Rick Stephenson: Consider drilling facts

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To the editor:

This is in response to a previous letter suggesting that we demand Congress repeal the ban on offshore oil drilling. I am about as mad about the high price of gas as the next guy, but before you make up your mind on this issue, I would encourage you to consider a few facts.

At maximum production, the offshore oil fields on our West and East coasts are estimated to be able to produce about one million barrels a day, or roughly 5 percent of our current need.

However, reaching full production capacity will take at least 10 years and probably longer. And even then, offshore oil will not reduce our dependence on foreign oil by much. In addition, the costs of obtaining oil from the ocean are enormous. The deep sea rigs are leased by the oil companies to the tune of $600,000 to $1 million a day. Producing oil from other marginal sources such as the arctic, oil shale and oil sands in Canada also will not appreciably reduce gasoline prices because of the high costs of production.

The current high price of oil is not because of lack of supply, but because of futures trading in the oil market. Major users of oil commodities are hedging because they fear we are approaching "peak oil," or the point at which world oil production peaks. Once the curve for global oil production peaks, begins to decline and is intersected by demand, we'll be wishing for gas at any price.

If you want to pay less at Kum and Go anytime soon, I would suggest telling Congress to put controls on the rampant speculation in oil futures and demand the president release the strategic oil reserve like presidents Bill Clinton and Bush the first did. We also need to demand that our government formulate a workable, long-term energy policy that incorporates investing in "free" energy, renewables and research in new technology.

If we don't get a handle on our energy situation and stop thinking the black, greasy stuff is the only solution, our children and grandchildren are going to have a lot more to worry about than high gas prices.

Rick Stephenson

Craig

Comments

rhammel 6 years, 3 months ago

Right on, Rick! I am glad I was able to comment before others that use this forum were able to view and comment. Futures speculation is, indeed, the reason for high price of gas at the pump today. I feel that we can get a handle on this if we get Congress (both houses) to act on this issue when they come back from recess. However, whatever they do , will have to be "veto proof."

Rick

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grannyrett 6 years, 3 months ago

Rick-It would have been nice if they had cared enough to do something about this before they went on vacation. If you read the forums, you would know that 50cal has said the same things many times. Most of the shareholders are 401K and retirement people. They are the major investors. What are we going to do? Take this away from them?

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oldsage 6 years, 3 months ago

No. If you want to pay less at Kum and Go there needs to be a prosecution right here in Moffat county of those who collude to fix the prices here in Moffat County at the artificially high rate. Give them some jail time and then you will see the price drop!

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irishbrat 6 years, 3 months ago

Diesel fuel was more in Rifle yesterday than here.

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lonelyone 6 years, 3 months ago

Now with the hurricanes in the southern states, they've shut a refinery down so I suppose that means, just as our prices are coming down, they will rocket back up?!?!???

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gobroncos 6 years, 3 months ago

Grand Junction was FIFTY CENTS cheaper than Craig this past Saturday.

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rhammel 6 years, 3 months ago

Granny,

I hold stock in both Exxon and Chevron. The return on my investment is abysmal; 20-30 cents per share per quarter. These stocks have been valued has high as $104 recently Whereas I have some others that pay much more, $0.08 per share, per month. they have been valued at $14-$16 per share.

Oil shares have been manipulated by large investors who have made huge profits. The investors like you and I are left out of the picture, unless you want to sit in front of your monitor all day and have a direct line to your broker. Sorry I want a life and I want stocks that have a good yeild.

Rick

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puppy_power 6 years, 3 months ago

Nice article Tango Delta, You make a lot of valid points.

Things to consider though if off shore oil rigs cost too much "600k to 1mill a day" to run they wouldn't exist that's basic economics. They have drilled for oil off shore for years in other locations and even with the "high" costs have been very profitable and have had high production rates. Had the liberal Californians not ban it 10 years ago we would be at full production now, we have to start sometime right? Still, only of course providing "5% of our oil need". Of course even if those figures are correct, are you saying that 5% increase in production would not have a substantial impact on the world market? Oil is also at a 5 month low at this current moment as we are seriously talking about repealing the ban. I don't know.

I absolutely agree that that speculation of oil production peaking is the cause of high oil barrel costs. But, here's the thing its a commodity and we live in a capitalist world and we don't control world economics even though we Americans think we are in control of the universe and that will not ever change with or without oil. Gasoline however, price has lots less to do with that. Again poor planning long before George W. in oil refining has the most to do with that.

So you offer opening up the strategic reserve. This by the way would be the stupidest thing our government could ever do. That oil is for the defense of our country in a major attack or emergency, it's not for the "Smiths family" to take cheap a summer road trip to tour the great American scenery vacation. You said yourself we will be wishing for gas at any price once global peak production is reached. So do you really think that it's worth the risk of the security of the nation for a few months of slightly lower prices for a few months?

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puppy_power 6 years, 3 months ago

Also Tango Delta

Gas prices are very high and it is impacting average family's lifestyles and wallets and putting a strain on them. This however did not happen over night. Cheap energy for so long has spoiled us and we have Structured our towns/cities and job around commuting in larger and larger vehicles far distances. Also to say that gas prices are unaffordable you must ask yourself things like do you need things like cell phones, cable TV, plasma TVs, large houses that are out of your price range, Trucks and SUVs' because they look cool, Stuff they don't need to live and live well.
Americans are spoiled period and most all live well above there means and are not responsible financially (that's why we that are have to pay so much taxes) the high energy cost are a very small part of this strain. We in America still pay a lot less for fuel than other countries all over the world and have been for years.

Also "free" energy, renewable and research in new technology is a phrase that is being thrown around a lot by the Politian's on both sides, but if it was there was such a thing that worked we would be already using it, it just isn't economically viable and everyone knows it and just won't say it. Oil and fossil fuels is still the cheapest thing going.

Finally again you are right it will be our children and grandchildren that will be going to have a lot more to worry about than high gas prices. It's going to be fresh water. We can live without the black greasy stuff when it's gone.

Sincerely,

Puppy Power

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