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| Posted by: Jag
- [28457122] Thu, Jul 17, 2008, 02:44
We are the 3rd leading producer of oil, so if our efforts to increase supply lead to a huge decrease in the price of oil, wouldn't the oil companies lose much more revenue due to loss of profit per barrel?
It now makes sense why an oilman like Bush sr. would set the moratorium on offshore drilling. |
| | | 1 | Boldwin
ID: 406201020
Thu, Jul 17, 2008, 12:30
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He was also the first to lift it between him and congress. I hear both Dems and Reps are fuming at Pelosi because she is stonewalling any bill that has increased drilling in it and congress has basically ground to a halt with the exception of naming post offices and 'national jai lai week'.
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| | | 2 | Perm Dude
ID: 24629177
Thu, Jul 17, 2008, 12:41
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Congress has plenty to do. Just yesterday they voted to remove the HIV travel ban, in fact. Refusing the President's request on an ill-conceived plan is hardly gringing Congress to a halt.
As for Jag's question, since the oil would be coming out of the US rather than other countries, the oil companies, conceivably, would stand to profit. But keep in mind that oil companies already hold thousands of oil leases that are gathering dust--you're point is a good one that oil companies will act on their own best interests first.
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| | | 3 | Boldwin
ID: 406201020
Thu, Jul 17, 2008, 15:51
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The leases aren't gathering dust. They are going thru the next step of geologists evaluating them.
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| | | 4 | Perm Dude
ID: 24629177
Thu, Jul 17, 2008, 16:39
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All 68 million acres? Are you sure?
And that is just the public lands. Add another 20-25% of private lands into that.
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| | | 5 | nerveclinic
ID: 5047110
Thu, Jul 17, 2008, 17:18
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wouldn't the oil companies lose much more revenue due to loss of profit per barrel?
First you have to define what you mean by "oil companies".
If the companies primary business is building rigs and drilling (RIG, ATW) Then they would benifit handsomely.
Oil companies given rights to drill who make a huge find would also do well since they would be reaping the profits even if the price did drop a bit.
Refiners would be helped because they need new cheaper sources of oil.
The only oil companies that would be hurt would be ones that are not involved in the new fields in some way, shape or form.
If the price of oil drops below the point where it is a value to drill in these places, they would just stop drilling until the price goes back up again.
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| | | 6 | Perm Dude
ID: 06251721
Fri, Jul 18, 2008, 14:23
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FactCheck.org takes on the 68 million acre figure. We just don't know what is going on with many of those leases, it appears.
Obama was wrong to call the acreage "untouched" since, while some certainly are untouched, we don't know the amount that are. While we can encourage oil companied to utilize the leases they have before opening up more public land for leasing (and, more importantly, stop new leases entirely and start dealing with the development interest in public lands as a development option standpoint), the number Obama gave was misapplied.
pd
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| | | 7 | Boldwin
ID: 406201020
Sat, Jul 19, 2008, 02:27
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I really wish Democrats would just listen to themselves.
Do we want to strongarm and rush oilmen to drill dryholes just to make sure they don't lose their lease rights to drill?
If we are reasonably sure that the most likely new major fields are offshore and ANWR why would we insist anyone drill somewhere else first? Let's convince traders in futures, that big new supplies will no longer be stopped up by congress indefinitely.
How can Democrats even contemplate punishing traders and speculators? That's just completely ridiculous.
Proposing a whole new round of punitive taxes on the oil industry is also transparent BS. That is exactly the same as asking the oil companies to collect new taxes as congress' middlemen. What sane person could look at that as a solution to the problem?
'Are you feeling the pain? How many additional taxes can I put on top of that pain for you?' - Dems
And still the fundamentally fair adjustment to keep government gas tax collections from rising along with gas prices never gets discussed. Why? mainly because as far as Dems are concerned gas should have been taxed as high here as in Europe all along.
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| | | 8 | sarge33rd
ID: 76442923
Sat, Jul 19, 2008, 09:30
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in truth, why would that 'by definition', be a bad thing? Giving cause to the American consumer, to slow his/her consumption?
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| | | 9 | Perm Dude
ID: 46627199
Sat, Jul 19, 2008, 10:27
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I don't think you have any idea of what you are talking about Baldwin. Truly.
How can Democrats even contemplate punishing traders and speculators?
Breathtaking in its nonsense. No one is punishing anyone.
What is the role of the government here? To act as stewards for the land held in trust. And if the land can be developed in some way (such as mineral, oil, or gas extraction) without real damage to it, then they lease it to businesses to do so.
At no point, however, do they give up their role as stewards. In fact, it is though the better management of these leases that will enable to government to better fill that role.
Think about if you had a piece of land that someone wanted to develop, so you sign a lease with a company for development, which they pay you a tiny amount of money per year but a share in the profits if they develop and make money off it. Then the property sits. Other development companies come along but you have to turn them down, point out that the dollar-a-year lease you signed locked up the rights to the land already.
If you were the government in this case, you would say that you should, essentially, shut up, so as not to "punish" the company which holds the lease.
Oil & gas leases should be treated in much the same way that intellectual property is treated: Through options with developmental benchmarks and generous time allowances.
Because the government isn't helping anyone (not the land, not the treasury, and not the American people) by locking themselves into leases in which competition is locked out of non-developing lands.
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| | | 10 | Boldwin
ID: 406201020
Sat, Jul 19, 2008, 15:13
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At no point, however, do they give up their role as stewards.
If only that were true. They have given up their role as stewards of vast percentages of USA territory over to the UN without so much as a vote in congress.
And you want me to believe Dems are just eating their hearts out dying to see leases used and public lands exploited. PD, this is the WWF calling...
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| | | 11 | Perm Dude
ID: 346481910
Sat, Jul 19, 2008, 17:21
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If only that were true...
The tone of your post makes me think you wish it were true. And yet you advocate that they do not.
Don't complain when public servants act as you advocate. If you feel otherwise, then advocate your beliefs.
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| | | 12 | Boldwin
ID: 406201020
Sun, Jul 20, 2008, 07:40
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There is no environmental group or government environmental agency that has not been coopted and perverted by the radical left so far as I have been able to discern.
Who then would I advocate for? God's Kingdom. Where stewardship will be done right.
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| | | 13 | Boldwin
ID: 406201020
Sun, Jul 20, 2008, 09:45
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Really PD has entered Tree/Sarge territory the last 6 months...
Breathtaking in its nonsense. No one is punishing anyone. - PD
Why do I even bother...take note Boxman and consider if this site is even worth the time.
I break away and come back with less and less interest.
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| | | 14 | Boldwin
ID: 406201020
Sun, Jul 20, 2008, 10:00
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But then if I didn't come here I might not be spurred to locate a golden nugget like this.“Over the years we have asked over 2000 professionals for an exception to our claim that every asset class move of 2 sigmas away from trend had broken, and not one of the 2000 has ever offered an exception!
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I've been a strong advocate for the position that the price of oil, while under fundamental upward pressure, contains an enormous speculation premium...I've always argued that the speculation in the market has not been manipulative but just a rush to improve gains in commodities...
The futures markets, however, were designed as simple price discovery mechanisms...Because of this, the rush to invest in oil and other commodities has had a geometric effect in price that you would not witness with other asset classes...
Unfortunately, some problems do not lend themselves to simple solutions..Two instruments are called upon to rein in excessive speculation: position limits and margins. Let me add two more that will surely be called upon soon: a ban on pension and indexed investment in commodities. Let's take all four and describe why they'll be less than useless.
Margin increases will have a very limited effect on the commodity markets, because the leverage on them is so high to begin with. ...Position limit tracking would be practically impossible and even less useful; those who wanted to skirt them could easily...avoid all invented limitations on positions....
More interesting is the idea of limiting pension and indexed investment in oil. But here too, the managers of those funds would be easily able to access the over-the-counter markets domestically...
You see, all the solutions that I have heard proposed require that you define the motive of the participant -- that you somehow figure out which contract of oil is initiated as a true hedge or as a speculative investment, and in this, even the participants themselves would be hard-pressed to know.
That is the environment we have created. Everyone's a trader -- very little in the futures markets is "purely" hedge or "purely" speculation anymore...
In one instance, however, the speculation premium was "successfully" tested - in the silver markets in 1980 when the Hunt brothers attempted to corner the market. As silver approached $50 an ounce in January 1980, the commercial participants asked for relief from the enormous margin calls from ever-rising prices. The CFTC and the Comex (the predecessor to the Nymex) responded effectively by imposing "liquidation-only" trading -- traders were allowed only to close existing positions and not permitted to initiate new positions.
This forced purely speculative positions to be closed rapidly, as they could no longer be "rolled" into future months at expiration. This caused the price of silver to drop by $12 the day after it was imposed, a decrease of over 20%! Over the course of the next three months, as contract months expired, the price dropped over 50%.
While I do not advocate such a move,...I believe that in an election year this will inevitably be suggested and implemented. The effects would be astonishing and immediate. Energy funds would be buried, and commodity-biased portfolios hurt badly...
One thing is for sure: A "liquidation-only" market would settle finally and for all time the argument about speculation premium in the oil markets
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| | | 15 | Perm Dude
ID: 17656208
Sun, Jul 20, 2008, 10:02
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Who then would I advocate for? God's Kingdom. Where stewardship will be done right.
So you would ignore God's command to be a steward of this Earth, in the hopes to be one in God's kingdom (where, presumably, he already has things in hand)?
As for the "punishment" it seems you've deliberately conflated two different arguments. The one being made here (about oil drilling and the associated speculating) and the one you linked to, regarding oil trading speculators. Is this another example of your "oops, I'm in rhetorical trouble, better bail!" argument?
Now, if you want to try to parse out your argument being made in this thread I'm happy to continue with it. I think you have some promise along the stewardship line. But if you want to soil the water then you're on your own.
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| | | 16 | Boldwin
ID: 406201020
Sun, Jul 20, 2008, 10:17
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Pelosi bottles this up till the guy with the messiah complex gets elected, whereupon he appears to turn water into wine.
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| | | 17 | Boldwin
ID: 406201020
Sun, Jul 20, 2008, 10:35
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PD
it seems you've deliberately conflated two different arguments. The one being made here (about oil drilling and the associated speculating) and the one you linked to, regarding oil trading speculators. - PD
1) I have never once been refering to speculators as meaning 'wildcatters'. I have always assumed everyone here understood me to be talking about futures traders
So you would ignore God's command to be a steward of this Earth, in the hopes to be one in God's kingdom (where, presumably, he already has things in hand)? - PD
2) Proper stewardship of the earth will begin after armageddon wherein it will be done right during the 1000 year reign of Christ. While there is a heavenly component namely the kings, priests and judges as well as their husband Christ, it will be accomplished here on earth.
It will most certainly NOT be accomplished by 'the beast slouching towards Gomorrah' that you are enabling.
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| | | 18 | Perm Dude
ID: 17656208
Sun, Jul 20, 2008, 12:21
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That's a strawman, Baldwin, and you're smart enough to realize it but (today, at least) ethically-free enough to use it anyway.
I am clearly asking you to advocate your beliefs, here on earth, as commanded by God. Our stewardship of the earth doesn't begin when we leave it. I never asked you to become a member of any animal rights organization but to work for a system you want to see.
Our government, disagree with it or no, is much less likely to reflect the beliefs of people, like yourself, who choose to opt out of their responsibilities here on earth.
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| | | 19 | Boldwin
ID: 406201020
Sun, Jul 20, 2008, 13:38
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PD
Do me and yourself a favor and read the 21 chapter of Revelations and ask where 'New Jerusalem' and the 'tent of God' come down out of heaven to. Where is that?
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| | | 20 | Boldwin
ID: 406201020
Sun, Jul 20, 2008, 14:34
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I'm on the fence wrt the primary cause so I'm just throwing this on the evidence pile without an opinion...
Evidence the rise in price is not primarily speculation driven.
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| | | 21 | nerveclinic
ID: 5047110
Sun, Jul 20, 2008, 16:34
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2) Proper stewardship of the earth will begin after armageddon wherein it will be done right during the 1000 year reign of Christ.
While there is a heavenly component namely the kings, priests and judges as well as their husband Christ, it will be accomplished here on earth.
Smirk
Blah, blah, blah...
If I haven't been reading this crap, wrecking perfectly functioning threads for years now, I would guess you were just having a laugh, or smoking crack or cruising truck stops.
Please note I wrote this just half hour after accidentally dropping Clay Bucholz instead of Taylor Bucholz.
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| | | 22 | sarge33rd
ID: 76442923
Sun, Jul 20, 2008, 23:10
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I'm curious Boldy; how you reconcile your view of "true stewardship of the Earth" and what that would mean...with your overtly aggressive, insulting and anti-environmental views as you've repeatedly expressed them on this forum. Seems more than a little hypocritical and self-serving IMHO.
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| | | 23 | nerveclinic
ID: 5047110
Mon, Jul 21, 2008, 14:31
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But keep in mind that oil companies already hold thousands of oil leases that are gathering dust--you're point is a good one that oil companies will act on their own best interests first.
PD just bringing this up because it came up this weekend. I know I always go on about Bob Brinker, and I know that he isn't the second coming but...
He devoted the first 15 minutes of his show this weekend discussing this topic. He said it is a "fabricated" story making the political circuit for political reasons. He challenged listeners to prove it's true.
He reasoned if oil companies were holding leases and there was oil "why would they not want to reap the bounty" by drilling. He further stated the leases in fact are rights to explore and come with a significant price tag.
So while I know at face value the story sounds disconcerting, he made a point of coming on this week to explain you are being hoodwinked for political purposes.
Brinker is not a partisan hack. He doesn't have a political agenda.
Think about it. Your link states...
Currently oil companies are producing on only about 20 percent of the acres they hold offshore and less than 30 percent of the acres they hold onshore. These unused areas could produce an additional 4.8 million barrels of oil and 44 billion cubic feet of natural gas each day. This amount of oil would nearly double current domestic oil production.
If this were true the oil alone would be worth over half a billion dollars EVERY DAY. Why would a company resist drilling this and taking that kind of revenue in? It doesn't make sense.
Brinker went on to say most leases were 5-10 years and then they lose the rights and the reason there are so many leases that haven't been tapped is because they explored and no significant oil was found.
Why wouldn't they drill them if there was a gold mine? That was basically his point.
Unless "Conspiracy theory"...fill in the blank. In which case I am all ears.
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| | | 24 | Boxman
ID: 337352111
Mon, Jul 21, 2008, 14:51
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Unless "Conspiracy theory"...fill in the blank. In which case I am all ears.
My take on the unused oil leases is that what would the effect be on current market prices if an Exxon announced a large find off the west coast?
Even if it was 10 years to market the current price of oil would drop on speculation that perhaps the Earth's supplies are not as tight as we think. Exxon would be cutting their throat with the oil they produce now and would have to recalculate their entire NPV and ROI figures for all their projects and possibly incur expenses to abandon those no longer profitable or as profitable as their ROE floor dictates.
If it were me, and it's not, I'd wait until the first batch of marketable oil comes up from a prospective find before I announce anything. This way I maximize the price of oil I currently produce and give the market less long term time to react to my "new" find.
Just a thought here. Is an oil company under obligation to publicly announce a major find? To satisfy shareholders it makes sense to announce finds that satisty my rate of replenishment to prior inventory levels, but beyond that the answer escapes me.
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| | | 25 | Perm Dude
ID: 35612218
Mon, Jul 21, 2008, 15:37
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There's no obligation, I don't think. But any oil company is looking for oil not for right now but when their current supplies start to dwindle.
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| | | 26 | boikin
ID: 532592112
Mon, Jul 21, 2008, 16:05
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there is some incentives to announce finds from a negotiations stand point. if you discover a large deposit off the coast of California it would give you more negotiation power with foreign countries if they know that if the future there oil could be less valuable than they had expected.
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| | | 27 | Boldwin
ID: 406201020
Mon, Jul 21, 2008, 23:49
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There is no conspiracy here. It's all a winnowing process. There are only so many rigs and so much money to explore with. They are going to get put where the geologists tell them the odds are highest. But they can't explore where they can't drill and they can't claim. The odds are highest for major new discoveries as far as we know, where they are not allowed to explore further.
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| | | 28 | Old Man Greene
ID: 44656214
Tue, Jul 22, 2008, 06:07
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Ok, it's been awhile and at present I can't remember how to do this so you just click and your on to the site..but if you haven't read this or heard of this it's some very interesting reading..Not sure this is even the right place but..http://www.globalresourcecorp.com
Make sure you read the new information section to keep you up to date
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| | | 29 | Boldwin
ID: 406201020
Tue, Jul 22, 2008, 08:06
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link
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