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Calls for offshore drilling signal national shift
High gas prices fuel a change in attitude
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Oil from a 1969 spill in the Santa Barbara Channel off Ventura covered 35 miles of coastline.
The oil drilling platform Gilda, in the Santa Barbara Channel, is one of 23 rigs from Long Beach to Point Conception.
By the numbers
- Federal leases off the California coast: 79.
- Producing federal leases: 43.
- Barrels of oil produced by those leases: about 26 million a year.
- Estimates of the remaining reserves in those leases: 455 million barrels of oil and 870 billion cubic feet of natural gas.
- Estimates for the 36 undeveloped leases: 1.1 billion barrels of oil and 450 billion cubic feet of gas.
- Estimates of recoverable oil off the California coast in the outer continental shelf under moratorium: 10.1 billion barrels.
- Estimates of that total off the coasts of Santa Barbara and Ventura counties: 1.85 billion barrels.
- Amount of oil consumed in the U.S.: 20 million barrels a day, or 7.3 billion a year.
- Amount of oil consumed worldwide: 84 million barrels a day, or 31 billion a year.
— Sources: U.S. Department of Energy and U.S. Minerals Management Services
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It took 4.2 million gallons of oil spewing from a blowout at a rig in the Santa Barbara Channel 40 years ago to ignite the modern conservation movement, trigger new environmental protections and lead to a moratorium on new offshore oil drilling.
But the high price of a gallon of gasoline is fueling a change in attitude.
Recent national polls indicate that seven out of 10 people support new drilling offshore along the federal outer continental shelf, which extends from three to 200 miles beyond the shore.
If costly new exploration in those areas is allowed, oil from those fields would not be available for 20 years, according to Department of Energy estimates. The amount of oil extracted would add a tiny percentage to meet global demand, with little promise of lowering pump prices.
Still, consumers' outcry about the soaring cost of gas might alter the country's energy policy.
Leaders in both parties have expressed willingness to allow new offshore drilling. The Republicans even punctuated their convention earlier this month with the chant: "Drill, baby, drill!"
Two weeks ago, the Santa Barbara County Board of Supervisors voted 3-2 to approve sending a letter to the governor, encouraging him to change a policy to allow more oil drilling off the shores of Santa Barbara County.
The letter is merely symbolic, and two candidates running to replace Supervisor Brooks Firestone, the pivotal third vote, have said they will vote to rescind the letter.
But coming from the county that incubated opposition to offshore drilling, the letter of support might be emblematic of the national shift.
In fact, the House on Tuesday approved a measure that would allow drilling 50 miles off a state's shore as long as the state went along. Beyond 100 miles, no state approval would be required.
"I think we're seeing oil company opportunism," said John Abraham Powell, president of Get Oil Out, a Santa Barbara-based group formed after the spill four decades ago. "They're trying to get more oil and sell more oil, but this idea that somehow this is going to reduce the cost of fuel or our dependence on foreign oil is patently false."
'Petroleum plus'
Bob Poole, a senior coordinator for the industry advocacy group Western States Petroleum Association, argues that drilling offshore and pursuing alternative forms of energy are not mutually exclusive.
"Our approach is petroleum plus," said Poole.
The group has had representatives speak to several local government boards, including the Ventura City Council last month as well as the Santa Barbara Board of Supervisors.
"Petroleum plus means that we clearly have to do everything we can in terms of conservation, operating efficiency and sustainable alternatives, but we also need to prudently develop our petroleum reserves," Poole said.
At least at the moment, it appears both the public and politicians are more amenable to drilling in areas that for years many considered off limits.
"Opinions about drilling offshore have shifted," said Mike Edwards, vice president of Venoco. The company operates three rigs — Grace, Gail and Holly — offshore in the Santa Barbara Channel, plus a handful of onshore facilities in Ventura and Santa Barbara counties. The company is also using new "directional drilling" from existing rigs to tap into reserves many miles away, Edwards said.
Every barrel pumped out domestically is one fewer barrel that has to be imported, Edwards said. And although the price people pay at the pump may have contributed to changing attitudes, what is more significant is the offshore safety record companies have had since the 1969 spill.
"We've shown you can operate in one of the most sensitive areas in the world and do it safely," Edwards said.
Since the disaster, rigs in federal waters — from two to 200 miles offshore — have spilled just 852 barrels, according to Minerals Management Services.
"That's less than a week's worth of 100 to 150 barrels of oil that seep naturally into the water," said John Romero, a spokesman for Minerals Management Services in Camarillo, which regulates drilling in federal waters off the California coast.
Environmentalists counter that offshore oil development is still risky, pointing to an oil spill off Vandenberg Air Force Base in 1997; a hydrogen sulfide leak from a Gaviota processing plant that same year; and gas leaks and PCB (polychlorinated biphenyls) spills from other platforms, not to mention numerous onshore spills during that time.
43 active offshore leases
There are 79 federal leases off the California coast, but oil is being pumped out of just 43. The 36 other leases are tied up in a sort of limbo because of litigation between California and the U.S. Department of the Interior.
Oil from the active leases is sucked up by 23 rigs that dot the coast from the waters south of Long Beach to north of Point Conception. Together, they pump about 26 million barrels of oil a year — a little more than the 20 million barrels of oil consumed in a single day in the United States — according to the Energy Information Administration.
Although estimates on the proven reserves off California's shores are pegged at about 455 million barrels, the amount of recoverable oil off the state's coast could be as much as 10 billion barrels, with as much as 2 billion barrels in areas off Santa Barbara and Ventura counties, according to Romero of Minerals Management Services.
But the benefit from tapping those reserves could be minor. According to an analysis done last year by the Energy Information Administration, opening up the new offshore oil leases in the lower 48 states would not boost total supply until after 2020. And it may only increase the estimated 2.2 million barrels of oil produced daily by about 250,000 barrels, the report said.
Reserves here seen as valuable
But with oil prices having reached $146 a barrel this year, the offshore reserves here are very valuable to oil companies.
Secretary of the Interior Dirk Kempthorne already has directed Minerals Management Service to start a five-year program for developing new leasing and exploration offshore.
"Clearly, today's escalating energy prices and the widening gap between U.S. energy consumption and supply have changed the fundamental assumptions on which many of our decisions were based," Kempthorne said this summer.
Up until this week, the agency was taking public comments on the plan and had solicited input from the governors of all 50 states. Gov. Arnold Schwarzenegger has said he continues to oppose more drilling offshore.
Many veterans of the fight over oil development offshore have said the argument is being unfairly framed.
"It's a big mistake to think this will have any effect on prices we pay at the pump," said Linda Krop, chief counsel for Environmental Defense Center in Santa Barbara, an environmental advocacy group set up in the wake of the 1969 spill.
This push to drill has more to do with politics and oil companies' "trying to capitalize on people's frustration to the price at the pump" than energy policy, Krop said.
The amount of supply offshore is a drop in the bucket in the total amount consumed by the world and won't even be accessible for two more decades, Krop said.
She pointed to the risks of a catastrophic spill that would hurt fishing and tourism and says the current debate diverts attention from a more forward thinking energy policy that includes alternatives to oil.
"We'd be creating a lot of impacts locally — 30 years or more of impacts — in exchange for a few months' supply of oil," Krop said. "It's just not worth it."
Posted by CloudyDaze on September 17, 2008 at 4:29 a.m. (Suggest removal)
I'd rather use up all the Saudis oil now at $90 per barrel. That's right use ALL THEIR OIL UP NOW. When oil gets to $250 barrel (and one day it will), THEN sell ours to them and the Chinese. Why use ours now when it's relatively cheap? Keep ours until it gets REALLY expensive (imagine the worldwide influence and prosperity we would have -like the Saudis now). BUY LOW - SELL HIGH (really high).
Posted by keepin_it_real on September 17, 2008 at 7:01 a.m. (Suggest removal)
TECHUSER,
Right on...Drill Baby Drill !!!!!
Keep American dollers in America.
We still need to work on alternative energies, but in the mean time, lets go after our own oil.
Lets not support terrorists.
Posted by tweetybyrdrt on September 17, 2008 at 7:19 a.m. (Suggest removal)
All this bill really does is make it harder to get to the oil we know is there. if you read the text of the bill you can see that. I feel this bill should be killed as soon as possible. we don't need a new bill, just let the ofshore drilling ban expire (it has to be reinstated each year). The only thing this bill does is let the Democrats say they voted for an energy bill.
Posted by keepin_it_real on September 17, 2008 at 7:28 a.m. (Suggest removal)
VAE4USC,
Yes that is bad. And it only took $43.00 to fill up my Nissan Sentra. That is bad too. :)
Posted by cmnelson7890 on September 17, 2008 at 7:41 a.m. (Suggest removal)
It is about time that we start drilling our own OIL. We have made the rest of the World Rich by our buy their OIL. When we have as much here or MORE. Let's do something for our PEOPLE! DRILL DRILL DRILL!
Posted by hotwildflower on September 17, 2008 at 8:07 a.m. (Suggest removal)
Here is my issue with this...the environment is the environment world over. Drilling here won't harm any more than drilling on the other side of the world if we are concerned about the environment, right?
Now, if we can keep American money here, then why not? Why fund these places that don't even like us to begin with.
I would like to believe that 40 years later we have better technology and safety standards than we did then.
"Drill Baby Drill!" That's right!
Posted by lawabider on September 17, 2008 at 8:39 a.m. (Suggest removal)
This article is lying to us, too! When I worked at Vetco Offshore back in the 80s, I did a report for corporate on OUR findings about producing what oil there is on the outer continental shelf of California alone -- and back then, the estimated time of delivery to vehicle was ten years... So, with today's techonology over that of 30 years ago, I'd say we could get ours even faster... And reports at that time indicated that there was 100 years of oil available to US AMERICANS!!! Same for Alaska... McCain/Palin 2008 -- DRILL, BABY, DRILL!!!
Posted by TaTaToothy on September 17, 2008 at 8:52 a.m. (Suggest removal)
Political Hypocrisy? Say it aint so........
Posted by hotwildflower on September 17, 2008 at 9:12 a.m. (Suggest removal)
Don't the guys (and girls) working these oil rigs make good money too?
Posted by bugmenot on September 17, 2008 at 9:28 a.m. (Suggest removal)
The House yesterday (not M.D.) passed a bill that would allow more offshore drilling without subsidies for big oil.
GWB said he'd veto the bill once it reached his desk. His issue with it is the bill makes it a requirement to drill 50 miles off the coast and the state must approve it.
Can somebody explain this to me? I just don't get it.
This chart also speaks for itself. The source isn't treehugger, they just host the image, the source is the US Energy Info Admin.
Posted by bugmenot on September 17, 2008 at 9:39 a.m. (Suggest removal)
Scapegoat-
I think the (R) needs to compromise on the issue. This could be a first step towards additional drilling once the public notices the safety. Earn the trust of the opposition by proving their points wrong. Show it is safe. Show it makes a difference on gas and the economy. Lower the anxiety level and you'll be able to get additional legislation passed.
The (R)'s are saying they want all or nothing. It's that type of non-partisanship that lost them the House and Senate and soon the POTUS. Isn't this a huge compromise by the (D)'s? Seize the moment.
Posted by oilworkerdave on September 17, 2008 at 9:46 a.m. (Suggest removal)
i read a sticker the other day, earth first, we can drill other planets later
Posted by petersterling on September 17, 2008 at 11:52 a.m. (Suggest removal)
Arctic Oil & Gas Corp.: Government Officials Should Vote for Energy Prosperity, Not Energy Poverty
Last update: 3:00 a.m. EDT Sept. 17, 2008
LAS VEGAS, NV, Sep 17, 2008 (MARKET WIRE via COMTEX) -- Arctic Oil & Gas Corp. (PINKSHEETS: AOAG) (351 million shares issued), a petroleum exploration company, is pleased to announce that the Company and partners have proposed $2.50 gasoline, 30% discounted natural gas and hundreds of millions of dollars in royalties to Santa Barbara County from a proposed, (40% AOAG equity) Santa Barbara OCS-State petroleum lease development project, on known oil accumulations containing between 250-500 million barrels oil.
The Company looks forward to the likelihood of the Congressional offshore oil moratorium expiring at the end of September, which could enable the proposed development and others to move forward.
AOAG has offered significant energy and financial benefits to Santa Barbara County Residents as well as local, State and national treasuries. The case for drilling is compelling:
1. $2.50 GASOLINE for Santa Barbara County residents and County vehicles
from AOAG production.
2. $2.50 GASOLINE for all hotel guests in Santa Barbara County.
3. County-wide, Compressed Natural Gas (CNG) car conversions facilities.
4. $1.50 CNG for Santa Barbara and Coast residents for flexi-fuel
vehicles.
5. Substantial Annual Grants to environmental study groups and renewable
energy programs.
6. Significant decrease in County-wide Air pollution from lower natural
reservoir seepage.
7. Lower C02 emissions for the County and State of California.
8. Significantly reduce greenhouse gas methane emissions from offshore
gas seeps.
9. Much cleaner Santa Barbara beaches and oceans by reduction in beach
tar balls.
10. Large new natural gas supplies from Bering Sea, landing via Santa
Barbara County, to lower America's C02 emissions from out of State
coal-fired power plants.
11. Increased local, State and National energy income streams, with
monies all staying inside America.
12. Provide Complete Santa Barbara energy self reliance and improve
America's energy security.
13. Significant high-paying local jobs boost.
14. Significant increased cash energy royalties to County of approximately
$250-500 million p.a. will improve the quality of life for all Santa
Barbara residents.
15. Special Proposed Community royalty payment from Bering Sea Gas imports
landings to fund FREE County-Wide clinics and a new FREE County
Hospital.
16. Lower-cost CNG for public transport-busses and vans, will enable
disadvantaged and senior citizens to travel more freely.
17. Natural Gas for County home heating and cooking at a 30% discount
to the prevailing rate.
18. Significant Increase in Local Property Values due to many of the
above benefits.
19. Increased State and Federal royalties will help treasuries balance
their budgets.
Posted by rebel123 on September 17, 2008 at 12:35 p.m. (Suggest removal)
The only real answer is alternative energy. Even with 100 new rigs, we're still dependent on a resource that is bad for the environment and a limited resource. Cars run on natural gas cleaner and cheaper. Why hasn't that been promoted? Oh, right....BIG OIL money. Duh.
Posted by bugmenot on September 17, 2008 at 12:49 p.m. (Suggest removal)
H. R. 6899
To advance the national security interests of the United States by reducing its dependency on oil through renewable and clean, alternative fuel technologies while building a bridge to the future through expanded access to Federal oil and natural gas resources, revising the relationship between the oil and gas industry and the consumers who own those resources and deserve a fair return from the development of publicly owned oil and gas, ending tax subsidies for large oil and gas companies, and facilitating energy efficiencies in the building, housing, and transportation sectors, and for other purposes.
Posted by Incognito247 on September 17, 2008 at 2:01 p.m. (Suggest removal)
People need to think a little bit beyond their own wallets on this one.
The only way to succeed in the "War on Terror" is to make oil obsolete! Quickly!
Don't be fooled. Any of our own supply will immediately be offset by reduction of mid-east output, thereby keeping prices high.
Posted by ReadBooks on September 17, 2008 at 2:52 p.m. (Suggest removal)
Couldn't we keep American dollars in America by investing in alternative energy in America?
Instead of wasting time and resources on a non renewable resource that won't change anything.
This is absurd, how can people be so dim.
Posted by truereality on September 17, 2008 at 3:56 p.m. (Suggest removal)
Amen ReadBooks. It's nice to finally see somebody smart comment on this site. Drilling will do absolutely nothing to help America. Investing as much money as possible into alternative energy is the wise thing to do. But when you a country run by people with a never ending erection for oil, this is what you get.
Posted by ridgewalker101 on September 17, 2008 at 6:12 p.m. (Suggest removal)
Rebel123
Q. Do you know where natural gas comes from and how you get it ?
A. Drilling done by oil companies
Posted by StayInSchool on September 17, 2008 at 8:44 p.m. (Suggest removal)
I like CloudyDays idea
Posted by venturajam on September 17, 2008 at 10:29 p.m. (Suggest removal)
Sell the oil we are drilling to China, that will force OPEC to lower prices. Meanwhile take money from sold domestic oil and pump that into alternative fuels sources like soybeans and corn. Force the car companies to build alternative fuel vehicles for domestic sale and, guess what, no dependence on foreign oil anymore. Hey, maybe we could stop fighting a war in oil rich mid east countries then too. Instead we put lipstick on a pitbull from oil rich Alaska and suddenly the country is fixated on change in the form of a female candidate. You had your chance for real change America, but you threw that away by not supporting Hillary for pres. Hell in a hand basket, I swear.
Posted by 2wheelsguy on September 17, 2008 at 11:29 p.m. (Suggest removal)
Increased support for increased off shore oil drilling demonstrates how stupid and desperate many of us have become. Increased drilling will benefit only the oil companies, not you or I. Gas prices will not be affected, but the environment will. Beaches will be polluted with more oil leaks and tar. Wake up, people! Stupidity resulted in the election of George Bush, and will soon result in the disappearance of all that is good about this country.
Posted by ReadMyLipsNoNewTaxes on September 18, 2008 at 8:16 a.m. (Suggest removal)
Drilling will not help?
Ummm, go to Moorpark college and take an econ 101 class. They talk about something called supply and demand.
Posted by swimmer on September 18, 2008 at 9:41 a.m. (Suggest removal)
incognito-
"The only way to succeed in the "War on Terror" is to make oil obsolete! Quickly!"
Yes! Let's also make cancer obsolete! Quickly!
"Don't be fooled. Any of our own supply will immediately be offset by reduction of mid-east output, thereby keeping prices high."
Billions of barrels of oil have been discovered in the US and the rest of the non-OPEC world since 1985. OPEC was producing 17 million barrels per day in 1985, and are now producing around 35 million barrels per day.
Posted by swimmer on September 18, 2008 at 9:49 a.m. (Suggest removal)
venturajam-
"Sell the oil we are drilling to China, that will force OPEC to lower prices."
If we find only a few hundred thousand barrels per day OPEC won't even notice.
"Meanwhile take money from sold domestic oil and pump that into alternative fuels sources like soybeans and corn"
Ok so oil companies no longer get any revenue. Did you think through the implications of that? How would you respond if you ran an oil company?
"Force the car companies to build alternative fuel vehicles for domestic sale and, guess what, no dependence on foreign oil anymore. "
Why not force them to build anti-gravity devices so that we don't need those nasty freeways anymore? Do you think that science is something you can just mandate?
Posted by swimmer on September 18, 2008 at 9:58 a.m. (Suggest removal)
2wheels-
"Increased drilling will benefit only the oil companies, not you or I"
Let's suppose offshore drilling comes to California. Here's a possible scenario, in which California offshore wells produce at a peak of 1 million barrels per day:
1) Offshore lease sales generate several billion in bid revenues for the public coffers.
2) Production royalties generate $20 million per day in revenues for the state and federal agencies to allocate.
3) Significant increase in quality jobs in southern California.
4) Maybe around $4 billion annually in state income taxes.
5) About $40 billion per year that stays in the US and does not go abroad buying foreign oil.
7200 wells have been drilled offshore California. One oil spill.
Many of us may be stupid and desperate, as you claim. Even more of us are economically illiterate, as you demonstrate.
Posted by swimmer on September 18, 2008 at 12:18 p.m. (Suggest removal)
bugmenot-
"GWB said he'd veto the bill once it reached his desk. His issue with it is the bill makes it a requirement to drill 50 miles off the coast and the state must approve it. Can somebody explain this to me?"
I'll explain it... it's really very simple. First, much of the oil potential lies within the 50 mile band. Restricting exploration to outside the 50 mile band is a thinly veiled way to essentially keep the restriction in place. Second, state approval obviously weakens federal legislation, does it not?
Your reference to the chart (like the repeated references to similar projections that appear in the press) is a symptom of national scientific illiteracy. Look at our school math and science test scores over the past 50 years. The result? We have a nation where people don't understand that a projection is not the same thing as a fact. The sliver you refer to in your graphic is a planning scenario, not a fact. Actual production could be many times the volume forecast, or it could be nothing at all. You don't know until you drill it. What do you think a similar planning scenario looked like for northern Alaska before Prudhoe Bay was discovered?
Posted by THX1138 on September 20, 2008 at 9:32 a.m. (Suggest removal)
I hope some effort goes into extracting all the oil through-out the Mid-West and Alaska - there's plenty there too.
The fact that oil co's haven't drilled domestically has to do with how cost effective it is and profit margin. If they can get it cheaper elsewhere that's what they'll do. The Middle East is still sitting on a lot of oil. And, like any other big corporation, oil co's have little concern about the quality of life [consumer cost] and providing domestic jobs.
Posted by swimmer on September 21, 2008 at 1:09 p.m. (Suggest removal)
"The fact that oil co's haven't drilled domestically has to do with how cost effective it is and profit margin."
This is a common public misperception. Go to http://tonto.eia.doe.gov/dnav/pet/his...
and you'll see there that the number of active drilling rigs in the US is higher than it's been at any time since early 1986. This past July, 5008 wells were drilled. In July 2004, 2636 wells were drilled.
"If they can get it cheaper elsewhere that's what they'll do."
Another misperception. Cost is only one factor in determining where companies look. They are more highly motivated by profit and reserves. If you could drill a $1 mm well to get a million barrels, or a $3 mm well to get 100 million barrels, which would you choose? Another important factor is risk.
"The Middle East is still sitting on a lot of oil."
The overwhelming majority of which is off limits to western oil companies.
"And, like any other big corporation, oil co's have little concern about the quality of life [consumer cost] and providing domestic jobs."
Correct in that oil companies think similarly to other big companies, but incorrect in the assumption that big companies have a cavalier disregard for quality of life. These companies know that if they misbehave, they face litigation, fines, bad PR, and possible exclusion.
Additionally, overseas operations often require domestic support staff. An American oil company exploring Madagascar, for example, would probably run the operation out of the US, and a big part of the service operations, such as drilling and seismic data acquisition and processing, would be handled by US based companies and staff. There would probably be a small office in Madagascar. If the venture eventually proved successful, then it's true that more jobs would migrate to Madagascar, and more locals would be hired. But we are talking about a global commodity and global markets. Why is it better for the world in general to employ relatively wealthy Americans in this case than the relatively poor natives of Madagascar?
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