4 ms·

How much oil is in off the East Coast passive margin? 20 bboe (which is twice the best estimates of MMS)? That would make it on par with the North Slope in Al

by 3am 15y ago

How much oil is in off the East Coast passive margin? 20 bboe (which is twice the best estimates of MMS)? That would make it on par with the North Slope in Alaska, an elephant field. That's 3 years or less of US consumption, or about 7 months of global consumption. BFD. And that comment about the Deepwater Horizon not being able to drill closer to the shore... that's eyepopping. The shallow-water GoM in the Mississippi Delta has been drilled for decades. I don't want to use an inappropriate tone for HN, but you should really take stock of how you've been misinformed so badly and seek to educate yourself.

temphn 15y ago
And that comment about the Deepwater Horizon not being able to drill closer to the shore... that's eyepopping. The shallow-water GoM in the Mississippi Delta has been drilled for decades. Shallow water drilling has been disincentivized in favor of deep water drilling for several years in part because of tourism and NIMBYism concerns. People do not want to see drills from the shore. This is well known in the sector. You can find articles on the topic before 2010 by using archive search in Google News. http://www.stpns.net/view_article.html?articleId=10841083261061130 http://www.stpns.net/view_article.html?articleId=10841083261... July 13, 2006 Through financial incentives, the House bill encourages states to allow offshore drilling. For drilling within 12 miles of their coastlines, the states collect 75% of all royalties. They get 50% of all royalties for drilling up to 100 miles offshore. Louisiana, whose lawmakers authored the bill, stands to collect an additional $50 billion over the next 30 years. South Carolina, with no offshore drilling in its history, has no idea of the potential payoff. The South Carolina concern appears to be more turf protection by the tourism lobby, and that includes Gov. Mark Sanford. South Carolina's $10 billion tourism industry could be threatened, according to Sanford, *even though the state could restrict offshore drilling to a distance more than 100 miles out*. The federal authority is demarcated at 200 miles out, and beyond that is open international waters. Notice: tourism concerns (and NIMBY issues, not mentioned in this piece) are cited as a reason to move drilling further offshore, in part by giving financial incentives (50% rather than 75% of royalties) for locating drills out of sight. Note also that Louisiana's lawmakers authored the bill. You can dig in more if you wish, but there were a variety of reasons why lawmakers preferred drilling further away from shores. And Republicans were just as culpable: http://www.time.com/time/nation/article/0,8599,166334,00.html http://www.time.com/time/nation/article/0,8599,166334,00.htm... July 3, 2001 "Floridians have spoken loud and clear, and their voices have been heard by President Bush," Florida Gov. Jeb Bush said Monday after Interior Secretary Gale Norton announced the administration would ask Congress to let oil companies drill on about 1.5 million more acres in the Gulf of Mexico. That's just a quarter of the roughly 6 million acres that the Clinton administration first proposed opening for leasing in 1997 and that the Bush/Cheney energy plan had earmarked for drilling. Speaking from his parents' home in Kennebunkport, Gov. Bush called the scaled-back proposal a victory for "Florida's fight to protect our coastline" and told Bush the words he's going to be hearing a lot for the next few years: not in my back yard. "Any lease sales that do occur in the 181 area" — a patch of energy-rich ground in the derrick-free eastern part of the gulf — "will occur off the coast of Alabama, not Florida," he said. The newly proposed area extends to 100 miles south of Mobile and gets no closer than about 200 miles west of Tampa. That's actually OK with the folks in Alabama — they already have plenty of drilling platforms out there, as does most of the Gulf coastline stretching west to Texas. And now it's OK with the folks — the Republicans, anyway — in Florida, who are worried about their white sandy beaches and the mammoth tourism industry that grows on them. The compromise was made (and somehow you don't expect Norton to be overruled later in the week) to appease the state GOPers whom Bush offended late last month when he came to Florida to strike an environmental pose at the Everglades National Park with a bunch of Democrats. ... The plan allows Ari Fleischer to say the president's new plan is "environmentally sensitive and balanced" (although that's what they said about the old plan). It allows Jeb Bush, up for a tough re-election in 2002, to imagine that his brother's winning the presidency was actually a good thing for him politically. Operative phrase: "gets no closer than about 200 miles west of Tampa". A series of bills and regulations like this, some of them simply interpretations, led to an overall incentive to locate platforms further and further away from the coasts, in uncharted waters. Now, one can claim that tourism was a legitimate reason for these rules. Perhaps. But one must also concede that regulation was a nontrivial factor in forcing these platforms away from the shore.
- 3am 15y ago
  I have no incentive for further discussion with you, so I'm not sure why I'm bothering to respond. I'll just say that I'm well aware of the politics and technical issues in the E&P sector as well as domestic and international energy consumption (across all fuel types), and that you are on the border of being completely uninformed on this issue. Frankly, it's sad. You have an opinion, and have used Google to find articles that validate it... and here I am, having read RigZone for years, participating on Oil Drum, having independently given myself an undergrad+ education in petroleum geology, having invested real money in oil companies and reading dozens if not hundreds of 10-Qs and 10-Ks for domestic small to mid cap producers (whose assets span onshore, offshore, UDW, shale, and bitumen). And nothing I can say will jolt you out of your comfortable mindset where there is abundant petroleum for the taking if only DC would step back and let capitalism run its course.
  - gruseom 15y ago
    Since you know the industry so well, what is your opinion of this? http://www.npr.org/2011/09/25/140784004/new-boom-reshapes-oil-world-rocks-north-dakota http://www.npr.org/2011/09/25/140784004/new-boom-reshapes-oi... "[T]he US could be poised to pass Saudi Arabia and overtake Russia as the world's largest oil producer" - true?
    - 3am 15y ago
      The 2T bboe is likely talking about in place reserves, not recoverable reserves. See http://en.wikipedia.org/wiki/Oil_reserves#Proven_reserves http://en.wikipedia.org/wiki/Oil_reserves#Proven_reserves for a discussion of the definitions 'in place', 'proven', and 'probable'. Fracking is still a young-ish technique, and last I knew the recovery rates were less than 5%. I don't think it will get above 10% even with technology improvements. Which is still a boatload of Oil / NG / NGL. It's still just 8 years of global demand at current rates.

by 3am 15y ago

temphn 15y ago

And that comment about the Deepwater Horizon not being able to drill closer to the shore... that's eyepopping. The shallow-water GoM in the Mississippi Delta has been drilled for decades. Shallow water drilling has been disincentivized in favor of deep water drilling for several years in part because of tourism and NIMBYism concerns. People do not want to see drills from the shore. This is well known in the sector. You can find articles on the topic before 2010 by using archive search in Google News. http://www.stpns.net/view_article.html?articleId=10841083261061130 http://www.stpns.net/view_article.html?articleId=10841083261... July 13, 2006 Through financial incentives, the House bill encourages states to allow offshore drilling. For drilling within 12 miles of their coastlines, the states collect 75% of all royalties. They get 50% of all royalties for drilling up to 100 miles offshore. Louisiana, whose lawmakers authored the bill, stands to collect an additional $50 billion over the next 30 years. South Carolina, with no offshore drilling in its history, has no idea of the potential payoff. The South Carolina concern appears to be more turf protection by the tourism lobby, and that includes Gov. Mark Sanford. South Carolina's $10 billion tourism industry could be threatened, according to Sanford, *even though the state could restrict offshore drilling to a distance more than 100 miles out*. The federal authority is demarcated at 200 miles out, and beyond that is open international waters. Notice: tourism concerns (and NIMBY issues, not mentioned in this piece) are cited as a reason to move drilling further offshore, in part by giving financial incentives (50% rather than 75% of royalties) for locating drills out of sight. Note also that Louisiana's lawmakers authored the bill. You can dig in more if you wish, but there were a variety of reasons why lawmakers preferred drilling further away from shores. And Republicans were just as culpable: http://www.time.com/time/nation/article/0,8599,166334,00.html http://www.time.com/time/nation/article/0,8599,166334,00.htm... July 3, 2001 "Floridians have spoken loud and clear, and their voices have been heard by President Bush," Florida Gov. Jeb Bush said Monday after Interior Secretary Gale Norton announced the administration would ask Congress to let oil companies drill on about 1.5 million more acres in the Gulf of Mexico. That's just a quarter of the roughly 6 million acres that the Clinton administration first proposed opening for leasing in 1997 and that the Bush/Cheney energy plan had earmarked for drilling. Speaking from his parents' home in Kennebunkport, Gov. Bush called the scaled-back proposal a victory for "Florida's fight to protect our coastline" and told Bush the words he's going to be hearing a lot for the next few years: not in my back yard. "Any lease sales that do occur in the 181 area" — a patch of energy-rich ground in the derrick-free eastern part of the gulf — "will occur off the coast of Alabama, not Florida," he said. The newly proposed area extends to 100 miles south of Mobile and gets no closer than about 200 miles west of Tampa. That's actually OK with the folks in Alabama — they already have plenty of drilling platforms out there, as does most of the Gulf coastline stretching west to Texas. And now it's OK with the folks — the Republicans, anyway — in Florida, who are worried about their white sandy beaches and the mammoth tourism industry that grows on them. The compromise was made (and somehow you don't expect Norton to be overruled later in the week) to appease the state GOPers whom Bush offended late last month when he came to Florida to strike an environmental pose at the Everglades National Park with a bunch of Democrats. ... The plan allows Ari Fleischer to say the president's new plan is "environmentally sensitive and balanced" (although that's what they said about the old plan). It allows Jeb Bush, up for a tough re-election in 2002, to imagine that his brother's winning the presidency was actually a good thing for him politically. Operative phrase: "gets no closer than about 200 miles west of Tampa". A series of bills and regulations like this, some of them simply interpretations, led to an overall incentive to locate platforms further and further away from the coasts, in uncharted waters. Now, one can claim that tourism was a legitimate reason for these rules. Perhaps. But one must also concede that regulation was a nontrivial factor in forcing these platforms away from the shore.

3am 15y ago
I have no incentive for further discussion with you, so I'm not sure why I'm bothering to respond. I'll just say that I'm well aware of the politics and technical issues in the E&P sector as well as domestic and international energy consumption (across all fuel types), and that you are on the border of being completely uninformed on this issue. Frankly, it's sad. You have an opinion, and have used Google to find articles that validate it... and here I am, having read RigZone for years, participating on Oil Drum, having independently given myself an undergrad+ education in petroleum geology, having invested real money in oil companies and reading dozens if not hundreds of 10-Qs and 10-Ks for domestic small to mid cap producers (whose assets span onshore, offshore, UDW, shale, and bitumen). And nothing I can say will jolt you out of your comfortable mindset where there is abundant petroleum for the taking if only DC would step back and let capitalism run its course.
- gruseom 15y ago
  Since you know the industry so well, what is your opinion of this? http://www.npr.org/2011/09/25/140784004/new-boom-reshapes-oil-world-rocks-north-dakota http://www.npr.org/2011/09/25/140784004/new-boom-reshapes-oi... "[T]he US could be poised to pass Saudi Arabia and overtake Russia as the world's largest oil producer" - true?
  - 3am 15y ago
    The 2T bboe is likely talking about in place reserves, not recoverable reserves. See http://en.wikipedia.org/wiki/Oil_reserves#Proven_reserves http://en.wikipedia.org/wiki/Oil_reserves#Proven_reserves for a discussion of the definitions 'in place', 'proven', and 'probable'. Fracking is still a young-ish technique, and last I knew the recovery rates were less than 5%. I don't think it will get above 10% even with technology improvements. Which is still a boatload of Oil / NG / NGL. It's still just 8 years of global demand at current rates.