Guest post by David Middleton
Donald Trump has promised to roll back regulations and unleash an energy revolution in America — but economists have their doubts about the plan.
The Republican presidential candidate says he will boost America’s economic output, create millions of new jobs, and put coal miners back to work. But the windfalls Trump touts originate from a report commissioned by a nonprofit with ties to the energy industry and whose findings rely on a forecasting model that often overstates the benefits of increased drilling, according to economists who have researched the U.S. shale oil and gas revolution.
The Trump campaign did not immediately respond to a request for comment.
Immigration and trade have dominated much of the policy conversation this campaign season, but the next president will take office at a crucial time for the energy industry. America’s revolution in high-tech oil production has been sidetracked by — and has contributed to — a two-year crude price rout that has bankrupted dozens of domestic energy companies.
While outlining his economic blueprint last month, Trump said that lifting restrictions on oil and gas would increase GDP by more than $127 billion, add about 500,000 jobs, and increase wages by $30 billion each year over over the next seven years.
Those figures come from the Institute for Energy Research, a nonprofit that advocates for a free-market approach to energy. It typically casts fossil fuels as the most economic form of energy generation, promotes research that says green energy jobs are unsustainable, and claims there is an “enormous volume of sensationalized, simplistic and often plain wrong information” on climate change.
[…]
Firstly, it’s impossible to overstate the benefits of drilling more economists…
Secondly, fossil fuels are the most economic form of energy generation; green energy jobs not just unsustainable, they are a boondoggle and a drain on our economy; and there absolutely is an “enormous volume of sensationalized, simplistic and often plain wrong information” on climate change. If this is the “economists” point of contention, they are wrong.
The IER report in question projects the economic benefits of opening up all Federal lands (apart from National Parks and other specifically protected lands) to oil, gas & coal leasing…
The IER study does not actually attribute the gains to a lifting of restrictions, as Trump indicated, but to opening all federal lands to oil, gas, and coal leasing. It is currently barred or temporarily blocked in some parts of the U.S. lower 48, the outer continental shelf, the Gulf of Mexico, and the Arctic National Wildlife Refuge.
The Alaska National Wildlife Refuge includes a barren stretch of coastal tundra known as ANWR-1002. ANWR-1002 is Prudhoe Bay’s next-door neighbor. Geologically speaking, it would almost be regarded as a “step-out” from Prudhoe Bay.
The USGS estimates the P-mean recoverable resource potential of ANWR-1002 assessment area to be in the neighborhood of 10 billion barrels of crude oil. Which means that the oil & gas industry would probably find about 40 billion barrels, if we were allowed to look.
At $45/bbl, 10 billion barrels of crude oil is worth $450,000,000,000… Nearly half-a-trillion dollars. The opening of ANWR-1002, all by itself, would generate a lot of economic activity and the Treasury would collect a lot of royalty and tax revenue. Sounds like a win-win. On top of that, the failure to open ANWR-1002 soon will eventually force the premature shutdown and dismantling of the Trans Alaska Pipeline System (TAPS).
A premature end to TAPS would strand about 30 billion barrels of oil and 137 trillion cubic feet of natural gas under Alaska and its OCS (outer continental shelf).
• The Trans Alaska Pipeline System’s (TAPS) minimum flow rate of about 300,000 barrels of oil per day will be reached in 2025, absent new developments or reserves growth beyond the forecasted technically remaining reserves. An Alaska gas pipeline and gas sales from the Point Thomson field and the associated oil and condensate would provide another boost to oil production and extend the life ofTAPS for about one year to 2026. A shut down of TAPS would potentially strand about 1 billion barrels of oil reserves from the fields analyzed.
Page ix
• For the complete study interval from 2005 to 2050, the forecasts of economically recoverable oil and gas additions, including reserves growth in known fields, is 35 to 36 billion barrels of oil and 137 trillion cubic feet of gas. These optimistic estimates assume continued high oil and gas prices, stable fiscal policies, and all areas open for exploration and development. For this optimistic scenario, the productive life of the Alaska North Slope would be extended well beyond 2050 and could potentially result in the need to refurbish TAPS and add capacity to the gas pipeline.
• The forecasts become increasingly pessimistic if the assumptions are not met as illustrated by the following scenarios.
1. If the ANWR 1002 area is removed from consideration, the estimated economically recoverable oil is 29 to 30 billion barrels of oil and 135 trillion cubic feet of gas.
2. Removal of ANWR 1002 and the Chukchi Sea OCS results in a further reduction to 19 to 20 billion barrels of oil and 85 trillion cubic feet of gas.
3. Removal of ANWR 1002, Chukchi Sea OCS, and the Beaufort Sea OCS results in a reduction to 15 to 16 billion barrels of oil and 65 trillion cubic feet of gas.
4. Scenario 3 and no gas pipeline reduces the estimate to 9 to 10 billion barrels of oil (any gas discovered will likely remain stranded).
Some combination of these hypothetical scenarios is more likely to occur than the optimistic estimates.
Page viii
At $45/bbl, 30 billion barrels of oil is worth $1.35 trillion.
At $2.70/mcf, 137 TCF is worth about $370 billion.
$1.7 trillion sounds like real money to me… And this is just for the Alaska North Slope and northern OCS regions.
The CBO estimates that the full opening of the Outer Continental Shelf (OCS) and ANWR Area 1002 to exploration and production would quickly generate more than $35 billion per year in Federal revenue from lease bonuses and royalties…
On top of that, the BEA estimates that it would also generate more than $24 billion per year in Federal tax revenue…
That’s about $60 billion per year of government revenue… Just from taxes and royalty payments. So, the economic activity which generated those government revenues would have to be at least a bit larger.
If we add up the estimated undiscovered technically recoverable resource (UTRR) potential under the US and its OCS and the Green River Oil Shale, we come up with about 1.3 trillion barrels of oil. 76% of this is currently off limits to exploitation,
At $45/bbl, 974 billion barrels of crude oil (and high grade refinery stock) is worth $43.8 trillion dollars… Almost enough money to totally decarbonize US electricity generation. Even if it took 100 years to find, produce and sell that oil that still works out to $438 billion per year. $438 billion in gross revenue will drive an awful lot of economic activity.
So, what exactly, do the “economists” take issue with?
The IER report uses a method of forecasting called the input-output model, which is frequently used by consultants and government agencies to make projections about the effects of economic activity.
But a number of economists say that model is not well-suited to predicting how more drilling will produce windfalls in other sectors, and academics are skeptical of the method because the results, or outputs, rely so heavily on the assumptions, or inputs.
“This is not academic research and would never see the light of day in an academic journal. The pioneering research … from years ago is rarely employed any more by economists,” said Thomas Kinnaman, chair of the Economics Department at Bucknell University, who reviewed the IER report for CNBC.
Kinnaman said the technical assumptions used throughout the study are not “egregious,”
I wonder if Dr. Kinnaman knows that “egregious” used to mean the exact opposite of what it means today… Let’s assume he’s using the modern definition and IER’s technical assumptions aren’t wrong in any way than he can identify. So, what’s his beef?
but he noted that the paper makes no attempt to weigh the environmental and social costs of opening federal lands against the benefits.
He is taking issue with IER’s failure to consider phony economic metrics in their analyses. I wonder if he endorsed HRC’s fantasyland energy proposals.
Featured Image Borrowed From Econosseur.
I’m sick and tired of “Trump said this…and Trump said that”…and totally ignoring Clinton who says nothing…and when she does, lie about it
The wrong people are telling me to not vote for Trump…….
It’s egregious!!!
Well, Hillary did say she would have 500,000,000 solar panels installed by 2020. That’s 342,466.75 installed each and every day. I wonder which economist approved that plan.
Especially since her plan would cost a fortune because the only way to get that many panels installed is to artificially reduce the cost by imposing a massive government subsidy. Doesn’t sound like growth to me, except perhaps to China who is the leading supplier of solar panels feeding the green monster.
By using the police powers of the IRS, you will take the solar panels and the health insurance policy or be penalized and any refund seized.
And will require, conservatively, the area equivalent to approximately half the state of Rhode Island. But that’s ok, the they will be built in the desert and we know that environmentalists don’t care about desert ecological systems (screw the desert tortoise).
The only economists whose opinion about drilling for oil, I would pay any attention to, are those employed by the oil industry; big oil if you will; really big oil if you must.
Not media or government economists.
Well forget that last one, that’s an oxymoron.
G
@george e. smith,
The “funny thing” is that most oil companies don’t employ economists. Most economic analyses are performed by reservoir engineers and/or geologists.
New U.S. solar power installations this year are set to break all previous records by more than doubling what was installed last year with 16 billion new watts of photovoltaic (PV) capacity.
The total operating solar PV capacity in the U.S. is expected to reach 25.6 gigawatts (billion watts or GW) of direct current (DC) by the end of the year
http://www.computerworld.com/article/3044132/sustainable-it/us-set-to-smash-solar-power-records-this-year.html
solar is unstoppable in the US now…
That’s an awful lot of Chinese imports, both of panels and of the rare earth minerals that China controls.
Solar is “unstoppable.” What happens to the build out when the investment and product tax credits (read subsidies) are close to not being renewed in Congress? The projects slow down and there is much gnashing of teeth and groaning about how Congress is “killing” renewables. All it is is the crony capitalists worried about the gravy trains leaving the station.
Griff; “…Solar is unstoppable in the US now…”
…except when the sun sets.
George:
I’m an economist by training. In my micro-econ and regulation classes, we would learn how to do the analysis to prove a regulation was necessary and have little cost or some gain; AND how to show it was a horridly costly and wasteful boondoggle.
Why?
To qoute the professor:
“You don’t know if you will get a job offer from goverment or a regulated industry, so you must be prepared for both”….
Absolutely true. So now you know why 2 economists can be exactly opposite in their conclusions. For economists, as for lawyers, look at the client or employer to know the result…
Phil writes: “we know that environmentalists don’t care about desert ecological systems (screw the desert tortoise).”
You first. That shell’s there for a reason.
It’s simple. Issue an executive order making it mandatory that everyone, excluding children, install 2 solar panels. That’s over 500,000,000 solar panels right there. If they have nowhere to install solar panels allow them to contribute the cost of 2 solar panels to the government to fund solar panel farms in the desert which will power the grid and industry during the day. At night people will run their houses off their own stored power. Outlaw fossil fuels. Then there will be harmony, peace and understanding. Wisdom will rule the planets and love will drive the stars. Vulcan peace sign out.
I am sorry the US election intrudes on this site, but it is unfortunately inevitable. I bet these academics were democrats.
As has Australian, Canadian, and British politics when ongoing in the last year. Its just that US elections go on so much longer than anything based on the British tradition.
Tom Halla
Yes – because the Australian, Canadian, and British politics matter.
As – much more – does the US politics (Or ‘Who is more disapproved of?’ – 2016).
Few to zero mentions of the Uzbekistan Presidential – well, election/soundings/coup/revolution/conclave or whatever.
Auto
I wasn’t disapproving of politics on this site, if it came off that way.
“I am sorry the US election intrudes on this site, but it is unfortunately inevitable.”
The US election is about as relevant a topic on WUWT as anything else dealing with “climate change”. We are coming to the “fork in the road” on Climate Change policy, and the US election will determine which way we go.
I’m pretty much focused on the Chinese elections myself. Elections in the US don’t really happen, Canadians spend more time on hockey, Australians confuse elections with parties (or vice versa, who can really tell?), Chile is the only country in South America that actually has a clue, Africa is hopeless and the Indian subcontinent is still recovering from Queen Victoria.
So I want to know what China is going to do next, and what Chile is going to do about it 🙂
Unstoppable it may be but you do realize that the candidate has pledged to install the equivalent of 140 GW in four years? That’s roughly 5.5X the current installed capacity … in 4 years. I’m thinking that’s a tad bit unrealistic. I tried to figure out what the world’s production capacity for solar panels is and was generally unsuccessful since the production figures seem to be quoted in capacity rather than # of panels (probably because there are so many different sizes of panels), but, I suspect that the entire world does not have the production capacity to make 347,000 solar panels/day for 1460 days (which is an average and initially, even if she does get elected, that production/installation will not instantaneously occur day 1. Do we have enough trained installers to install 3437,000 solar panels/day (on average)? Where are they going to be installed? Her commercial wasn’t specific about where but it strongly implied residential rooftop installations were the target. I’m interested in an economic analysis of the feasibility of how many homes (and where) these will be installed on. It takes 10-12 panels to reach the typical 5KW (rated not actual) rooftop install, so if we install 500 million panels on rooftops that means that ~50 million homes will get these installs. I hope I’m one, I’d love to get a free install of solar panels. Last time I priced it locally installed it was ~$15K and if i wanted to add offline storage ala Mr Musk’s 7kw batteries that would cost $3500 for the unit, $5K install — another $8500. Interestingly enough the largest manufacturer/installer of solar panels is Solarcity (currently bleeding money for Mr Musk who just bought it). 500,000,000 government paid panel installs would certainly add the Solar City bottom line. Also interesting is that Solar City and Mr Musk are huge supporters of this particular candidate, having contributed substantial sums. Just a coincidence I’m sure.
I also was amused that the candidate named the US, China, & Germany as the three top ‘Clean energy superpowers. The same China that is currently the world leader in CO2 emissions (by a growing margin) and who is actually (as opposed to ‘pledged’ to) opening a coal fired power plant every week, 52 weeks a year and plans to continue to do so for at least a decade.
fat fingered — the 3437,000 figure should be 347,000 – grr
“Unstoppable it may be but you do realize that the candidate has pledged to install the equivalent of 140 GW in four years? That’s roughly 5.5X the current installed capacity … in 4 years. I’m thinking that’s a tad bit unrealistic. ”
Consider the source: Lying Hillary Clinton.
BTW, the next time you watch Hillary debate, know that *everything * she says is a lie. Everything. If her lips are moving, she is lying.
Right. A huge of number of solar panel installers will be needed. In practice, a majority of the promised “green jobs” would be as these glorified roofers. All those new graduates with their “free” college degrees will be sorely disappointed. The candidates economic and energy policies seem to boil down to:
Donald Trump – 4% economic growth, $2 gasoline
Hillary Clinton – 2% economic growth, $4 gasoline
It’s our choice.
347,000?
If the utility basic unit is 20 panels (I accept better information but they are installed as mulitpanel units) and it takes an hour to install a unit, for 160 panels per day, it would take 2170 installers roughly.
The problem is it is stupid.
The cheapest and best energy source is fossil fuels. They doesn’t use valuable resources like steel and rare earths to any extent.
It produces a lot of life giving CO2.
The only energy source that comes close is nuclear (less resources used), while it doesn’t produce life giving CO2 it is cleaner than fossil fuels and has a smaller footprint so it could be argued it is superior..
Renewable energy (solar/wind/hydro) has killed more people and animals than real energy and we have the graves to prove it (in most cases – some bodies haven’t been recovered).
Bill, more power to you (pun accidental). I don’t think reality and Ms. Clinton are on speaking terms.
Energy independence for america.
How sweet it is.
..Hillary’s idea of American “job growth” is to buy 500,000,000 Solar Panels from China ! Gee, what could be wrong with that ??
So basically the political class is trying to turn fossil fuels into an exclusive source of energy for manufacturing solar panels… So if we were to turn into an all solar powered world, how much hexasulfur fluoride (the most potent ghg) would we be releasing annually into the atmosphere?
Is it plausible that in their blind attempt to mitigate CAGW that they end up triggering it?
Sulfur hexafluoride, SF6; an otherwise harmless molecule (in serious contrast to sulfur tetrafluoride, SF4, a chemical monster.
Sulfur hexafluoride, SFl6 is used in eye surgery.
Which one is the high voltage insulator used in high power transformers and such. It has a very high breakdown voltage. I think it is SF6.
Short term memory is on the fritz, but its a something F6.
G
How old school, george . . Short term memory is on the hillary ; )
And since each solar panel will not produce enough energy in it’s lifetime to produce another one to replace it, our civilization will grind to a halt within a decade of shutting down the conventional (coal, gas, nuclear) plants.
Paul Penrose – Do you have data to support your claim that the lifetime energy from a solar panel is insufficient to create another panel?
John writes: “How old school, george . . Short term memory is on the hillary ; )”
So, applying algebra, may we conclude that Hillary is on Fritz? On the Fritz? Fritz is on Hillary? There has to be a scandal in there somewhere…
Well, they will also buy some from politically connected domestic providers and depending on their track record for donations.
You mean like Solyndra? Yes, that went well …
Resourceguy
Well, they will also use taxpayer dollars to subsidize politically connected domestic providers…
There, FIFY
Phil
+8523
Auto
That’s what happens to thought processes under advanced Parkinson’s Disease.
Sorry to all those whose family members and friends have so suffered, but when you’re that sick mentally and physically, you really ought not to imagine yourself qualified to serve as President of the USA.
More likely Hillary has post concussion syndrome and micro seizures from her brain clot induced damage. Do a web search on “Hillary seizures youtube” but be prepared to sort some trash from the decent videos.
IMHO, she has residual micro seizures from her concussion and brain injury, and they are working hard to keep it under control. I would love to know if the reputed diazapam autoinjector in some photos could be validated. It is for seizures.
“Those figures come from the Institute for Energy Research, a nonprofit that advocates for a free-market approach to energy. It typically casts fossil fuels as the most economic form of energy generation, promotes research that says green energy jobs are unsustainable, and claims there is an “enormous volume of sensationalized, simplistic and often plain wrong information” on climate change.”
It sounds like the IER is right on the money with their analysis.
Well, CNBC is not quite as bad as MSNBC, but either could be considered a branch of the Hillary Rodham Clinton for President committee. It is much simpler to subsidise non-productive activities like wind and solar than invest in things that actually produce energy, at least according to academic economists.
At yet CNBC will not blink an eye when claims of massive economic growth from alternative energy “investments” (i.e. subsidies paid for by the taxpayer) are thrown around.
Part of NBC which is owned by GE that makes big electrical things like generators and powerline inter onnect gear… and all the other stuff used to hook up solar and wind…
Considering that oil is used as a weapon against the United States by unfriendly governments, moving to a position where that weapon is less effective is to our benefit. When it comes to the calculus of national survival, more energy independence for us is a net positive both militarily and economically.
America’s November vote will be a vote on whether the country desires to commit energy supply Harikiri by voting for Hilary
or still want to live so vote Trump
“At $45/bbl, 974 billion barrels of crude oil (and high grade refinery stock) is worth $43.8 trillion dollars… Almost enough money to totally decarbonize US electricity generation. Even if it took 100 years to find, produce and sell that oil that still works out to $438 billion per year. $438 billion in gross revenue will drive an awful lot of economic activity.”
Yes, $438 billion per year *is* a significant economic boost. We are going to need a significant economic boost.
The U.S. is currently paying $478 billion per year in interest payments to its creditors, thanks to Obama and the Republican Congress spending like drunken sailors. An extra $438 billion per year from opening up oil and gas exploration would certainly be a big benefit.
An even bigger benefit would be to eliminate the national debt which eliminates these huge interest payments, which can then be spent to boost the domestic economy rather than making our creditor’s wallets fatter.
Opening up the oil and gas exploration and eliminating the national debt would add almost one TRILLION dollars to the U.S. economy.
The national debt is going to sink our ship if we don’t watch out.
All Trump needs to do is 1) approve Keystone, 2) rescind ALL Obama regulations on businesses, 3) approve export of crude & NG, 4) approve no tax but 10% contribution to inner city development zones for repatriated overseas earning! Business will boom, generating jobs, investments & profits!
He needs to open up ANWR ASAP and roll back the regulatory malfeasance that was imposed on Shell in the Chukchi Sea OCS.
and drive off the movie stars, greens, etc and build Dakota Access –
http://www.daplpipelinefacts.com/
Yup! Just remove most restrictions and have a few public discussions about how to go about it properly.
Congress sounds like a good place to do it !
Let the energy market have some agility to respond to demand and (gasp) let free enterprise work.
“and drive off the movie stars, greens, etc ”
Just electing Trump will do that. The movie stars say they are leaving the country if Trump is elected. Just another reason to vote for Trump.
I joyfully volunteer to help them pack. Down here in Texas real-estate agents are already soliciting their listings. If they really want to leave this Republic, I would recommend Cuba. It is a socialist workers utopia and everything is free and everybody is happy, it is always spring time and they frolic naked in the meadows with the Unicorns and Pixies. (The image of Michael Moore “frolicking naked” is, ahh…..”distasteful”.) But…The damn fools have lied about everything else, unfortunately they are lying about this. Too bad.
This is hilarious. I love their caveat at the beginning, essentially that “this report is unbelievable because it was put together by a non-profit with ties to energy.” Well maybe they should have hired Bozo the clown, surely the revisionist nu-age pseudoscientists would believe them then.
I got a kick out of this bit:
Academic journals rarely “see the light of day in” the real world.
“We may need to redefine peer review”. Yup.
Academics should generally rarely “see the light of day in” the real world also.
It’s been a long time since reality saw the light of day in any climate related journal.
Besides they are hidden behind a paywall.
g
How much would you have to talk to energy companies to be counted as having ties?
How much would you have to talk to energy companies to have an informed opinion worth printing?
Bozo the lying clown is busy running as the Democrat nominee for president.
…except she’s serious as a heart attack! There’s never been a more power-hungry and dishonest candidate!
RockyRoad is on to something. Hillary’s energy posture is consistent with being power-hungry: she wants to take away all our power…
The American people will have survival offered to them but will probably vote Clinton instead.
“Western” power, electricity, culture, technology, influence, wealth, going … going … gone
The global language in 100 years time will be a choice between
Mandarin, Russian, Persian, Korean, Arabic, Hindi, Portugese, Spanish, French
Don’t be so pessimistic, I voted for Brexit and sat up all night to watch the results come in. I couldn’t believe how long it took the BBC and establishment commentators to admit defeat.
Trump can, and will win. You have to realise that polls are distorted and misreported to make one think that his chances are hopeless so you don’t bother to vote. Have faith in a better tomorrow. Vote.
SteveT
Ptolemy
“The global language in 100 years time will be a choice between
Mandarin, Russian, Persian, Korean, Arabic, Hindi, Portuguese, Spanish, French”
So – English.
FIFY
English is evolving – takes words, phrases, concepts from anywhere – even textish. Probably from most reasonably-widely-spoken languages anywhere. See Wikipedia [which I can edit, true] – “list of English words ” – a huge number of pages.
In Wikipedia, true . . . .
English is – from its origin – accepting of neologisms. It was a mix of residual British/old Roman, Saxon/Anglisch and Norman French [Scandinavian/Latinate] [all thorough mixes, note].
English changes when ‘something works’ – e.g. textish, or MMORPGs, or – whatever.
If it works, English will use it [‘steal it’].
English is easy to start – Gower’s ‘Plain Words’ has just 850 words, for everything non technical.
English has perhaps [my guess] 2 billion people who speak it as a second tongue, plus at least half a billion who have it as their mother tongue.
The Wiki:
“Besides the major varieties of English, such as Indian English, British English, American English, Canadian English, Australian English, Irish English, New Zealand English and their sub-varieties, countries such as the South Africa, Philippines, Jamaica and Nigeria also have millions of native speakers of dialect continua ranging from English-based creole languages to Standard English.”
And many – not all, true, but lots and lots of – migrants wish to go to the USA, the UK, Australia, Canada, and other English-speaking countries.
It is humbly suggested that none of Ptolemy’s listed languages will supplant this head-start that English enjoys, given English’s flexibility.
Auto – note:
– I work in shipping – which is just one of numerous industries where there is a common vocabulary, which is English (with a few minor modifications).
Realistically – how will a Uruguay business person talk to a Japanese ditto?
Or a Finn to a Kenyan?
Or a Malaysian to a Mexican?
Etc.
Spent 4 months in Singapore and the Malay spoke with the Chinese spoke with the Japanese spoke with the English all in English. Spent two months in Taiwan, and all of the shipyard workers and store owners spoke….English! I was in Bahrain back some 40 years ago at the Moon Plaza Hotel bar. I was sitting between an Arab taxi driver and a Norwegian sailor. We were conversing in……ENGLISH. Curiously, each told me, in a sotto voice, not to trust the other. Good advice! I have a Hindu friend here in Texas from Bangalore, who speaks English very well. We asked and he said that his parents had raised him with English as a first language. What did his parents know that that the Democrats don’t know? Or, are they deliberately keeping the Hispanics from becoming fluent in English?
The calculation was for oil at $45 a barrel. The problem – global demand for oil is increasing by about 1.2 to 1.6 million barrels of oil per day per year. Right now, global oil production is about 96 million barrels of oil every day. By year end 2017, the EIA estimates at oil consumption to be 97.4.
The current surplus of oil will end in a few more months. At which time, given growing demand for oil, the price will climb and it should climb fast back to $100+ a barrel.
The reason for the rapid climb in oil prices is due to the fact that the surplus of oil that exists now caused prices of oil to remain low long enough that drilling and exploration around the world for oil has plummeted. Once oil prices recover, the trend will reverse but it will take about 3 years for high oil prices to once more cause the oil production curve to head in an upwards manner. In the mean time, this will mean increasingly higher oil prices due to the inexorable increase in oil demand coupled with lack of production increases during that period. Indeed, by mid 2017, world oil production will be declining and will continue to do so until higher oil prices have an effect.
In the longer term, what is happening is most oil used around the world is still from large oil reservoirs some of which have been producing for 30 or even in some cases 60 years. Eventually, those large oil reservoirs will run dry. As that happens, it now appears that it will be very difficult to produce sufficient oil given current trends and technology. Of course, some new invention may change things.
Given the above, opening up US oil reservoirs is very timely. For example, if the Atlantic coast was open to drilling, it would take most projects over a decade to produce oil. First the geological data is gathered, then the exploration drilling (which takes more time and planning that most would believe). Then finally, if oil is found, the offshore project is planned, the materials and parts are sources and the project begins to be built. All the above would take 10 to 20 years depending on the water depth.
Opening up some additional areas in Alaska given there is the Alaska pipeline would have a much faster turn around time. Probably 5 or 6 years.
Most people don’t know this but the US oil shale boom is almost entirely on state and private land. The US government regulation has effectively prohibited most shale drilling on Federal land. The EPA has been pushing to add federal regulations and effectively regulate the private and state drilling. If they did this, it would severely impact the US shale oil drilling and production. If Trump were elected and brought the EPA under control. One interesting factoid based on safety and other statistics, federal regulations don’t have the impact of making drilling safer. Under state regulatory authorities, statistics show the regulation is as thorough and more effective in increasing safety. The difference is that the State regulations are clearly written, and the regulatory authorities grant/deny or request more information quickly especially when oil companies use the same construction and drilling plans over and over which they usually do. Permits can be granted in less than a week. For the Federal government, it can take months or even years to get from the request for a permit to actually drilling a well.
I wish you were right about the steep climb to $100/bbl (the current strip barely reaches $52 by the end of 2018) and I think the Atlantic OCS could be fast-tracked a bit quicker than 10-20 years (we have actually learned a lot in the Gulf of Mexico) and I think most large old fields will last longer than many people think (the best place to look for oil is where it’s already been found)… Otherwise, spot-on.
http://lasvegastribune.net/wp-content/uploads/2016/02/donald-trump-thumbs-up.jpg
David Middleton wrote: “I wish you were right about the steep climb to $100/bbl (the current strip barely reaches $52 by the end of 2018) … ”
Keep in mind that the decline of oil prices starting in 2014 and other declines prior to that were not forecast by the strip nor were most rapid increases in the past. I can’t say if my prediction will turn out correct – I guess we will have to wait and see.
As to the time frame of 10 to 20 years for the Atlantic sea coast to start getting any production:
If it is opened to drilling, a very optimistic schedule is:
1 to 2 years before anyone starts getting 3D seismic + 6 to 12 months of processing and analysis.
Year 3 – start leasing of blocks
Year 4 (shallower water) prospect drilling begins probably lasting several years for most prospective areas found on seismic.
If oil is found, year 4 but more likely year 5 could start of project planning (shallower water)
Year 5 to year 6 begin construction of long lead items and permitting of pipelines and etc. Construction begins on platforms,pipelines and other equipment. Year 7 but more likely year 8, platforms begin to arrive, pipelines being built and etc. Everything has to be build from scratch including facilities on shore. Year 8 or 9 start drilling production wells. Year 10, begin selling oil.
Deep water – everything takes a lot longer. Keep in mind that in the Gulf of Mexico, everything is already there including many existing pipelines, refineries and suppliers. Yet, most new projects takes over a decade to flow oil to shore from the time the oil is found.
Not so sure… I’m looking at $57.70-.75 range by late October, with a possible fallback first, to $38.85-.80.
But don’t quote me.
I hope we get just as surprised by high oil prices as we were by the collapse… I just can’t bank on it.
Regarding the seismic… It would already be available if the Obama Maladministration had not roadblocked the seismic contractors for the last 8 years. Once the environmental roadblocks are lifted, The most prospective areas could be covered with a fairly dense grid of modern 2d data within a year. Oil companies would have from the time the data were delivered until the date the bids were due, to interpret it.
First production from the shelf should take less than 5 years from the first Atlantic OCS lease sale, particularly if the shelf blocks have 5-yr lease terms like the Gulf. Exploration of the shelf and deepwater would be concurrent. Deepwater would definitely take longer; but any economic discoveries should be online within 10 years of the first lease sale… particularly if lease terms are 10 years like the Gulf.
Let’s take a look at an example from the early days of Gulf of Mexico deepwater operations:
Shell’s Auger Field, Garden Banks blocks 427, 428, 470 & 471 was leased in 1984 and 1985.
First production was in 1994… 10 years after the first lease was awarded. This was accomplished at a time when deepwater operations were relatively immature and the economic viability was in question, Technology, from seismic acquisition and processing to facilities design, engineering and construction have come a long way since the 1980’s.
David Middleton wrote: “I wish you were right about the steep climb to $100/bbl (the current strip barely reaches $52 by the end of 2018)”
If not for the low gasoline prices we currently have, the U.S. would be in an economic recession. Every increase of $0.80 per gallon of gasoline reduces U.S. Gross Domestic Product by one percent. Every reduction of $0.80 per gallon increases U.S. GDP by about one percent. Obviously, lower gasoline prices are better for the economy than high gasoline prices. I see no benefit to high gasoline prices other than to the stock traders and the oil companies.
@ur momisugly BobG, good post, the one thing you did not mention is the fact that there are thousands of capped wells that have proven reserves and are being held back for a number of reasons Those could and would be put into production at a very good clip once the market makes them viable and without much “exploration” needed. We also need, and desperately so, more pipeline capacity that I believe is currently a huge problem, especially in Canada and other First Nation regions, were the environmentalists have been sadly very successful in stopping or delaying many much needed projects ( In my opinion the First Nations by allowing resorts casinos on their land but no pipelines is the height of hypocrisy )
Not really. Stripper well production has changed very little over the past 25 years.
http://www.eia.gov/todayinenergy/images/2016.06.29/main.png
If people were sitting on shut-in stripper wells, waiting for high prices, stripper well production would have shot up in 2006-2008 and 2010-2014. It didn’t.
They don’t cost much to operate and generate no revenue if shut-in. Furthermore, if you shut the well in, you risk losing the lease.
Right on, thanks. My understanding is trillions of tons of methane have been found on the ocean arctic floors; and needs to be removed before nature releases it; causing a huge problem for the entire animal kingdom; likely much death and destruction. This is true of nearly all other petroleum and metals production. If not taken from where it sits, nature will continue to leach it or move it into
rivers, lakes, oceans, and the atmosphere. Mean petroleum extraction and mining should be encouraged everywhere to minimize toxic leaching from these natural sources and movement of natural petroleum and related into locations causing animal kingdom huge problems with health and sustainability. And the alternate energy sources, appear very wasteful, foolishness, and a boondoggle to date should be left to the market place to decide their future. Having government subsidize energy development instead of letting market forces decide what is best appears suicidal; at least in the long run; probably the short run also in small economies. It is not yet too late to recover from the erroneous and insane direction of allowing the government to so hugely intervene in market forces.
Filtering down or through the voters of these facts to the electorate is questionable. I hope everyone is prepared to figuratively pounce on the Democrats, especially Hillary for their incredible foolishness. She appears to only respond to overwhelming public opinion; which may not get through here on this vital topic. The public has been near totally mislead so far; based on occasional conversations I have had with supposed environmentalists. I can not even get the
governor of my state to acknowledge this foolishness; and get off the backs and stop being an obstructionist of mining and petroleum extraction. 14 years and counting to get a local mining project going; and the state is still screwing around. They are intent on listening to and considering everyone’s opinion, no matter how erroneous. Knowledge and fact does not trump a voters rights based on their actions. Incredible. Erroneous education appears to be a real problem.
U are over simplifying … see here https://en.wikipedia.org/wiki/Methane_clathrate
I went to your wikipedia methane source and looked under reservoir supplies.
It says hundreds of gigatonnes at several geologic locations.
I have not simplified, but summarized; as near as I can tell.
And from the description, most of it could find its way into ocean
water and the atmosphere with time. A real potential long
term problem that can be reduced and used by humanity
rather than threatening our environment; or threatening
humanity much less if a good portion of it is
removed and used before nature releases it.
David Middleton wrote, “First production from the shelf should take less than 5 years from the first Atlantic OCS lease sale, particularly if the shelf blocks have 5-yr lease terms like the Gulf.”
Ah, I don’t think the lease terms work that way. If the term were 5 years, the companies have 5 years to spud a well or (for those others reading who may not be familiar with the terminology it means to start the process of drilling the well). If a lease owner makes a discovery and is working to develop it with an approved plan, the lease gets extended as it does if the lease owner is drilling wells. All of the ultra-deep projects I know of had to have their lease extended in this way given the time it takes for development.
Also, I was wrong on the timing of the lease sale. Having checked the documentation, unless the BOEM lease process was updated, it would probably take 2.5 to 5 years for the government to provide a lease.
http://www.boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Leasing/5BOEMRE_Leasing101.pdf
@Bob G:
Lease terms on the shelf have been 5-years since at least the first area-wide lease sale in 1983. Deepwater was mostly 10-yr lease terms since 1983. Some parts of the deepwater were 8-yr terms; although you lose the lease if you don’t spud a well in the first 5-yrs. BOEM recently shortened the deepwater lease terms.
The BOEM is legally required to accept or reject the high bid within a fairly short period of time, generally less than 4 months.
http://www.boem.gov/Summary-of-Procedures-For-Determining-Bid-Adequacy/
If you spud a well before the lease expiration and it results in a discovery, you can apply for an SOP (Suspension of Production). If approved, you may be granted additional time to bring the well on production. There is no guarantee of an SOP.
In the early days of deepwater exploration SOP’s were fairly common That is no longer the case because the technology has matured.
My first deepwater discovery (2,400′ WD) was leased in 2004, the first well was drilled in 2006 and production from a 30 mile subsea tieback to a shelf platform was commenced in 2009. It would have been on sooner, if not for Hurricane Ike. This would not have been possible in the early days of deepwater exploration.
Ultradeepwater is an entirely different animal. When the Lower Tertiary play was discovered in ultradeepwater, the means to produce it didn’t exist in the Gulf of Mexico.
The first ultradeepwater field to be brought on production in the Gulf was the Chinook Field (8,800′ WD) on Walker Ridge 425 & 469. It was leased in 1996 with a 10-yr term The first well was drilled in 2000 and the discovery well was drilled in 2003, 7 years after the lease was awarded. At this point, Petrobras began design work on a massive Floating Production Production and Storage (FPSO) vessel and applied for a series of SOP’s. The first FPSO in the Gulf of Mexico was delivered in 2010 and commenced production in 2012… 16 years after the lease was awarded. Considering the fact that it was the first FPSO in the Gulf and the first production from a new play, that’s pretty fast.
http://www.subseaiq.com/data/Project.aspx?project_id=124
DM, you cannot include the Green River kerogen shale in your calculations. The resource is there, and a portion is minable and retortable. But for each barrel of kerogen derived syncrude, you need between 3-5 barrels of water. The water isn’t ‘there’ despite the Geeen Eivee being the largest Colorado tributary. Its all already bespoke by the Colorado Compact of 1922, and the whole drainage basin is suffering an annual shortfall of about 1.5 million acre feet below the Compact allotments that are being fully used. Thats why Powell and Meade are so far down. Only if you completely eliminate Las Vegas, LA, and Phoenix could a few million barrels/year be produced.
OTH, to see the Alaskan pipeline fail because of prohibitions on ANWR1002 exploration is the height of foolishness. Its all incremental infrastructure.
There is plenty of water available; the limitation is water infrastructure…
Infrastructure limitations can easily be overcome.
Shell estimates that they could be producing 500,000 barrels per day from the Picenance Basin with a very small footprint using an in situ recovery process…
Assuming a 12-yr lead time to reach the production growth stage, it will take ~30 years to reach 3 million barrels per day. If production continued to grow at a rate of 1 million BOPD every 5 years… Oil shale production from just the Piceance Basin could reach 15 million BOPD by the end of this century.
The hydrocarbon characteristics of the the oil shales of the Green River formation in the Piceance Basin are superior to those of the Athabasca oil sands. The hydrocarbon areal density is about 13 times that of the Athabasca deposits. The Green River hydrocarbons are not technically “oil;” it’s a form of kerogen. But, for or refining purposes, it’s oil. It will be booked as oil, just like the Athabasca tar sand oil is. It’s a high-grade refinery feedstock…
“Kerogen can be converted to superior quality jet fuel, #2 diesel, and other high value by-products.”
The Green River oil shale deposits in the Piceance basin could easily outperform Athabasca within a decade and with a much smaller environmental footprint.
Athabasca oil sands are currently economically competitive with the OPEC basket. Green River formation oil shales are superior, by a wide margin, to Athabasca oil sands. The Green River oil shales would yield 100,000 bbl of 38° API sweet refinery feed per 160,000 tons of ore & overburden. Athabasca oil sands yield 100,000 bbl of 34° sweet refinery feed per 430,000 tons of ore & overburden. The unconventional oil is actually very light and very sweet; the OPEC Basket is actually heavier (32.7° API).
Athabasca is economically competitive now. Green River could be economically competitive now. The only obstacles to US energy security are environmental nitwits, the U.S. government and low oil prices.
A 1981 waterreport is useless. In 1981 Meade and Powell were full. The problem is the past decade or so. Look at the reservoir bathtub rings. The water is NOT there now to support any kerogen shale production.
The Rand report is from 2005. The 1981 report refers to “water available locally in the Piceance Basin in a typical year”…
The in situ recovery process will release much of the water needed to to facilitate production.
http://www.costar-mines.org/oss/30/presentation/Presentation_13-2-Boak_Jerry.pdf
There is no water in the Piceance available. All is taken under existing water rights, though rights are still held by oil companies that have been kept since the oil shale bust of the 70’s.
The Green River shale is a “fools” paradise. Having lived and grown up in and around the Piceance I know of no successful attempt at extraction without first being heavily subsidized. In every attempt made to make the Green River shale profitable the EROEI has always turned out to be less than one.
Claiming the Green River Shale is a viable energy source by any politician, or anyone, is a lie.
Since the Green River Oil Shale has not been open for anything other than R&D demonstration projects since the early 1980’s, there is no way to know how much of the USGS-estimated 1.2 trillion barrels of recoverable “oil” could be economically recovered.
http://pubs.usgs.gov/fs/2013/3115/pdf/fs2013-3115.pdf
Regarding water…
Considering the fact that in-situ development of oil shale would release 1/3 to 2/3 of a barrel of water per barrel of oil, not that much water would be needed if the low end estimate of water consumption for in-situ development was achieved.
David Middleton September 7, 2016 at 11:19 am
ristvan is correct there is no water for such a enterprise. One of two things would need to happen.The climate would have to change to the point that the reservoirs were filled to over flowing. Or you would have to truck water into the area at a huge cost
michael
@Mike the Morelock…
Setting aside the 2005 Rand report which says water wouldn’t be a constraining issue…
From the GAO in 2011…
Since the in-situ recovery process will release 1/3 to 2/3 of a barrel of water per barrel of “oil,” they won’t need very much water if they can hit the low end of in-situ recovery water consumption estimates (1 bbl of water per bbl of oil).
David, the residual water in oil shale is part of the problem when trying to extract the kerogen. Just ask Shell. Unocal did have a large size plant up Parachute Creek years ago and it could only sustain itself using the large subsidies given out by the government. Enormous amounts of land were given to the oil companies in an attempt to extract Kerogen. We have nothing to show for the land given away or for the subsidies paid out using our taxes.
As we are writing this, another company is closing up shop on another failed attempt to find a way to make the Green River Shale profitable as they start the plug and abandonment of wells in Utah. Just another example of the many failures over the past 100 years to make a profit on something that refuses to be profitable.
@ur momisugly SMS,
The economics shouldn’t be up to the BLM. Outside of Marxism, business economic decisions are generally private sector matters.
The Federal acreage in the Piceance has not been open to commercial shale oil development since the early 1980’s. This is a cold, hard fact. The legacy Parachute River plant was the product of failed 1970’s policies and technology.
Recent R&D projects clearly demonstrated that commercial development was possible. This doesn’t mean that it would turn out to be economically viable. It just demonstrates the possibility. Until such time that the Green River Oil Shale is fully open to commercial development for a protracted period of time, through multiple ups and downs of the commodity cycle, we won’t know if it will be economically viable. We will never know so long as the Federal government keeps moving the regulatory goal posts.
So much arguing over local water…
Take the railcars that carry the produced oil to refineries in the gulf, fill them with water from river outflow points (where it goes away anyway) for the return trip… the water doesn’t need to be very clean for the oil process…
If oil sent out by pipeline, put a parallel water pipe in place on the right of way…
Moving liquids is a well understood technology…
The question is how does the cost of developing ANWR compare with the cost of other sources that can now be had due to fracking?
That’s not the question oil companies would ask.
@SMS,
The Green River Oil Shale has not been open to anything other than small R&D demonstration projects since the 1980’s…
The Parachute Creek plant was part of the Jimmy Carter’s synthetic fuels program. It closed in 1991…
Low oil prices and uncertain prospects for being able to expand production will tend to dampen enthusiasm.
Shell and Chevron closed their recent R&D projects after the Federal government halted all new oil shale leasing and made it clear that they would not approve commercial development. So, they shut down their R&D projects and shifted their resources to other priorities.
I would believe that the reason the BLM is holding back on leases is the lack of economics. Chevron has extended leases in the Piceance. They didn’t build a full size plant for good reason; it’s not economic. The same for Exxon, Occidental, and Encana (Unocal).
There are large chunks of the Piceance that have been given to different oil companies to develop an economic oil shale project. Keep in mind, only certain horizons in the Green River hold oil in significant quantities. The Mahogany being one such zone. You have to have the Mahogany in reach to even make a project feasible.
The recent Redleaf, Enfit, and Total projects shut down for economic reasons. No one had any real interest in building a full size processing plant when the price was $100/bbl. If not at $100/bbl then where? The economics were not there. You have to build into your economics the low price model for your project. These companies made the right decision. When the price of oil gets to $100/bbl, you aren’t going to put your money in the Green River. You’ll put it into shale oil like the Eagleford, drilling off shore or secondary and tertiary recovery projects.
The Green River has shown itself to be a money pit for R&D. You would be better off spending your money on bogus climate change studies.
@ur momisugly SMS,
The economics shouldn’t be up to the BLM. Outside of Marxism, business economic decisions are generally private sector matters.
The Federal acreage in the Piceance has not been open to commercial shale oil development since the early 1980’s. This is a cold, hard fact. The legacy Parachute River plant was the product of failed 1970’s policies and technology.
Recent R&D projects clearly demonstrated that commercial development was possible. This doesn’t mean that it would turn out to be economically viable. It just demonstrates the possibility. Until such time that the Green River Oil Shale is fully open to commercial development for a protracted period of time, through multiple ups and downs of the commodity cycle, we won’t know if it will be economically viable. We will never know so long as the Federal government keeps moving the regulatory goal posts.
And no oil company was “given” acreage.
David, the CA and CB tracts still exist. As do the other tracts given away to interested oil companies in the 70’s. These are massive tracts that can generate enough oil shale kerogen to maintain a project if it were profitable. They are not!!!!. If they were, these projects would have been built. That is a fact. Chevron and Encana own two of those tracts still today and they use them to access the gas horizons below the Green River. Because they own the tracts (surface and subsurface) they also own the mineral rights and do not have to pay royal fees.
The Chevron, Exxon, Occidental and Unocal projects were shut down for economics. Each company invested large amounts of money in each of their R and D projects, only to abandon each before they even got started. Occidental dug a deep shaft with a massive concrete head shaft to get to the Mahogany. That concrete head shaft stood out on the horizon of Piceance Creek for years. The Occidental head shaft was a (white elephant) reminder of how subsidies create false economics and generate bad projects. The Occidental head shaft was finally taken down with explosives and is no longer a reminder of how subsidies distort project economics. If either Occidental, Chevron, Unocal, Texaco, Exxon, Shell, Total, Enefit American or any of the other companies could have made a go of the Green River, they would have commercial projects operating. They don’t.
The after affect of Exxon’s pullout from the Piceance was devastating for the small communities that surround the Piceance. That is a fact! Exxon did not pull out because they could not get a commercial project permit. They pulled out because the price of oil was dropping and they weren’t going to spend any more money on a pie in the sky project.
There have been attempts to make the Green River oil shale profitable for a 100 years and it has not happened. And it will not happen. Money will flow to where it can find the best return and as long as the Green River has a EROEI less than one, it’s not going to get any interest beyond that created by subsidies.
David,
A large glut in crude would push down prices below $45 per barrel to the point where only currently producing wells would be economically viable. Therefore, I don’t think your projections are realistic.
In the final analysis, some degree of regulation actually benefits established producers.
but the economic viability also includes the regulatory fees, if they were reduced viability could still be possible at a lower price per barrel.
10 billion barrels right next door to a giant oil field makes sense at almost any price and with almost any regulatory burden, short of the current prohibition.
The opening of ANWR and other Federal lands and waters wouldn’t lead to a sudden glut of oil production. It would take years to exploit these newly opened areas and they would be exploited only as they became economically viable.
However, never opening them isn’t beneficial to anyone.
Consistent, lawful, regulation is good for everyone. Dynamic, unlawful regulatory malfeasance is good for no one. Blocking ANWR and the Alaska OCS to the point that TAPS has to be shut down and dismantled is regulatory malfeasance writ large.
If it takes years to develop, then the calculations are still too rosy.
ANWR would take less than five years to bring on production. The Atlantic OCS could see it’s first production within five years of the first lease sale. However, all of the steps leading up to production would generate economic activity. Geophysical contractors would begin shooting and processing seismic data. From the moment these areas were opened they would begin generating economic activity.
If the areas are never opened up, they will generate no economic activity. In the case of ANWR, not opening it would destroy nearly $2 trillion dollars of assets.
Oil gluts are good for consumers and the economy. It forces the oil companies to look for other revenue opportunities. My favorite: mining the asteroid belt; or looking for oil there. May sound too far out now. But in 20 to 50 years, is a real possibility. It is just too expensive to haul raw materials into space. Only people, their computers, and their tools need to go into space; to keep the cost down or reasonable.
“David,
A large glut in crude would push down prices below $45 per barrel to the point where only currently producing wells would be economically viable. Therefore, I don’t think your projections are realistic.”
I think the price of oil will stay pretty close to what it is now. A lot of wells were shut down because the lower oil prices made them uneconomical, but as prices rise, these wells will be put back into production, which will tend to keep the prices down. The question is at what prices does it become economical for these wells to be put back into production.
The economics of oil production are complicated. Right now the cost of oil is something like the cost of production in North America. Saudi Arabia has the tap turned on wide open and that makes North American oil a lot less profitable.
Based on the above, I don’t think oil will get much cheaper even if we are allowed to drill everywhere. Also, I don’t think the cost of oil is the main thing holding back the economy.
Trump’s projections are probably overblown. On the other hand, if Hillary gets her hands on the levers of power, we are in for a real drubbing. If energy gets a lot more expensive in America, it will hurt the American economy. It will drive out jobs and China will prosper.
The difference between Trump and Clinton is about 1 million barrels per day in US domestic oil production.
http://www.offshore-technology.com/features/featureus-election-one-million-barrels-a-day-at-stake-4900795/
$45 million per day… $16.4 billion per year.
David, I agree largely with what you are saying. Another thing that is not being pointed out is the security aspect, we are still at the mercy of many countries that have no real good feelings towards the west, and our own secure supply would lift that threat from our backs, I believe that is an important point. I hope the dimwits in our current Canadian Government understands that aspect soon but I have my doubts.
Well, it may help Canada…
The socio-cultural damage to the US from imported oil also need to be calculated, in addition to the pure economic arguments. The problem is that 10% of the price of each Saudi barrel of oil comes back to the West in the form of Wahabi propaganda and Wahabi support for subversive activities.
For instance the King Fahd school in London, which is funded by Saudi Arabia, was found to be teaching its pupils that Christians and Jeews are apes and pigs. (This is taken from Korran 5:60 – The Table – and oft-quoted by imams. The reference to People of the Book is a common term for Jeews and Christians.)
They tried to make out that the King Fahd school was purely a diplomat school, but it was not. It was a normal London private school subject to council regulations and Ofstead inspections, that happened to have a lot of Saudi diplomatic pupils. (And the son’s of the UK’s most prolific hate-preacher.)
UK Standard Newspaper report.
The BBC also had a good Newsnight report on Youtube, but have withdrawn it.
http://www.standard.co.uk/news/muslim-school-that-taught-pupils-from-race-hate-textbooks-made-photocopies-after-order-to-shred-them-6655359.html
R
Note that the UK doesn’t take any Saudi oil whatever… we rely on N Sea resources.
Let me guess he also said drilling more wouldn’t lower gas prices. Remember those claims.
Whether or not the benefits are “overstated” is a big red herring. So what if they are? The point is that it is a plus for the economy, whereas what Hilly wants to do will be a big minus. The choice is between going backwards (Hilly) and going forward (Trump).
To me the best thing would be to add a tariff to all non-North American oil. The tariff would be something like $65 (breakeven in the US for most wells) less WTI at the time. So if WTI is $45, the tariff would be $20; WTI at $55, the tariff would be $10. Would basically put a floor on oil in the US, shift production to the US/Canada, encourage efficiencies in the US/Canada and put a very large group of people back to work.
The tariff earnings could go into infrastructure repair. The downside is everyone would be paying for the actual price of oil.
Additionally re-evaluate the regulations and onerous business rules.
Putting a floor on the cost of US energy would have the follow on effect of increasing the cost of all agriculture/manufacturing/export. Who is that going to help?
Yep. As much as I would like to stick it to the Saudis, an oil tariff would be bad for our economy. The only “good” way to increase oil prices is through robust economic growth and increased demand.
Using the government to win in the marketplace is always a bad idea. If you want to win, then out compete them, don’t become dependent on government help that always backfires in the end.
Ralfellis. Wow thanks for the link. Scary shit. We need Trump
The accuracy of economic forecasting is notoriously poor when it comes to these sorts of outcomes. Needless to say opening up increased reserves will keep down or reduce prices of energy. Comparatively renewables become more expensive. The money saved by not supporting renewables will be available to be used in the wider economy. Like China , who is continuing at a frenetic pace in its pumping out of CO2 whilst the rest of the world puts on its CO2 shackles under a Trump energy regime the US could gain considerable advantage over other countries who are tying their futures to ridiculous renewable targets. The future impacts of relative GDPs of countries that follow the China/ Trump energy models compared to those that follow the EU/ UN model will be stark.
China is pumping money into renewables at an increased rate… it has overcapacity in coal plant and is trying to cut back (additionally to reduce pollution).
The position re coal in china has changed massively in only the last two to three years… you cannot now say or assume the old ‘keep on building’ coal China exists…
Trump needs to get the truth about agw and useless green energy to the voters imo. If he does it right he can expose the democrats for lying about the consensus, reexpose climategate,
Reveal miky manns hockey stick fraud, show how the ipcc lied, The truth is easy if he can tell it right. He can’t blame china because it is not true. He must learn then tell the truth.the media will have no choice but to tell the truth.
“Trump needs to get the truth about agw and useless green energy to the voters imo.”
That’s a complicated subject not suited to the type of soundbites one gets in a debate.
The main thing is *Trump* needs to know the truth about the CAGW sc@m, and I think he does, and then when Trump gets in Office, he can expose the CAGW theory for what it is, and he will have the power to take action against those in government who were/are trying to scare us into believing an expensive fairy tale.
Let’s be clear: This is an IER report, not a plan by Donald Trump.
I would think this report is highly optimistic. The potential of the Pacific, Atlantic and Eastern Gulf resources are most likely less than that of the developed Gulf of Mexico, whose output is currently around $30 bn per year. The development of the coastal shelves could be a good thing, but I think we need to keep the numbers in better perspective.
Powder River Coal could certainly be good, but it’s tricky to transport and has a relatively low heat content. The resource is huge; its market demand is less certain.
The ANWR drilling is incredibly important. Right now, Alaska is set to exit the oil business after 2030. Oil provides nearly 90% of state revenues. Without those revenues, Alaska’s economy is likely to face severe pressure, with our estimates of ensuing population loss at 1/4 to 1/3 of the current total. It’s a big deal, but we don’t have a good sense of the resource in ANWR, in large part because drilling is prohibited. Greenlighting exploratory work in ANWR is a no brainer.
Trump’s “plan” is based on the IER report. To the extent that he has a “plan,” this is his plan.
We won’t know what the real numbers are for ANWR, the Atlantic OCS or any of these other areas until we are actually allowed to explore and exploit them.
We do know what the USGS and other Federal entities estimate the resource potential to be and history tells us that the oil industry tends to find and produce 4-6 times as much oil & gas as the the government initially estimated. Alaska’s North Slope has already produced 16 billion barrels of petroleum liquids. Currently developed areas will ultimately produce a total of about 30 billion barrels. The government’s original forecast for the North Slope’s total production was 10 billion barrels. The current USGS estimate for undiscovered oil in the Bakken play of Montana & North Dakota is 25 times larger than the same agency’s 1995 estimate. In 1987, the MMS (now BOEM/BSEE) undiscovered resource estimate for the Gulf of Mexico was 9 billion barrels. Today it is 45 billion barrels.
The MMS increased the estimate of undiscovered oil in the Gulf of Mexico from 9 billion barrels in 1987 to the current 45 billion barrels because we discovered a helluva a lot more than 9 billion barrels in the Gulf over the last 20 years. Almost all of the large US fields discovered since 1988 were discovered in the deepwater of the Gulf of Mexico. In 1988, it was unclear whether or not the deepwater plays would prove to be economic.
Based on the gov’t’s track record, the estimated 116 billion barrels of undiscovered conventional oil under Federal lands is more likely to be 680 billion barrels. That’s close to 100 years worth of current US consumption – And that’s just the undiscovered oil under Federal mineral leases.