oil and gas resources.” - President Obama 2012 State of the Union
So, 75 percent – that must be good, right? Well, not exactly. Let’s take a look at what the Proposed Outer Continental Shelf Oil & Gas Leasing Program 2012-2017 actually provides:
Posted January 25, 2012
Yesterday, we looked at the time it takes to produce oil on federal lands, now let’s look at offshore. As you can see from the chart below, just like on land, it takes time. In general, from purchase of the lease to first production can take anywhere from 7 to 10 years in areas that have existing infrastructure. In this context, the timeline for OCS exploration and production can include:
- Six months to a year for MMS administration and execution of lease sales in unleased areas.
- One year for preliminary geological investigation and selection of areas of interest for additional seismic data acquisition.
- One year to two years to acquire and to process 3D (and new wide azimuth) seismic data, and to identify drillable prospects from this data.
Posted January 13, 2012
Policies have consequences – in the graphic below from API’s 2012 State of American Energy report, the consequences of the 2010 Gulf deepwater drilling moratorium are manifest: more than $21 billion in investment dollars lost and the departure of drilling equipment to other, more hospitable, venues.
Posted January 11, 2012
Policies have consequences. Certainly, we’ve seen economic impact in the 2010 decision to halt deepwater drilling in the Gulf of Mexico and the subsequent slow pace of oil and natural gas permitting. A new study released by API underscores this:
The effects of the deepwater drilling moratorium and subsequent permit slowdown have already reduced total capital and operating expenditures in the Gulf of Mexico by a combined $18.3 billion for 2010 and 2011 relative to pre‐moratorium plans. Since April 2010, eleven deepwater drilling rigs have left the Gulf of Mexico. These rigs have gone to countries such as Brazil, Egypt and Angola. Through 2015, the investment in other regions instead of the U.S. associated with these rigs is estimated to be over $21.4 billion including drilling spending and associated project equipment orders, even accounting for the portion of equipment that will likely be manufactured in the United States. As a result of decreases in investment due to the moratorium, total U.S. employment is estimated to have been reduced by 72,000 jobs in 2010 and approximately 90,000 jobs in 2011.
Posted November 11, 2011