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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (313)	6/12/2008 8:41:49 PM
From: Brumar89	Read Replies (1) \| Respond to of 86355

There is a big difference between "reserves" and "territorial waters". Yes, reserves are proven. What is under closed waters is unknown for certain. They contain no "reserves" but not necessarily no exploitable oil. Offshore leasing is largely limited to offshore TX, LA, MS, and AL. Not a very large territory. And that still doesn't address their reluctance to drill in areas where they have permission and leases. You're implying they are reluctant if a lease was issued in 2006 and they aren't drilled in June of '08. Things don't work that fast. There is a lot of drilling going on in the western GLM all the time. Frankly they seem to like the status quo. If that were so, the industry wouldn't be lobbying for access to new areas.

To: Road Walker who wrote (313)	6/13/2008 11:24:47 PM
From: TimF	Read Replies (1) \| Respond to of 86355

As Brumar points out, we know a lot less about the off limits areas, they don't have much proven reserves, but they may have a lot more oil than the 15% that drilling has been allowed in. As for drilling in the 15%, a lot of it is happening. Why doesn't it happen in some other spots within that 15%? Probably because it doesn't look like it will have a highly positive rate of return at this time. Why are they not doing that? And why should we give them permission until they use the resources they have? Because 1 - They are using the resources they have when it makes sense for them to do so. I'm not saying their estimates are perfect, but they aren't a bunch of idiots who are intentionally going to leave many billions of dollars on the table. 2 - If more exploration is allowed in the other 85% we get a better idea about what oil is there, and we probably will find some spots that are make much more sense to drill in than the sports where drilling is allowed but not happening, and not being planned. Frankly they seem to like the status quo. With their record profits whats not to like? What's the incentive? They may have record profits, but the incentive to drill, when a good deposit is found, is to get even larger profits. And that incentive increases as prices go up.