How do I Stop Offshore Drilling? How, Indeed...

The question recently popped up among available titles for eHow writers at DemandStudio (an assemblage of the most tight-assed control freaks I've ever encountered in my life, but that's a different story): "How Do I Stop Offshore Oil Drilling?"

And it got me thinking: how does the average Joe or Jane stop offshore drilling, presuming of course that's what he or she wants? It's not as if marching around with picket signs in front of that BP office complex on West Memorial in Houston will have any effect - besides, I drive past it twice a day, and I have yet to see an enraged picketer. Is there a way to stop? It's a tough nut to crack, but the way I see it, there are three ways to stop offshore oil drilling and none of them is likely to happen...

First option: Someone - the Federal government or the states - has to prohibit or severely restrict offshore drilling. California has done this for years, spurred into action by a Unocal blowout off Santa Barbara in 1969. The Federal government has likewise prohibited drilling in the easternmost Gulf of Mexico and in Atlantic Coastal waters for more than twenty years, a policy the Obama administration announced would be relaxed only days before the BP Macondo blowout (see image) on April 20, 2010. The rescission of that policy is, as one might expect, now on hold.

Photo from the Christian Science Monitor

Given the "energy independence" talking point loudly bandied about by certain segments of the political spectrum (who seem perfectly content to repeat the lie that the US gets most of its oil from "unfriendly" nations¹), it is highly unlikely that the Federal government has the political will to ban offshore drilling. Some "blue states" in the northeast and northwest may enact new bans on drilling in state waters, but it's highly unlikely that a "red state" would even consider doing so. So the answer to "How do I [emphasis on the "I"] Stop Offshore Drilling?" could well be, "Elect a government that will ban it."

Second option: Enact legislation that makes offshore drilling so expensive that it's no longer a profitable enterprise. Increase the cost of drilling permits or require an indemnity bond so massive that no corporate entity can afford it. Realize, of course, that it already costs several hundred million dollars to drill one of these wells...

The political will question arises again for this option, so see the "Elect a government..." answer again. Unless there are two or three more Macondo blowouts in the next decade, rest assured that this will not happen.

Third option: Make drilling for oil unprofitable by reducing the demand. This is easier said than done, for several reasons. One reason is that, although the US still consumes approximately 25% of the world's oil production, the demand in expanding economies, such as China, is on the rise. Already China has surpassed Japan as the world's second largest economy (after the US) and it shows no signs of slowing. Reducing US consumption may no longer have the desired effect of reducing world output.

Currently, the US imports roughly two-thirds of the 20 million barrels of petroleum and finished petroleum products its citizenry consumes every day (in the neighborhood of 12-13 million barrels). In the US, petroleum products are mainly used for transportation. About two-thirds of all domestically-produced and imported crude oil is refined into gasoline, diesel, and jet fuel. The US transportation sector uses approximately forty-five per cent of its total petroleum consumption in the form of gasoline². What does this mean for so-called "energy independence" that offshore drilling will theoretically create? Well, one thing it means is that switching from incandescent bulbs to compact fluorescents does zip for reducing imported oil, because trifling few US power plants run on oil. Much of that imported oil (or oil produced by offshore drilling) goes straight into the fuel tanks of cars, trucks, trains, buses, and airliners.

It's a long way around to this, I know, but if you want to stop offshore drilling without government intervention (which ain't gonna happen as long as there are lobbyists and corporations can buy all the free speech they can afford), then you have to work to reduce the market value of oil. If you want to reduce the market value of oil, you have to reduce demand. If you want to reduce demand, you have to stop using so damned much of it - all those "yous" out there.


¹ per the US Department of Energy records, the two countries from whom the US imports the most oil are Canada and Mexico, neither of which is on any list of "unfriendly" nations.
² per the US Department of Energy again

Will BP's Tiber Discovery End Oil Imports? Nope.

It’s all over the papers this morning: BP (formerly BP-Amoco, formerly British Petroleum) has officially announced what’s been a poorly-kept secret in the halls of Houston for weeks; a potential three-billion-barrel oil field in the waters of the Gulf of Mexico, 250 miles southeast of the Bayou City. The conservative pundits on AM Radio and FOX will be howling with glee this afternoon; and I can already hear Sarah Palin sitting on that porch with a view of Russia chortling, “I told you to let ‘em ‘Drill, baby, drill!’” A couple more of these, and America won’t have to kowtow to them Ay-rabs or that commie Chavez any more! Energy Independence is upon us!

But before you trade in that Escape hybrid on a new Unimog, maybe you’d better take a deep breath and consider some facts.

Fact 1: BP’s discovery, called Tiber, was drilled in the area known as Keathley Canyon, in some 4132 feet of water. The well penetrated another 35,055 feet of rock to reach its target (Lower Tertiary rocks, if you care). That means the discovery well has a total depth of 39,187 feet – deeper than any current oil production in the world. For reference, the 35,055 feet of rock between the sea bottom and the reservoir is a mile more than the total height of Mt. Everest.

Fact 2: This is the sixth discovery in this “trend” since 2000, including Shell’s Perdido discovery (in 10,000 feet of water) and Chevron’s Jack discovery in 2006. So far, there’s been no production. None, whatsoever – Shell predicts that Perdido development will begin in 2010.

Fact 3: Oil doesn’t just pour into tankers after it’s discovered like cows coming back to the barn at night. It will take billions of dollars of equipment and human talent to produce oil from a discovery this deep. In the case of Tiber, current technology very likely is insufficient to produce hydrocarbons from this depth; necessitating millions of dollars in research to develop this technology. Unless BP and its partners believe they can expect to turn a profit on oil produced from this field and others in the trend, the oil will stay in the ground. Most industry experts predict that the technology for production under these conditions will not be in place for a decade. The industry is well-funded and some of the brightest minds around are at work on solving the logistical problems involved in production at this depth – but until oil prices reach a level where the sale price exceeds the cost to produce a barrel of oil, it’s staying right where it is. Speaking of money, the “street” estimate of the cost to drill Tiber is over $250 million. And here you wondered where those "obscene" profits Big Oil made last year were going...

Fact 4: Energy independence it’s not. The USA imports between ten and eleven million barrels of crude oil every day. At 3 billion barrels and an estimated thirty-year lifespan, Tiber would produce an average of less than 300,000 barrels per day (although that would be front-loaded to an extent). Or, looking at it another way, US total consumption of crude oil averages between 19-20 million barrels/day. At that rate, three billion barrels is slightly less than a six-month supply.

Go forth and listen to your pundits, left or right – and remember that all of them are leaving out facts that don’t support their arguments.