4 ms·

A Tale Of Two Oil States

14 points by teawithcarl 13y ago

rayiner 13y ago
That $80 billion number is fictional. The proper measure of the net income from extractive services must subtract the value of the decrease in oil in the ground (you don't count selling off your family jewelry as net positive wealth generated!). Valuing oil in the ground is difficult, but the net value generated by that extraction is a fraction of the 80 billion number.
- deleted 13y ago
  [deleted]
beedogs 13y ago
That article link doesn't work for me. Here's one that does: http://online.wsj.com/article/SB10001424127887324695104578416871045535226.html?mod=googlenews_wsj http://online.wsj.com/article/SB1000142412788732469510457841... Also, wow, the comments at the bottom of that story are shockingly dimwitted.
issa 13y ago
Treating capital as profit is just one small part of the problem. The larger issue being that fossil fuels are not sustainable. Other countries are rocketing forward (solar in germany, wind in denmark, etc) while the US is holding on to a past which is killing us.
jedberg 13y ago
I think the author is trying to convince people that California should drill more. But all this did was convince me that CA made the right decision.
smutticus 13y ago
So someone who wants to drill in CA paid Rupert Murdoch to print this article. This is propoganda, not journalism.
- vm 13y ago
  It's in the opinion section so it's fair game. (FWIW I'm against drilling too)
- joshuaheard 13y ago
  What facts in this article do you dispute? This is a carefully researched and reasoned article that is consistent with what I know about California after living there 40 years. California's anti-drilling stance has existed since they banned offshore drilling after the Santa Barbara oil spill. The Sierra Club was formed in California (named after the mountain range there) and has a history of environmental activism. I don't think this article is much of a surprise to anyone.
  - jackowayed 13y ago
    Regardless of whether everything that's said is true, it is very clearly written as a persuasive piece rather than a purely informative one. Propaganda doesn't have to contain outright lies. However, I would certainly take issue with, "The judge ordered an environmental review of the drilling process [fracking] that Texas, North Dakota and other states have safely regulated for years." There are serious safety and environmental concerns about fracking. These include its significant water usage and the possibility that fracking might be able to trigger major earthquakes. These are both issues that are especially important to California. Saying that fracking has been "safely regulated" seriously glosses over legitimate concerns that other states have accepted as the cost of the associated economic prosperity
  - lsc 13y ago
    It was more the tone. It was pretty blatantly playing the "real Americans" against the "coastal elites" in a way that can only be called blunt and amateurish. On a not particularly related note, speaking as a tax-paying Californian who buys gas, The actions of California seem perfectly rational. The oil is finite; once you extract it, all you have is land that costs a bunch of money to clean up. You might as well get as much as possible out of it. Let Texas and the rest of the world sell their gas and oil into the current market; I feel pretty comfortable saying that the price of oil, long term, has quite a lot of upside. Nothing wrong with sitting on an appreciating asset.
croatiankp 13y ago
Well, at least we know where the WSJ stands on drilling and the environment :).
Killah911 13y ago
"if California were more like Texas" I'm glad I was lying down when I read this line. Even if I was sitting in a chair I would have fallen out of it laughing as hard as I did. This reads more like PAC Campaign Ad than a news Article...
surrealize 13y ago
> California has the natural resources and technical expertise to be the next Texas if it wants to be. What it needs is the political will. California Governor Jerry Brown at least says he wants to drill, but his dominant Democratic Party is so beholden to the already-rich greens that the state is paralyzed. Those poor oil companies, being outspent by the Green Party spending juggernaut!
MarkMc 13y ago
The article does seem biased. It says, "California has huge reservoirs offshore" but doesn't mention the enormous BP oil spill in 2010.
jmspring 13y ago
CA has off shore reserves - probably true Requiring fracking to get to those reserves has challenges and has multiple concerns outlined including -- http://www.everettassociates.net/article/3509-new-study-highlights-environmental-risks-from-fracking http://www.everettassociates.net/article/3509-new-study-high... I will say this, CA is a bit more cautious than TX in general, and given the recent fertilizer explosion in TX, I'm ok with more regulation than less.

14 points by teawithcarl 13y ago

That $80 billion number is fictional. The proper measure of the net income from extractive services must subtract the value of the decrease in oil in the ground (you don't count selling off your family jewelry as net positive wealth generated!). Valuing oil in the ground is difficult, but the net value generated by that extraction is a fraction of the 80 billion number.

deleted 13y ago
[deleted]

beedogs 13y ago

That article link doesn't work for me. Here's one that does: http://online.wsj.com/article/SB10001424127887324695104578416871045535226.html?mod=googlenews_wsj http://online.wsj.com/article/SB1000142412788732469510457841... Also, wow, the comments at the bottom of that story are shockingly dimwitted.

issa 13y ago

Treating capital as profit is just one small part of the problem. The larger issue being that fossil fuels are not sustainable. Other countries are rocketing forward (solar in germany, wind in denmark, etc) while the US is holding on to a past which is killing us.

jedberg 13y ago

I think the author is trying to convince people that California should drill more. But all this did was convince me that CA made the right decision.

smutticus 13y ago

So someone who wants to drill in CA paid Rupert Murdoch to print this article. This is propoganda, not journalism.

vm 13y ago
It's in the opinion section so it's fair game. (FWIW I'm against drilling too)
joshuaheard 13y ago
What facts in this article do you dispute? This is a carefully researched and reasoned article that is consistent with what I know about California after living there 40 years. California's anti-drilling stance has existed since they banned offshore drilling after the Santa Barbara oil spill. The Sierra Club was formed in California (named after the mountain range there) and has a history of environmental activism. I don't think this article is much of a surprise to anyone.
- jackowayed 13y ago
  Regardless of whether everything that's said is true, it is very clearly written as a persuasive piece rather than a purely informative one. Propaganda doesn't have to contain outright lies. However, I would certainly take issue with, "The judge ordered an environmental review of the drilling process [fracking] that Texas, North Dakota and other states have safely regulated for years." There are serious safety and environmental concerns about fracking. These include its significant water usage and the possibility that fracking might be able to trigger major earthquakes. These are both issues that are especially important to California. Saying that fracking has been "safely regulated" seriously glosses over legitimate concerns that other states have accepted as the cost of the associated economic prosperity
- lsc 13y ago
  It was more the tone. It was pretty blatantly playing the "real Americans" against the "coastal elites" in a way that can only be called blunt and amateurish. On a not particularly related note, speaking as a tax-paying Californian who buys gas, The actions of California seem perfectly rational. The oil is finite; once you extract it, all you have is land that costs a bunch of money to clean up. You might as well get as much as possible out of it. Let Texas and the rest of the world sell their gas and oil into the current market; I feel pretty comfortable saying that the price of oil, long term, has quite a lot of upside. Nothing wrong with sitting on an appreciating asset.

croatiankp 13y ago

Well, at least we know where the WSJ stands on drilling and the environment :).

Killah911 13y ago

"if California were more like Texas" I'm glad I was lying down when I read this line. Even if I was sitting in a chair I would have fallen out of it laughing as hard as I did. This reads more like PAC Campaign Ad than a news Article...

surrealize 13y ago

> California has the natural resources and technical expertise to be the next Texas if it wants to be. What it needs is the political will. California Governor Jerry Brown at least says he wants to drill, but his dominant Democratic Party is so beholden to the already-rich greens that the state is paralyzed. Those poor oil companies, being outspent by the Green Party spending juggernaut!

MarkMc 13y ago

The article does seem biased. It says, "California has huge reservoirs offshore" but doesn't mention the enormous BP oil spill in 2010.

jmspring 13y ago

CA has off shore reserves - probably true Requiring fracking to get to those reserves has challenges and has multiple concerns outlined including -- http://www.everettassociates.net/article/3509-new-study-highlights-environmental-risks-from-fracking http://www.everettassociates.net/article/3509-new-study-high... I will say this, CA is a bit more cautious than TX in general, and given the recent fertilizer explosion in TX, I'm ok with more regulation than less.