July 22, 2008

Less than ten years to develop offshore oil if regulations modified

Investors Daily has an editorial by Monica Showalter which proposes that offshore drilling in the United States could develop oil far faster than ten years if regulations were adjusted.

California's 10 billion barrels in offshore oil could be brought to market in as little as a year "if the moratorium were lifted," according to a recent Sanford C. Bernstein report said, citing that the oil is under shallow water and drilling platforms already exist.

Polls show most Americans favoring opening federal lands and offshore areas to energy production. As it stands, 97% of our offshore areas and 94% of our federal lands are off limits.

To begin with, industry analysts note, much of the drilling delay is self-inflicted — a result of excessively stringent environmental and land-use regulations.

Scrap those, or modify them, and new oil can be produced in far less than 10 years.

Producing oil from new sources has three stages, which can take years, notes Marilyn Crockett, executive director of the Alaska Oil and Gas Association in Anchorage.
1. environmental impact report
2. bidding on leases
3. drilling.

1. The environmental impact statement alone can take two to three years.

The Interior Department's Minerals Management Service manages those studies for federal offshore holdings, after input from local, state and environmental groups, according to spokeswoman Robin Cacy.

2. After that comes bidding.

MMS manages the 574 million acres of offshore federal holdings, and the Bureau of Land Management directs those for federal land, such as the National Petroleum Reserve of Alaska and the Arctic National Wildlife Refuge. For instance, Cacy said MMS conducts lease bids in five-year blocks, with recent ones in the Chukchi Sea off northwest Alaska set for 2007 to 2012. Based on this, "we can't add new sales to that," she said.

Yet, in some areas, the regulatory processes is largely done, so oil can come to market far sooner than 10 years — if Congress lets it.

Bureaucracy's not the only problem.

According to the Institute for Energy Research, a private think tank, citing Bureau of Land Management data, protests, appeals and lawsuits over oil development averaged 1,180 per year between 2001 and 2007, a 706% increase over 1997-2000. The IER notes, for instance, that 100% of New Mexico's 78 oil leases were protested by environmental and neighborhood groups.

In Alaska's case, stringent environmental regulations permit exploration only in winter — from December to April. "We go to extreme means to make sure we do no harm to the tundra," said Crockett. Offshore exploration has fewer environmental delays, but requires more infrastructure to bring the oil to market, said Crockett.


Karl Schroeder said...

Hm.... I have questions:

In whose opinion are the environmental regulations "excessively stringent?" Is it a disinterested third party that's saying this? Some of the places where this oil resides are right next to unspoiled Canadian wilderness (think Alaska, where the caribou herds don't respect the border and rely on untouched wilderness being available on both sides of it). Our wilderness areas may not be of interest to you, but I'm Canadian and consider this "undeveloped land" to be a precious asset (it's even worth money if left alone, when you consider our arboreal forest as both a carbon sink and a provider of ecosystem services). What happens on your side of the border effects the biome on my side; so my people might not consider the environmental requirements "excessively stringent."

And how does all this domestic oil contribute to reducing America's CO2 contribution? Doesn't all this cheap local oil constitute a disincentive to move to a post-carbon economy?

bw said...

I am also Canadian. Dual citizenship. Canada does not have bans on offshore drilling. So the argument that the US should continue to ban offshore drilling to keep Canada clean seems to be totally hypocritical.

Canada has plenty of land to grow more trees. I remember back in the early 90s when I lived in Calgary that one of the ways to make money was to get land relatively cheap from a Federal auction and then clearcut the trees. The wood paid for the land. Then replant for another harvest in a few years.

People in the US don't really care that much what people in another state think, so how much less do they care what Canadians think. People in Louisiana drill offshore and say that yes the rigs are dots on the horizon when standing on shore, but we are doing our part to provide oil for the country why aren't California or Florida ?

As noted in the energy plan for this site. Getting more oil is to ensure a smooth transition to an electrified energy and transportation infrastructure.

Plus the main point is that the it will take ten years to get any oil is a bunch of BS. If the choice for whatever reason is not to go after that offshore oil, then fine but to use the lie that it must take ten years to develop is wrong.

Unspoiled wilderness: Thousands of species are being lost every year. The air and water pollution from coal and oil and the other effects are making this happen. Just because people like the look of caribou should not make them special. A better plan for economic strength that can enable the budget to make the needed changes faster should be done. The plans are achievable to fix the whole thing. Plus the air pollution from coal kills millions of people every year. Real leadership would be to not pussy foot around caribou and slam home a plan that strengthens the economy and slams home the changes.

if one would say "the economy does not need strengthening". One million barrels per day is $40 billion per year. 5 million barrels per day is $200 billion/year.