Drill baby drill - a second reality check

[Javaman]

http://www.energybulletin.net/node/52299

Last week President Obama announced that he would open federal waters off the Atlantic coast from Delaware south, portions of the eastern Gulf of Mexico and portions of the Arctic Ocean north of Alaska to oil and gas exploration and development.

>snip<

The eastern GOM is slightly more favorable for oil compared to federal waters off the east coast but not a whole lot more favorable. According to the government, that region has 4 billion barrels of technically recoverable oil. With luck, it may produce a billion barrels of oil.
A billion barrels sounds like a lot of oil, but if it is produced over the course of 30 years, the average production rate is only a bit over 90,000 b/d. In a country that presently consumes around 19 mb/d of liquid hydrocarbons, 90,000 b/d is less than 0.5%.

>snip<

Another issue to consider is that offshore oil development, particularly far offshore, can be very expensive. Oil companies probably aren’t going to consider developing fields off the Atlantic coast or in the eastern GOM unless a field is at least 25 million barrels in size. In the Arctic Ocean, it may require a field 100 million barrels or more in size if the field is far offshore. Oil that is in many small and widely distributed fields may never be developed.

[abqmufc]

1. Carlsbad, NM quake linked to oil and gas development.....

Most local news report the same thing. Most probably are not surprised by the link. However, having just spent the last week on the Colorado Plateau where much of the uranium, coal and natural gas will be mined it does make me worry about the geology of the Plateau.

"CARLSBAD — A small but unmistakable earthquake briefly shook Carlsbad just after 6 p.m. Saturday, a county official confirmed.

Eddy County Emergency Manager Joel Arnwine was in touch with experts at the U.S. Geologic Survey immediately following the event. He said the tremor measured 4.2 and was centered about 19 miles west northwest of Carlsbad, according to USGS instruments.

Arnwine said further research had shown him that the center was about 9 miles west of Brantley Dam, in an oil producing area known as Indian Basin.

Earthquakes in this area are often caused by the earth settling due to the extraction of oil and gas in large quantities, he said."

http://www.elpasotimes.com/newmexico/ci_14772244

[Merchant Marine]

2. On the other hand, I've been hearing in my buddies in the GOM that the industry recovered overnight

Every single ship in layup is re-activating, and one of my buddies who's been jobhunting for the past 3 months just got a DP3 job on a drillship coming out of layup.

Its one hell of a stimulus.

[pscot]

3. Hard to believe that activity is connected

to this latest announcement. More likely it has to do with the perception that a general economic recovery will boost demand, or maybe just a supply squeeze in world oil markets. The price of oil is back up around $85 per bbl. That's the highest it's been since the collapse. Gasoline is up too. The wheel turns.