08-07-2008
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Vice President
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Member Since: Jun 2008
Location: the south
Posts: 8,837
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Re: McCain on energy - tells us to keep our tires inflated.
Quote:
Originally Posted by goober
Nobody has a plan for increasing domestic oil production for real, because domestic oil production isn't being held back by anyone.
The oil companies have only explored 25% of their federal leases, they haven't run out of places to drill.
They have plenty of money, so that's not the issue, they haven't increased drilling because it's in their best interest to do exactly as much drilling as they are doing now. When the Democrats proposed a "use it or lose it" law on oil leases, that actually would have increased drilling, it was defeated.
Oil prices are way too high, the price should probably be 40-60/ barrel, but there is a huge risk premium on the price because of the Iraq war.
$100+ oil is not sustainable in the future, because it really does gut the world economy, the price is falling now because the world economy has slowed down so much that the oil is backing up and inventories are building.
If you really want to lower the price of oil, stability in Iraq ASAP will do more than anything else to do that in the next 10 years. If the US had not invaded Iraq, and the sanctions had been dropped, oil would probably be around $30/barrel now.
Saddam was nothing if not stabilizing.
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Firstly the claim is in regards to pumping, not exploring.
Second, there is a simple explination for why:
Quote:
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First, a company may lease property, but never have the funds to properly explore it or drill an exploratory well. Second, after paying for further tests (such as seismic), they often decide the lease isn’t worth the high, high costs of drilling after all. Or they may hold onto the lease for years until either higher oil prices or new technology makes it feasible to drill. Third, a company may lease property but drill on another tract (which drains a “pool” that covers multiple leased tracts), so perhaps they’re counting it as “not used” if no well is sunk on that particular piece of property. Fourth, they may try to drill and be blocked by government bureaucrats, environmental lawsuits, etc.
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"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."
Ayn Rand
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