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| Drilling for Oil - The 10 Year Myth! | |
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| Tweet Topic Started: Jul 16 2008, 10:17 AM (514 Views) | |
| Mr Gray | Jul 16 2008, 10:17 AM Post #1 |
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OK guys, I don't want to start an argument about oil vs. alternative energy, because I think all of us agree that we should try to develop alternative energy sources to eventually replace oil for multiple reason (environment, foreign dependency, supply...etc). I do want to discuss this bullshit that the dems in Congress and elsewhere are spewing that it will take us 10 + years to see any benefit. This is just plain and simple an excuse to appease the environmentalists and play partisan politics i.e. they have to disagree with Republicans! Case in Point http://www.mnweekly.ru/business/20080710/55337246.html This oil was discovered LAST MONTH...that's June. They are going to be pumping oil out in September of 2008...THIS YEAR. Yeah that's right...I didn't say September 2018. Much like this company, we already know where the oil is in our country and off of our shores, so there is no reason to believe the outright LIES being told to the public that drilling won't help us within the next 10 years plus. Never mind the fact that just the announcement will put downward pressure on speculators causing an immidiate drop in price. I see no reason not to drill while we are simultaneously working on solid alternative energy plans....why let American suffer at the pump while we are developing the alternatives? |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| dreachon | Jul 16 2008, 10:36 AM Post #2 |
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Creative Title Here
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That's cool. Maybe that will help drop down prices here as well. Really I have no idea how long it takes to drill oil in places like ANWR. Maybe ANWR's oil is much deeper, more difficult to get to, more restrictions due to the wildlife, maybe the whole process has more regulations and more red tape, and more safety precautions? Really, I just don't know. I do know one thing though...you don't have to drill for sun ;) |
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| hoosierinhogville | Jul 16 2008, 10:59 AM Post #3 |
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A couple of points here. First, I saw something from the US Dept of Energy not long ago that said 7 years, and I would think a lot of those guys are Bush appointees this late in his term as President, so it isn't just the Dems in congress that are saying this stuff. Second, like you I am skeptical of the claim that it would take that long, but then I really have no idea of the logistics involved. I would think it would take longer than the outfit in the Caspian Sea that the article talked about just for the simple fact, that I bet there would be a lot more rules and regulations in place that the companies here in the States would have to comply with. Now with that being said, I don't see any reason not to drill. I am not sure it will help as much as some people on the right are predicting, but any sort of relief would be a help. I am curious though, if they do lift the ban, would it not then be up to the states whether nor not to allow it, or if they wanted to stop it woulud they then have to get the state legislature together to issue a moratorium, or are they even allowed to do that? The reason I ask is because the people of California, and Florida seem to be pretty opposed to the idea of drilling of their coasts. |
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| Mr Gray | Jul 16 2008, 11:28 AM Post #4 |
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I believe that it would get us down to about $2.00/gallon, which is really where it should be. This would only last for about 10 year so or so until the next waive of supply problems, so I would consider that as our windown of opportunity to develop alternatives. I know NLA has addressed this because there is still tar on the beach from the last time we drilled in Cali. I don't think the states have a voice in off-shore drilling, but I'm not 100% sure on that. I do know that they would plan to drill 20 miles out, and the curve of the earth visually starts at 7 miles, so the drilling would be completely out of site from the beach. |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| Mr Gray | Jul 16 2008, 11:32 AM Post #5 |
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http://www.cnbc.com/id/25691496 Further emphasizing my point. Drilling will speculate prices downward immidiately, and we will have actual oil quickly, driving prices down even further.
BTW, speculators also know that it would not take 10 years to get oil, which is why Bush's speech yesterday caused prices to fall $9. If speculators thought it would take 10 years for us to get oil, they wouldn't even worry about selling short. |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| hoosierinhogville | Jul 16 2008, 12:11 PM Post #6 |
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$2 a gallon? You really think it will help that much? Perhaps once they are up and running at maximum efficiency maybe, but I just don't see it helping that much. We can all hope though. Incidentely, prices for a barrell of crude went down $9 dollars yesterday, and my price at the pump went up. At the Shell station down the road from my house yesterday morning gas was 3.93/gal. At the same station yesterday evening at around 7PM gas was 4.02/gal, and it was the same this morning on my way to work. |
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| Mr Gray | Jul 16 2008, 12:21 PM Post #7 |
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Yes, take a look at the commodities markets and look at the speculation affect, the percentage of domestic oil we currently use, and the cost of gas in oil rich countries. Take these factors into account, and with the current value of the dollar (vs. commidities) the real value of gas should be at about $2.00. Here is how that works. When crude prices go up, the gas distributors (not the stations) set the price higher, 1 because they can, and 2 because they are pricing based on replacement value of inventory. When oil prices go down, you often see a very short term spike in gas prices also, because the distributors want to get at least breakeven value out of their current inventory as they know they are going to have to lower prices very soon, and thay may include lowering the price on existing inventory that they have already paid a higher price for. |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| hoosierinhogville | Jul 16 2008, 12:43 PM Post #8 |
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I am not necissarily saying you are wrong Aaron. A couple weeks ago though when congress was beating the speculator drum, there were economists that came out and said speculators weren't really a big part of the problem. So, who is right and who is wrong? I guess if they lift the ban, we will see. By the way, I am predicting that we will see a ban lifted. There are some moderate democrats that are starting to get on board with the idea. |
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| Mr Gray | Jul 16 2008, 01:43 PM Post #9 |
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those economist aren't wrong in what they are saying about speculators. Speculators aren't the problem in terms of doing anything fraudulent or unethical. They are betting based on the market price, and they know that if we are not willing to drill domestically in the short term, then the middle east will continue to raise the price, so they buy it up, causing artificial demand. The pendulum has to swing the other way eventually, and as soon as the US makes a decision to drill, it will, because those same speculators will sell their futures and begin buyind down at low cash prices. They are just responding to the market, the real problem is the source of the oil. |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| brumdog44 | Jul 16 2008, 04:07 PM Post #10 |
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Please provide links in which economists are saying that offshore drilling would drop the cost of gas to $2. I'm just not buying that alone would do so. http://www.peridotcapitalist.com/2008/06/would-offshore-drilling-bring-down-gas.html While I think that the above article understates the drop, a drop to $2 a gallon is simply a pipe dream. |
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| Mr Gray | Jul 16 2008, 04:14 PM Post #11 |
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I paid $1.99 per gallon last year Brum....how could it be a pipe dream for it to happen again? |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| Mr Gray | Jul 16 2008, 04:23 PM Post #12 |
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geez, I just read that article. It has too many problems for me to even begin. Would you quit googling articles that attempt to support you, or refute me Brum. You obviously are clueless on economic issues. |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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| boilergrad01 | Jul 16 2008, 04:57 PM Post #13 |
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Working on the last 5
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AaronK, here is my take on the oil problem. The alternative energy ideas where ignored for to long. We as a country have done very little for to long. I believe that to be a fact. The gas and energy prices are finacially killing us. I believe that to be a fact The alternative energy crowd sees this as the best chance to motivate the people. This is probably true. America has seldom been a proactive country. We are not proactive in business. We are not proactive in our personal lives. We are not proactive people. $4 a gallon gas has motivated us to find new ways to power trnsportation. Some assclowns we call Liberals are afraid if we lower the gas prices back to $2 we will not continue to find alternative power for trasportation |
| Nothing beats an Astronaut | |
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| brumdog44 | Jul 16 2008, 05:14 PM Post #14 |
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THEN PROVIDE SOMETHING TANGIBLE EVIDENCE RATHER THAN SOME RANDOMLY MADE UP FIGURE. I flat out stated that there were problems with the article that I posted which is WHY I ASKED YOU TO PROVIDE LINKS TO THE $2 COMMENT. I'm not looking to "support me" -- I'm on record saying that I FAVOR offshore drilling. Hell, I can give you Fox News links stating that offshore drilling would have a negligible effect on gas prices. http://www.foxnews.com/wires/2008Jun27/0,4670,McCainAdWatch,00.html When I'm clueless on an issue, I research it and get myself informed. You just make up things. |
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| Mr Gray | Jul 17 2008, 12:08 AM Post #15 |
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I would love it if this board were the real world and you questioned me on this subject or made a comment like that in a room full of my peers. I don't like to get personal or self-promote on here either, but lets just say that you would be laughed out of the room in a heartbeat. Now, this $2.00 number is a theory that I developed based on my own research, however I have also heard a few economists and other experts use the same number on radio/television programs. I believe Newt uses $2.00 as well. Anyway, I have watched the futures trading trends and their patterns respective to the dollar and other long-term commodities, such as gold and silver, which is how I determined my number. For example, gold always trades about 10:1 vs. crude. This is a ratio that will always remain about the same because of the commodity nature of the two products. It will, however swing left or right sometimes to extremes based on certain factors such as supply (or perceived) supply issues, global tensions, or some form of natural disaster. We are experiencing 2 of the 3 right now causing a scare in the oil industry = increased upward pressure from speculators and supply sources. In order to determine potential market price of a commodity that trades in futures, you need to figure out what the value would be in a cash only market, meaning buyers would actually have to take inventory. Based on the other basic economic commodities, crude's cash price would be about $90 per barrel, equalling about $2.57 per gallon for fuel. Now, looking further you realize that those basic economic commodities are also trading higher than their cash value right now. The reason is that the oil price is causing inflationary concerns leading to investors flocking to hedge their bets on other known commodities. The reason the commodities, such as gold, are not rising at the ridiculous rates that crude is, however, is because there are no known external issues with those products to cause a scare, as there are with crude. The rise in commodity pricing is purely based on hedging for inflation. Now, when speculators start truly trading downward (as soon as we make a committment to drill), the pendulum will actualliy swing the other way for a while, because when trading in futures it has to. Everyone either has to get out at market price, or they will experience massive margin calls...either way the selling pressure will force crude below market for a period of time, probably for about a year. You can typically expect a short of about 25% to 40% when that happens, so playing on the safe side at 25%, you would end up with $67 crude, equaling fuel at $1.92. It would eventually (in about a year) swing up a bit, back around the $2.50 mark, which is were it would safely stay for quite some time, while we are developing alternatives, which by the way just the presence of alternative research will keep the crude price in check. Any more questions Brum? |
![]() The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism. | |
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7:17 PM Jul 10