Drill? why?

Discussion in 'Energy' started by Jurginvoncelle, Feb 22, 2010.

  1. Jurginvoncelle
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    Jurginvoncelle Member

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    If all oil goes onto the world market and the world market sets the price, then how can the us drill our own limited supply and guarantee a cheaper price?

    By law, Energy Information Association's products are prepared independently of policy considerations. EIA neither formulatens nor advocates any policy conclusions. The Department of Energy Organization Act allows EIA's processes and products to be independent from review by Executive Branch officials; specifically, Section 205(d) says:

    "The Administrator shall not be required to obtain the approval of any other officer or employee of the Department in connection with the collection or analysis of any information; nor shall the Administrator be required, prior to publication, to obtain the approval of any other officer or employee of the United States with respect to the substance of any statistical or forecasting technical reports which he has prepared in accordance with law."

    So how much oil per capita do we have to produce to get cheap oil?
    Can't tell can we?

    Certainly we can't compete with the "oil producing nations."

    How much should we drill so we can keep it for ourselves or is that illegal as I have heard?

    Can we our oil or does it go onto the world resource market, so it doesn't mater where we got it from?
     
  2. waltky
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    waltky Wise ol' monkey Supporting Member

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    Granny says, "Dat's right - dey need to drill for some more oil...
    :cool:
    POLL: Expand drilling to ease energy crisis, voters say
    03/14/11 - Rising energy prices are prompting support among likely voters for expanding U.S. drilling and releasing oil from the country’s emergency stockpiles, a new poll conducted for The Hill shows.
     
  3. JBeukema
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    JBeukema BANNED

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    Economics Basics: Demand and Supply
     
  4. Mr. H.
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    Mr. H. Diamond Member

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    What is it with this fixation for cheap oil? It has nothing to do with the argument for increased drilling in the U.S.

    It's about keeping the money we spend on the oil that we use within our own borders. More domestic production= less money sent overseas. More jobs, more economic activity, more taxes and royalties to local, state, and federal treasuries. More security from foreign sources.

    Drill here, drill now, pay ourselves for the oil and keep the revenues here.
     
  5. JBeukema
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  6. Mr. H.
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    Mr. H. Diamond Member

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    The last time I drilled a well, it cost about $70k to drill a 3000' wildcat. It was dryer than a popcorn fart. That was about 5 years ago, so let's revisit this...

    A scnerio:

    Let's say Mr. H. drills a successful oil well (hey- I can dream can't I?).

    These days, that 3,000' well would cost about $100,000 completed. Add another $15k for prime mover, flow lines, access roads, separator, storage tanks and walkway. Ok - $115,000 for let's say... a 50 barrel per day well.

    That $115k investment put a dozen drilling people to work. In the process, we bought steel casing, line pipe, and production tubing from the local supply yard; hired water trucks and bought mud for drilling fluid, brought in a logging crew to analyze the well, hired another crew to perforate and another to perform an acid frac.

    All these folks and all these companies earning hard dollars, feeding their families and paying off home mortgages. Their income is taxed of course.

    50 barrels per day. That equates to a fraction of the daily oil usage here in the U.S. But look what I've done in this scenario. At $100/barrel, that's $5,000 per day LESS money that we send overseas for imported oil. $150,000 per month. And this goes on hundreds of times in this country- day in and day out. New wells, new production, new jobs, new revenues, new taxes- RIGHT HERE IN THE U.S.

    And with a standard 1/8 royalty (12.5% of gross revenue), that's almost $20,000 per month to some farmer and his family that leased his ground to us.

    Every bit of it taxed. Income tax, real estate tax (yes, in most states oil production is taxed as real property), sales taxes on equipment and supplies...

    So get your head out of your asses and into the picture.

    Drill here, drill now, make money and oil that stays here.
     
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    Last edited: Mar 14, 2011
  7. Old Rocks
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    Old Rocks Diamond Member

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    Solar has put 7000 jobs here in Oregon in just a few years. Wind, not that many jobs, but steady income for a lot of wheat farmers near the Gorge.
     
  8. Mr. H.
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    Mr. H. Diamond Member

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    That's just Gorge ous.

    I'm curious how wheat farmers play into this.
     
  9. Old Rocks
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    Most of the really good area for wind is currently in wheat production. So you see these mills setting in the middle of the wheat fields. And, like oil and gas, they have to pay the landowner for the use of the land.

    They asked one owner how he liked having five of these mills on his land. He said he didn't like it. They asked him why. He said "I would like to see at least ten there."
     
  10. Mr. H.
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    So then I hope you can also appreciate the fact that the said same farmers (in different locales mind you) also benefit from royalty payments afforded by oil and gas production.

    To take it a step further, you might consider how they are worried about Obama's proposed budget that includes tens of billions of dollars in taxes on that industry which would effect those royalty payments. It truly reaches that deep.

    But the irony here is that Obama said in his State of the Union Speech that we should put a million electric cars on the road and finance it all by taking back billions of tax dollars from the oil industry. Then he says "I think they're doing fine on their own".

    You know as well as I do just how far reaching energy production goes. Right down to the good old salt-of-the-earth American family farmer. Right?

    And if solar power generation were to ever become so successful as to generate profits in the true sense of market economics, then it stands to reason that it too should become fair game for the same such taxes. Right?

    And where would that leave the wheat farmers of Oregon? The wheat farmers who contract to allow solar generation facilities on their land. As opposed to the corn farmers of Illinois who contract to have oil and gas wells drilled on their land.

    Ah but they're different aren't they.

    Now we're subjected to playing the energy card.

    Right?
     

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