Should NC lift the ban on oil drilling of it's coastline?

[ChiefJoJo]

Rep. Sue Myrick of Charlotte has proposed a bill that would lift the ban on drilling for oil of the NC coast.

News coverage here and here.

[sax184]

Rep. Sue Myrick of Charlotte has proposed a bill that would lift the ban on drilling for oil of the NC coast.

News coverage here and here.

[1979Heel]

Dumb idea. It bears repeating that we cannot drill our way out of the liquid fuels crisis we are beginning to face in earnest. If you take the low and high estimates for Alaska's ANWR and put it next to current US daily consumption of oil, the whole of ANWR will yield 7 months to 2.5 years of supply.

Here's an analogy. You and your salary are a proxy for the entire USA. Somebody comes to you and says, "if you dig a hole in your backyard you'll make a mess and ruin a good portion of your yard, but you will find anywhere from 7 months to 2.5 years salary in the yard!"

Pretend you make $61,500, which the IRS said was median (household, I assume) income in the USA in February of this year.

That means you could find anywhere from $35,875 in the backyard to $153,750 in the backyard. I admit, the latter sounds pretty good! Of course, it's going to cost a good deal of money to dig to find those riches in your backyard, and by the way, it could take 5 or 10 years to see the first nickel, and it will take you about 20 years to get all the money out.

So, on an annual basis, sometime in the future, you will make an extra $150 to $640 per month, for about 20 years. Put another way, before you pay the costs of digging in your yard and the fact that your house (or your coastal tourism industry) has declined in value because your yard is ruined, you'll have 3 to 12% more cash on hand.

I don't think I could classify this as a winning proposition, much less a solution.

[DB78]

I haven't seen it in the responses thus far, but from the general population I have noticed that the people who generally are the most opposed to drilling for more domestic oil (whether off the coast of NC, FL, in Alaska and numerous other places) are also the ones that are usually oblivious to why gas prices are high. I say sure, allow it.

Drilling off much of the Atlantic Coast would do quite a bit of good if the goal is to reduce the price of oil and thus keep inflation from putting a severe hurtin' on the middle and lower classes. The US gets oil from nearly 3 dozen countries. Considering the US is still by far the largest consumer of oil, if we are able to have just 10% more of our oil coming to us domestically, it will make the price of oil drop quite a bit. Worldwide demand is growing like a weed, so at the least, more domestic oil will keep oil from reaching $200 within 2-3 years from now.

I so badly want an electric car, but thus far I cannot afford $90,000 to spend on one that can go a few hundred miles between charges. (the Tesla Roadster is the only one produced but other companies like Zap and Fisker have made promises) It's quite a tight rope: The higher oil prices stay high, the more incentive for startups and other private firms to do more research for alternatives to oil in transportation. That of course is good for numerous reasons. However, the longer the US oil companies wait to produce more oil domestically instead of buying it from OPEC members and other nations for $130/barrel, the sooner that barrel will become $150 and $200. That translates into your turkey sandwich that cost $4 in 2005 costing $7-8 in 2010. Ditto on many other goods skyrocketing in price.

Or we could start demanding that Congress stop spending like crackheads looking for a fix and that they don't give bailouts to failed homebuyers and banks. Then the value of the US dollar doesn't keep flowing further down the toilet. That means oil, which is traded in dollars around the world, goes way down in price. Stopping the war in Iraq (over $100 Billion per year) would bring back some of the value of the US dollar too, thus dropping the price of oil too.

I could go on for hours on this topic and issues that are intimately tied to it.

Want to drill more? Go for it. Or we get to feel the pain far worse than we have so far economically.

[monsoon]

I doubt there is enough oil out there to make any difference. Unfortunately this is the kind of short sighted idea that we don't need. Sue Myrick and our celebrity senator Elizabeth Dole would do the state a lot more good if they were instead proposing so develop alternative energy technologies and alternative energy production in the state of NC. Unfortunately both belong to a political party that is tied to big oil so don't expect anything significant from them. The people of this state have the opportunity to vote these two out office, who basically have done nothing for NC, and instead vote in people that might provide for a better future for this state. Will they do it? Probably not.

[Sundodger]

This is a great idea, especially if the state could get 50% of the revenues ala Wyoming and there is a trust and clean-up plan in place in case something awful happens. One of the biggest crimes in this country is the massive export of our nations wealth to buy fuel. Why should we enrich the rest of the world instead of keeping that wealth at home? The nation has a major fuel problem and this would go a long way to solving that issue.

Dumb idea. It bears repeating that we cannot drill our way out of the liquid fuels crisis we are beginning to face in earnest. If you take the low and high estimates for Alaska's ANWR and put it next to current US daily consumption of oil, the whole of ANWR will yield 7 months to 2.5 years of supply.

[sax184]

This is a great idea, especially if the state could get 50% of the revenues ala Wyoming and there is a trust and clean-up plan in place in case something awful happens. One of the biggest crimes in this country is the massive export of our nations wealth to buy fuel. Why should we enrich the rest of the world instead of keeping that wealth at home? The nation has a major fuel problem and this would go a long way to solving that issue.

There is tons of oil in ANWR. It equals 30 years of Saudi oil imports. It is a crime that we are not drilling there. Bill Clinton could have got the ball running in 1995 and blew it. Instead of enriching some royal monopoly, we could be keeping our nation's wealth home.

[Spatula]

Offshore drilling really screws up beaches. Large chunks of the gulf coast have oil mixed in the sand, mixed in the water. It gets pretty nasty. There's also the oil derricks interrupting the view from the coast.

High petroleum prices are a sign that our economic model is unsustainable. We'd be better off upgrading our transportation and power infrastructure instead of delaying the inevitable.

[DB78]

^^^^^

Sounds nice. What to do in the intervening 10-15 years from when that decision to do so is made to when a noticeable difference is made?? It's nice to have pie in the sky thoughts and ideals. But how about some reality too? I don't think anyone here is going to enjoy $200/barrel oil in 2-3 years time even after US oil usage has gone down. People are going to be P'd off that even with smaller cars and driving less, prices are still going up due to skyrocketing demand increases in China and India and from the continued devaluation of the US dollar that our Congress is settled on pushing forward so they can serve their banking masters.

How fun is that trip to Subway that cost $6 in 2004 in comparison to $12 in 2010 going to be? Not much fun at all. I have taken several trips to Europe. I want more public transportation in the US. But what to do with the reality that it's never going to really happen here in the US in the same fashion? The US is so sprawled out. The US is one continuous shopping mall for the most part with gas stations and fast food restaurants in between. Not exactly laid out for the mass transit I wish were possible en masse.

I really could talk about this for hours. Basically, let's have a few less clouds in the sky and few more heads reading about the energy markets and economics. Sorry to be the one peeing on everyone's idealistic parade, but while our nation sits and does nothing, oil is getting more expensive and other countries like China and Russia are looking to drill not far from our own coastline.

There are some great things being worked on by some of the auto manufacturers to offset increased gas prices, but that's only part of the equation. The next generation Prius will get better MPG, Hyundai is making some bold hybrid statements, most manufacturers are bringing diesels to the US too. Until a $25,000 fully electric 4 door, street legal car is on the road, oil is not going away from the car market. The closest to that will be one car that costs $90,000 (Tesla) plus and another expected to cost $70,000 (Fisker) plus when released next year. Subaru and Mitsubishi are doing some good things, but their prototype electric cars are still very inferior to most consumers' needs.

Ok, I'll stop before I type pages worth.......

[monsoon]

The primary reason's that suburban spawl exist here are due to governmental policies towards taxation, road building, and property rights. Fuel prices also affect it somewhat, but fuel prices in regards to commuting can be dealt with by driving more efficient transportation. If someone replaces their 15mpg SUV with a 35mpg vehicle, they have more than made up the additional cost of fuel. There are a lot of suburbs surrounding Paris for example.

Where the price of oil really hurts is because over the last 25 years we have developed an economy that depends upon huge amounts of fossil fuels to transport consumables from 1/2 way around the world. So that tomato that you just bought in a Harris Teeter that came from Canada or Chile is going to cost a lot lot more because of transport costs. It's especially galling to see stores like t his sell this kind of stuff in the summer when there are better tomatoes right here in NC. On the subway example given above, I would be surprised if any of the ingredients came from local sources.

[RiverwoodCLT]

We should get cars that use gas on other types of energy. We will be using oil for a long time in products that we use everyday. It is crazy to use up oil to drive a car when we have other means to power them. I would love to see the USA become energy independent. We should get oil where we can find it.

The problem off the NC coast is the weather and the rough ocean. This makes for a major problem in case of an accident. If it could be proved that drilling could be safe, I would support it.

[sax184]

One of the key problems with this discussion is that many people assume that the solution includes running all the cars at all costs, and that this idea is

1)possible

2)desirable

The post about the economic model is correct. Every barrel of oil is 400 years of buried sunshine, and oil has no peer in terms of energy density and the distillates into which it can be refined. As James Howard Kunstler would say, our living arrangements are going to need to change.

[Spatula]

Sounds nice. What to do in the intervening 10-15 years from when that decision to do so is made to when a noticeable difference is made?? It's nice to have pie in the sky thoughts and ideals. But how about some reality too? I don't think anyone here is going to enjoy $200/barrel oil in 2-3 years time even after US oil usage has gone down. People are going to be P'd off that even with smaller cars and driving less, prices are still going up due to skyrocketing demand increases in China and India and from the continued devaluation of the US dollar that our Congress is settled on pushing forward so they can serve their banking masters.

[DB78]

"Pie in the sky" is saying we need to upgrade things like cars. Guess what? I agree with that statement, and it's already happening. Diesel cars are coming back to the US over the next 2-3 years. We are going to see plenty of gas direct injection cars (big increase in MPG). The number of available hybrid models will be doubling in the next couple of years too. So far, no one can produce an electric car that people actually want to buy, is street legal, that can go 200 miles on a charge, while costing under $70,000. Oh, not able to do so without losing money for the company, that is. GM and Toyota lost money on the EV-1 and the electric Rav4.

There are billions upon billions upon billions of dollars being spent to improve everything revolving around efficiency for transportation. Whether it is battery research, lighter weight materials, designing smaller autos in the US with some style, algae based biodiesel, and many other areas of research.

Spatula, I must say I'm not surprised to see people here criticize the free market as you did in your previous post. Most of the sentiment of people at this site is that the govt is all wise and benevolent and a free market is evil, which of course is the exact opposite of reality. I'll leave the political ideology aside though, as that will get us off topic. (BTW, I'm not a GOP)

More importantly, whether drilling off the coast of NC, Florida, or other areas of the Atlantic that are untouched presently, the bigger picture is that we are going to have to increase domestic supply in the US sooner than later. I want an electric car very badly. At the least, my next car purchase (3-4 years) will be one of the newer hybrids out by that time that will likely get 60-70 MPG or so.

The most important detail is paying attention to world demand. It used to be the case that if the US cut back its demand, the price of oil dropped like a rock. Not so anymore. The US is now using less oil and the price of oil is still going up. Why? Emerging market countries. China, India, many Middle Eastern countries, most of SE Asia. While some of the tech I mentioned and your thoughts before, Spatula, are being worked on, in the meantime the US had better loosen its restrictions on new drilling and on new refineries or else it is going to be felt by everyone, particularly the lower and middle economic classes (you know, the ones politicians pretend to care so much about, while pandering to the ignorance of the masses).

Whether it is specifically off the coast of NC or another avenue of increasing domestic supply (numerous possibilities), increased domestic supply had better happen soon, as the technology necessary to make large differences in demand is still a few years away. The point is, do what is necessary to stave off the massive inflation that will be coming our way until improvements in efficiency are made.

I will say even with lots of areas being opened to new drilling, the price of oil isn't going to drop significantly. Realistically what it will do is simply buy us time to avoid an economic depression. I could explain everything I've written in much further detail, but I would actually like people to read what I've written instead of passing by an incredibly long post.

I desperately want widespread mass transportation, but even if there were incredible backing for it amongst the public, it will be a good 10 years before those transit lines are built and have made a noticeable difference across the nation. I would love mass transit here in the Triangle. Even if the decision the construction began today, it will be a good 5 years until is is all built, and a couple more years until the effects are felt.

Point? What happens in the intervening time. Gas is $3.98 national average right now. It could reach mid $4 range this summer. If a hurricane or political tension greatly increases, fugedaboudit!!!

Politically, we can demand to our politicians to stop allowing the devaluation of the US dollar. A strong dollar will bring oil prices down significantly. Anyhow.........

[ncwebguy]

Similar to how devloping nations use Voice over IP and cell phones instead of running copper wires to switchboards, techology advances can conserve resources AND provide a better product at the same time.

The "arguments" for drilling off the NC coast are "stop buying from forigners" and "demand is increasing from China and India." We been stockpiling oil in the strategic reserves for years. We should treat oil deposits in *ecologically sensitive* areas like the Artic National Wildlife Refuge and the Atlantic coast as "strategic reserves" as well.

Starting the drilling process today would lead to a lot of investment in equipment, which would lead to higher prices at the pump and/or government subsidies which lead to higher taxes on everyone but the oil companies. The oil companies are not saving for a magical day when they can get to new deposits, they are returning profits to shareholders. We would see short term revenue from the oil extracted, either from domestic sales or (more likely) oil sold to the highest bidder (pay back debts owed to China and other foreign investors). Once the oil has been extracted, then what? We're back to square one, but now with a coastline stripped of its tourisim industry.

If we instead spent the money "invested" in coastline oil drilling in various renewable energy technologies -- solar, wind, tidal, alge -- and rechargable battery technology to power personal transport vehicles. This would reduce not only our demand, but stem the rise in demand in emerging markets. This would create jobs and revenue through licencing our technology.

Under the current administration, we would likely give the techology away and then buy it back from them -- see 21st Century manufacturing (or while in the US, don't).

After the OPEC oil embargo, Regan and George Herbert Walker Bush devoted no money to exploring energy techologies, leaving it to the "private sector" to figure out. And they made no push to drill domestically? Why? That would flood the market with even cheaper oil and end dependance on OPEC, yet for some reason that didn't happen.

Meanwhile Clinton/Gore increased funding (slightly) for research and development, and Bush the current has cut any and all government R&D funding to pay for the worthy but unsuccessful hunt for Bin Laden and the Iraq quagmire. If you think Toyota's technology advances from the "failed" Rav4 has not put them years closer to a plug-in hybrid and full electric car than GM, then I can't help you.

Myric, Dole, and Burr are all too happy to maintain the status quo when it comes to energy policy -- expensive short term fixes to keep energy in the hands of the oil companies -- Iraq wars (plural) and now drilling everywhere -- and no long term strategy -- little to no funding for alternatives, no funding to reduce consumption (mass transit), and failing to provide leadership in environmental policy to the rest of the world.

[DB78]

There is so much research going on with private companies right now, it would make your head spin. I could sit you down for hours on end, showing you some really cool stuff going on. And it would still be just a fraction of the work going on in research right now.

I would like to see more solar power. But it has to be competing in price with fossil fuels. The company Nanosolar claims they have acheived that goal. Very cool stuff. The govt does nothing well. Sorry to the many govt employees here, but that's a statement with absolute truth. Having the govt divy out cash to companies like GE in the 90s would have done nothing to help us today. We'd still be in the same spot we're in, as the market incentives weren't there with cheap energy prices of the 90s.

None of the large automanufacturers will be the first ones to have a good electric car that is affordable too. That goal will be met by one of these companies: Tesla, Fisker, Phoenix, Zap. Or possibly Subaru even.

Like I said before, it is not just a matter of the NC coast. The bigger picture is to increase domestic supply with more domestic drilling. Whether that increased drilling is off the coast of NC, the coast of FL (oh wait, China is now doing that-- drilling 60 miles off the coast of Florida............nice!!!), drilling in North Dakota where there are huge oil estimates, drilling even in ANWR (though I don't think that's necessary).

As I write this, oil is just under $140/barrel. Not only does your transportation get more expensive, everything does as a result. Unless you are making likely $10K more in 2009 than you were in 2007, you will get pinched financially.

I want more clean energy. I would love to work for a 'green' startup company. But none of the alternative energy sources (solar, wind, tidal, geothermal, nuclear) are going to make a difference in the next 5 years. We will come to a full on economic depression sooner than later unless domestic supply is increased. Considering oil's price fluctuates so much according to emotion and worry, simply announcing that the US will have be producing 1-2 million more barrels a day in 5 years from now would make the price of oil drop A LOT.

Call me jaded, but I don't believe that many of the people who claim to care about protecting the environment actually do. I think for many such people, it's a front. The true aim is to stop development of any kind. The true aim by the politicians is the increased power over our lives that is possible with high energy prices.

This issue goes far beyond just NC's coast. It extends from Alaska to the Florida Coast and many place in between where more oil production is possible.

If we are to end up having a political argument here, pointing fingers, I can start pointing fingers at both Democrats and Republicans. Seeing as how I don't like either of those political parties, I have no problem opening that can of whoopa_ _.

NCwebguy. Drilling 30-50 miles from a coast (NC, FL, VA) won't do a thing to coastal tourism. You can't see out that far from the beach, even with binoculars. What will kill coastal tourism is having people not driving to the beach because they can't afford the gas to get there. No offense, but you have much to learn about economics and commodities. The comment about more oil production increasing oil prices displays that.

I'm not a fan of oil companies, but I don't hate them either. A little FYI to everyone-- US oil companies have access to ~5% of the world's oil presently.

The big picture is that allowing more domestic supply rather than choking it off like politicians having been doing for decades now is the only thing that will alleviate the coming economic depression. All other ideas and proposals are certainly worthwhile. Absolutely. Alternative energy? Love it. Smaller cars? Absolutely. Other numerous ways for conservation? Definitely. But none of those are going to alleviate the pain at the gas pump (and the grocery store,, etc) any time soon. Only announcements of allowing more domestic production will.

[sax184]

The big picture is that allowing more domestic supply rather than choking it off like politicians having been doing for decades now is the only thing that will alleviate the coming economic depression. All other ideas and proposals are certainly worthwhile. Absolutely. Alternative energy? Love it. Smaller cars? Absolutely. Other numerous ways for conservation? Definitely. But none of those are going to alleviate the pain at the gas pump (and the grocery store,, etc) any time soon. Only announcements of allowing more domestic production will.

[neon9]

Finally, the idea that an announcement of drilling is going to help oil prices is extremely optimistic. On wall street, for a day or two, it may help. But whatever happened yesterday affects the speculative portion of oil prices, and the next hurricane/refinery fire/civil unrest scenario will take gains back. Only when the oil starts actually flowing, years into the future, will the true change in price be seen, even if it is a small change.

[monsoon]

.....

Besides, look how well we used the time bought us by the oil found in Alaska and pumped in the 80's. .....

[neon9]

No that's not right. Oil was discovered long before this and significant supplies where coming from there in the 1960s & 1970s. My older cousin drove an oil truck from the North Slope to Anchorage in the early 1971. The pipeline was finished in 1977 years before the second oil crisis of the 1970s.

Oil prices shot through the roof in the 1970s for two reasons. In 1973 the Arabs were upset with the USA for helping Israel in the October war against Egypt and Syria. As a result OPEC was formed and they immediately placed an embargo on oil exports. It took several years for the economy of the USA to recover. The second time this happened was when Iraq went to war against Iran and disrupted oil again in 1979. ( and the Iran hostage affair did not help ) This caused a major disruption in oil supplies as Iran and Iraq both were OPEC nations and their oil almost disappeared for a while.

Oil prices fell in the 1980s, simply because the middle east stabilized and conservation efforts of the 1970s reduced demand temporarily. It's not clear to me the current price increases have anything to do with shortages though the media sure seems to be happy to beat on this drum.

It should be noted that gasoline is about $2.25/gallon on Mexico. Sue Myrick's plan won't make one iota's difference in the price of oil or gasoline.

[Spatula]

Call me jaded, but I don't believe that many of the people who claim to care about protecting the environment actually do. I think for many such people, it's a front. The true aim is to stop development of any kind. The true aim by the politicians is the increased power over our lives that is possible with high energy prices.

[DB78]

I wouldn't call you jaded, just a paranoid sociopath. Everyone wants the human race to advance. Most people want the freedom to come and go as they please, and choose their own path in life. Part of that requires having the opportunity to do so in the first place, but I don't want to start a long debate about that.

The point is: letting the government prop up the oil industry by drilling offshore and spoiling public resources is not a free-market solution anyway. I don't know why you're peddling it. The free market solution is to even the odds a bit between the current paradigm and the next one. Invest in nuclear power in the short term, solar power in the long term, urban city planning, and a better country-wide mass transit system to replace highways for personal and utility transportation.

Guess how much it costs to build a maglev from Las Vegas to Los Angeles? $2 billion. How much were the wars in Iraq and Afghanistan? A thousand times that? We can afford this stuff, easily.

[Spatula]

I would not make a comparison between government investment in necessary utilities and unnecessary wars. One of these at least has tangible benefits. Non-rival, non-excludable goods are going to be naturally more efficiently delivered by nationalized services than private industry.

The free market alternative to a working mass transit system is nothing at all. To a highway system: also nothing at all. Private entities do not have the resources to cooperate to acquire massive right-of-ways and to standardize their service for these types of utilities. The entrance fees for those markets are too huge.

Using the argument that because the free market has not delivered something yet, it is not worth delivering, thus seems fallacious.

A massive investment in public infrastructure is a daunting perspective, but we've done it before in the face of huge war deficits, and it still payed off. And frankly, it's the fastest way to fix our energy crisis. The economic benefits of being able to ride to New York from Charlotte in 2.5 hours would undoubtedly be... colossal. Goods and services moving faster and cheaper means a faster moving, wealthier economy.

[monsoon]

......

Moreover, the point I've been trying to make is that if the desire is to drive down oil prices, then we should increase domestic drilling in numerous areas in the US. ......

[DB78]

The free market alternative to a working mass transit system is nothing at all. To a highway system: also nothing at all. Private entities do not have the resources to cooperate to acquire massive right-of-ways and to standardize their service for these types of utilities. The entrance fees for those markets are too huge.

Using the argument that because the free market has not delivered something yet, it is not worth delivering, thus seems fallacious.

A massive investment in public infrastructure is a daunting perspective, but we've done it before in the face of huge war deficits, and it still payed off. And frankly, it's the fastest way to fix our energy crisis. The economic benefits of being able to ride to New York from Charlotte in 2.5 hours would undoubtedly be... colossal. Goods and services moving faster and cheaper means a faster moving, wealthier economy.