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View Full Version : It's Boom Time for Oil in the Gulf of Mexico, Despite a Ban on Drilling in Many Areas



megimoo
08-02-2008, 01:16 PM
Even as Republicans clamor for more, it's rarely been busier for offshore oil drilling

Voters listening to John McCain and Barack Obama debate the question of offshore drilling might come away with the impression that oil production in the United States depends on a single issue: keeping or removing a congressional moratorium that prohibits new offshore drilling along 85 percent of the Outer Continental Shelf. They might also get the impression that because the moratorium is in place, nothing much new is happening.


The Texaco Petronius platform is located in 1,754 feet of water, 90 miles due south of Mobile, Alabama, in the Gulf of Mexico.Neither conclusion is true.

The Gulf of Mexico, which is responsible for more than a quarter of the country's domestic oil supply, is actually in the midst of a drilling boom.

Oil companies are snatching up a slate of newly available leases. Indeed, three weeks from now, at a planned auction at the Royal Sonesta Hotel in New Orleans, the federal government will accept bids from oil companies on leases to 18 million acres in the Gulf of Mexico. The tracts, according to estimates, could potentially yield more than 400 million barrels of oil. When two similar sales were held back in March, bidders forked over a record $3.5 billion for drilling rights to more than 30 million acres.

In addition, new technology is allowing them to push further into deeper water. And oil production is up, despite continuing equipment shortages.

Even as McCain campaigns on a pledge to end the moratorium and Obama defends the ban, a bidding war for rights to millions of acres in the gulf is quietly unfolding. Each year, the government holds a handful of lease sales. The leases aren't permanentómany are issued for 10-year periods. As it happens, 1997 and 1998 were big years for leases, so in the past two years, "a lot of those leases were turned back," says Eileen Angelico of the Minerals Management Service, the Interior Department office that handles offshore leasing.

Many of these leases, in fact, became "inactive" over the past 10 years, meaning that oil companies let them idle while pursuing other projects or waiting for exploratory costs to fall or scarce equipment to become available. In 2007, the number of new leases jumped by about 25 percent from the previous two years, to 1,005, according to data complied by GOMExplorer, which gathers data on the gulf's oil and gas industry.

The leases have also gotten pricier. For a single tract, the average "high," or winning, bid this year has been about $6 million, compared to $4 million last year, and less than $1 million earlier in the decade.

The growing popularity of deepwater drilling has helped to fuel the rising bids. The first deepwater oil field, the Shell Cognac, didn't come online until the late 1970s, and in the 1980s and 1990s, deepwater development was slow.


http://www.usnews.com/articles/news/national/2008/08/01/its-boom-time-for-oil-in-the-gulf-of-mexico-despite-a-ban-on-drilling-in-many-areas_print.htm

lacarnut
08-02-2008, 02:08 PM
The US could more than double the amount taken out of the Gulf if the entire area was open for drilling. All of this brooha about offshore drilling would take many years to implement because of a shortage of crews and equipment. The Env. wackoes want to make you think you would see offshore platforms littered along the coastline from Seattle to CA and from ME to FL. in the near future. With the outrageous cost of drilling offshore, the big oil companies are cautious because of the lunatics in Congress plus they remember when oil sunk in price in the 80's.

What is amazing to me is that the liberal press and the nuts in DC hate the oil companies; they produce more revenues than any other industry in the US. If there is one industry that is head and shoulders above any country in the world, that is the expertise and technology of the US oil industry. US would not be in countries like Nigeria and Venezuela if that was not true. Since EXXON left Venezuela, their oil production has plummeted.