Letter to Congress to Allow Domestic Oil Production

midwest · **Joined:** Tue Apr 25, 2006 12:03 am **Posts:** 173

UFO wrote:

midwest wrote:

You might want to check out what our largest supplier, Canada, is doing with tar sands before you say it is not "recoverable". And they have a hell of a lot of it, and we have even more shale. When the price is right we will develop ways to bring it to market---rest assured on that. I have never fallen for this myth that we are running out of oil, and I have heard that since I was 10 yrs old.

Also, the not-so-nice bottom line is: The worlds resources belong to the country with the most powerful military. In a crises, if our very survival depended on it, we would go get it. Just like soldiers have gone after resources since the beginning of man.

I am very well aware of what Canada is doing with tar sands. They need LOTS of natural gas to recover oil, and retmil46 is correct in saying you need sustained market prices over $100 a barrel for tar sand oil to be feasible. Shale recovery is similar in cost of recovery, and needs lots and lots of water, which happens to be in very short supply in Colorado's Roan plateau.

For the record, I have NEVER made the claim we are "running out of oil", that has no bearing on the conversation. My original point remains, you will not get resource development with current oil prices no matter what the US government is called on to do, unless you want to flush money down the drain. My other point is we cannot exploit domestic sources of oil to affect the world market -- we just don't have enough. It's a global market, and we cannot dominate it. Our path is clear - develop alternatives to petroleum so we can ensure our economic security.

We certainly CAN develope resources to affect the world market. We don't need to replace all imported oil, we just need to affect the spare capacity equation and render OPEC powerless. Let me guess what is next, as mentioned earlier: "it will take 10 years so forget it." I love that one.

I do agree on your point that we have so much now that developing other alternatives doesn't make economic sense. That by itself is a blow to the "peak oil" theory.

And oil at market price is economic security. There is nothing out there right now to replace it.

UFO · **Posted:** Thu Dec 11, 2008 3:44 pm

midwest wrote:

We certainly CAN develope resources to affect the world market. We don't need to replace all imported oil, we just need to affect the spare capacity equation and render OPEC powerless. Let me guess what is next, as mentioned earlier: "it will take 10 years so forget it." I love that one.

How? We don't have the reserves to make a significant market share. Show me where I am wrong.

midwest wrote:

I do agree on your point that we have so much now that developing other alternatives doesn't make economic sense. That by itself is a blow to the "peak oil" theory.

Not really. Just because global demand is currently down doesn't mean it will not go back up to the point where the production resources cannot match it. Price will respond steeply again.

midwest wrote:

And oil at market price is economic security. There is nothing out there right now to replace it.

No, economic security is having stable energy prices. As long as we as a nation are not in control of our markets, meaning we do not have significant domestic resources to balance our consumption, our economy is at risk of what we are now going through.

midwest · **Joined:** Tue Apr 25, 2006 12:03 am **Posts:** 173

UFO wrote:

midwest wrote:

We certainly CAN develope resources to affect the world market. We don't need to replace all imported oil, we just need to affect the spare capacity equation and render OPEC powerless. Let me guess what is next, as mentioned earlier: "it will take 10 years so forget it." I love that one.

How? We don't have the reserves to make a significant market share. Show me where I am wrong.

midwest wrote:

I do agree on your point that we have so much now that developing other alternatives doesn't make economic sense. That by itself is a blow to the "peak oil" theory.

Not really. Just because global demand is currently down doesn't mean it will not go back up to the point where the production resources cannot match it. Price will respond steeply again.

midwest wrote:

And oil at market price is economic security. There is nothing out there right now to replace it.

No, economic security is having stable energy prices. As long as we as a nation are not in control of our markets, meaning we do not have significant domestic resources to balance our consumption, our economy is at risk of what we are now going through.

I think this is pointless. My position is we have no shortage of petroleum in this country. The higher the price is, the more we have to develope. And when prices are low? Even better. This reminds me of all the experts who said a few months ago that we would never see $3/gallon gas again. Boone Pickens comes to mind. There is plenty we can do in this country for energy indepenence.

UFO · **Posted:** Thu Dec 11, 2008 5:46 pm

midwest wrote:

I think this is pointless. My position is we have no shortage of petroleum in this country. The higher the price is, the more we have to develope. And when prices are low? Even better. This reminds me of all the experts who said a few months ago that we would never see $3/gallon gas again. Boone Pickens comes to mind. There is plenty we can do in this country for energy indepenence.

The problem is when prices are low there is no incentive to develop them. It's not like turning on your sink, it costs money to extract the stuff, so you need to make the profit margin to justify the expense. If prices are low, it's not feasible. And when prices are unstable companies can fall into the trap Exxon did in the 80's with Colorado shale -- build up some infrastructure based on $80 a barrel, then pull out leaving a ghost town and mass unemployment when prices collapse. No one wins that scenario.

midwest · **Joined:** Tue Apr 25, 2006 12:03 am **Posts:** 173

UFO wrote:

midwest wrote:

I think this is pointless. My position is we have no shortage of petroleum in this country. The higher the price is, the more we have to develope. And when prices are low? Even better. This reminds me of all the experts who said a few months ago that we would never see $3/gallon gas again. Boone Pickens comes to mind. There is plenty we can do in this country for energy indepenence.

The problem is when prices are low there is no incentive to develop them. It's not like turning on your sink, it costs money to extract the stuff, so you need to make the profit margin to justify the expense. If prices are low, it's not feasible. And when prices are unstable companies can fall into the trap Exxon did in the 80's with Colorado shale -- build up some infrastructure based on $80 a barrel, then pull out leaving a ghost town and mass unemployment when prices collapse. No one wins that scenario.

I agree with that. Check out this news from our largest user of fuel, the USAF.

http://www.msnbc.msn.com/id/23811258/

UFO · **Posted:** Thu Dec 11, 2008 6:56 pm

midwest wrote:

UFO wrote:

midwest wrote:

I think this is pointless. My position is we have no shortage of petroleum in this country. The higher the price is, the more we have to develope. And when prices are low? Even better. This reminds me of all the experts who said a few months ago that we would never see $3/gallon gas again. Boone Pickens comes to mind. There is plenty we can do in this country for energy indepenence.

The problem is when prices are low there is no incentive to develop them. It's not like turning on your sink, it costs money to extract the stuff, so you need to make the profit margin to justify the expense. If prices are low, it's not feasible. And when prices are unstable companies can fall into the trap Exxon did in the 80's with Colorado shale -- build up some infrastructure based on $80 a barrel, then pull out leaving a ghost town and mass unemployment when prices collapse. No one wins that scenario.

I agree with that. Check out this news from our largest user of fuel, the USAF.

http://www.msnbc.msn.com/id/23811258/

Yep, that's been around for a while The Germans used coal-to liquid in WWII. It's costly and polluting. The Air Force has also done extensive work and testing on biodiesel.

warp2diesel · **Posted:** Thu Dec 11, 2008 7:40 pm

Back in the 1970's the shortage in the oil supply was 2% less than the needs. This 2% shortage drove up the price and created long gas lines. Price controls on oil were tried and the situation got worse. Even if our domestic supply is small, providing that it is enough to satisfy the demand, prices will stabilize and there will be sufficient supply.
Hypothetically, having B5 in the pumps instead of pure mineral Diesel could be the difference between shortage and sufficient supply.
Another hypothetical, would be pirate hijacking of oil tankers, where the price would go up if the ship was not liberated in a reasonable period of time.
China or India could discover a new strain of e-coli that converted land fill garbage into oil, develop the process to make it work, and put it into production, then, the price of oil would drop.

When it comes to the companies that produce fuel and lubricants, they are like us, they want it as cheap as possible. Those who sell the raw material want as much for it as they can get.

Letter to Congress to Allow Domestic Oil Production

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