Presidential Energy Debate Fact Check #1: Is Offshore Drilling the Answer?
Posted by nate hagens on October 9, 2008 - 9:45am
Senators Obama and McCain are both aware that energy is central to Americas future. However, they differ on the details, and since confidence and authority can sway peoples beliefs, it is important, as always, to 'check the facts'. In last nights debate, Obama, while pointing out the US holds 3% of world oil reserves but uses 25% of world oil production said that we need to 'change the way we view energy in our lives' (to me implying that becoming energy independent is unlikely). In contrast, while McCain agreed on 'ridding ourselves of dependence on foreign oil', his discussion of the "Drill Here Drill Now" strategy implied that such a plan would achieve both lower prices and more energy independence. How much of the energy debate issues are 'politics' vs. facts?
Below the fold is a guest commentary by Professor Cutler Cleveland, providing a needed 'fact-check' on recent political claims being made on offshore drilling.
FACT CHECK
In the run-up to the election, this is the first in a short series of brief fact-checking exercises regarding the major energy issues in the campaign.
Senators McCain and Obama have expressed support for increased offshore oil drilling as part of their respective plans for energy. Senator McCain specifically suggests that opening offshore waters in the U.S. to oil exploration will (a) significantly increase domestic production, and (2) put downward pressure on oil prices.
Is this true? The short answer is no.
The federal government controls access to the Outer Continental Shelf (OCS), which refers to the submerged lands under the ocean farther than about 3.3 miles from the coast (about 10 miles from Texas and the Gulf coast of Florida). Land closer than that is under state jurisdiction; land beyond about 230 miles is in international water. Beginning in 1982, Congress passed and has subsequently renewed moratoria on the leasing of federal land off the coast of all states except Texas, Louisiana and parts of Alaska. All existing moratoria on leasing in the OCS will expire in 2012. Debate now centers on whether or not to renew the moratoria.
The Minerals Management Service (MMS) of the U.S. Department of Interior estimates that there are about 86 billion barrels of technically recoverable oil in the federal Outer Continental Shelf; the Lower 48 OCS accounts for about 59 billion barrels. By way of comparison, U.S proved reserves of oil are about 21 billion barrels.
The Energy Information Administration (EIA) of the U.S. Department of Energy used the MMS data to assess what impact a lifting of the ban in 2012 for the Lower 48 OCS would have on U.S. oil production. Basically, the EIA estimated what fraction of the technically recoverable oil would be economical to recover, and how fast it could be produced after 2012. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017. The EIA found that access to the Pacific, Atlantic, and eastern Gulf of Mexico regions would not have a significant impact on domestic crude oil production or prices before 2030. Total domestic production of crude oil from 2012 through 2030 is projected to be 1.6 percent higher than in EIA's "no access" reference case.
The effect of that quantity of oil on the price of oil would be indiscernible. Oil prices are determined on the international market, and the addition of about 0.16 million barrels per day from the OCS in 2030 to total world oil production would have no significant impact on oil market fundamentals. The world consumed about 86 million barrels per day in 2007, and will consume about 112 million barrels per day in 2030, according to EIA forecasts.
Adding the Alaska OCS to the mix would not appreciably alter this conclusion, as that oil would be even more costly and in terms of dollars and time compared to Lower 48 OCS resources.
Thus, lifting the ban on offshore drilling will not significantly increase domestic production, nor will it put downward pressure on oil prices.
There may be other arguments for offshore drilling, such as domestic job creation and tax revenue, improved balance of payments, among others. But those are subjects for another analysis….
Professor Cutler Cleveland
Boston University
10/08/2008Sources:
--Energy Information Administration, Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf, Annual Energy Review 2007.
--Minerals Management Service, Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation’s Outer Continental Shelf, 2006.
Some of Dr. Clevelands previous work posted on theoildrum:
On Energy Transitions Past and Future - Cutler Cleveland
Ten Fundamental Principles of Net Energy Analysis - Cutler Cleveland
Energy Return from Wind - Cutler Cleveland and Ida Kubiszewski
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
McCain can say whatever he wants...because even if he wins, he's a 1 term president. By 2012, they'll just be getting the off shore rigs to start the process of drilling. Sadly, there are many North Americans that are mis-informed about the energy industry (I am in the oil industry).
Obama has a much smarter idea and I hope he'll work with Boone Pickens. We need to find alternative energy sources for transportation, heating & electrical generation...and save our oil for the production of plastics & other such products that can be recycled. 100 years from now, they'll still have some oil production happening....
As for drilling ANWAR, it's just a bad idea to begin with. Drilling ANWAR would be more expensive than mining the Oil sands in Canada (where I live) and the perpetual high cost of oil required to drill ANWAR would simply push consumers to alternative choices.
Forgive me..but McCain has his head in his ass.
"Forgive me..but McCain has his head in his ass."
Now that's a tad harsh, don'tcha think? How about, "McCain, like many politicians, is in the pocket of Big Oil. And even if he weren't, it would not change the fact that most American voters are in total, willful denial about Peak Oil. Any attempt to explain the futility of offshore drilling (or limits to growth) will inevitably be met with mass hostility and defeat at the ballot box."
...now there's another take on P&A. The GOP had better get a BOP on this election because the US voter is beginning to suspect that something's not entirely right in Rightland.
Are you saying their platform is submersible?
I think he is suggesting the GOP may want to close the shear rams PDQ to keep the electoral overpressure from overwhelming the platform.
My thinking is that what the US needs today is a small blow out. Would do the electorate a world of good. As you watch your drill string sail off into the next county over you form a deep appreciation of how short and sweet life truly is, you relearn the true value of good neighbors and team members, you understand the folly of not paying close attention to what task you are performing.
Shut her in? Hell no! Get runnin boys. We gonna let her rip!!
But then I never was a good company man.
A FPSO adrift in shallow and dangerous water in search of its template. No telling what kind of pressure problems result from a poor cement job? This is like watching technicians from another country, which may or may not have your engineering standards, perform tricky operations on your semi in another language. It's a miracle more things don't go wrong. If we lurch into a "drill baby drill" mode, we'll be pulling tubes out of junkyards and recycling cement, let alone cementheads, by the time it's over. Why drill when you can buy Highpine for its 2008 cashflow?
"like many politicians, is in the pocket of Big Oil" not only politicians, here's from www.wecansolveit.org
"...
Did you notice the ads after last night's presidential debate?
ABC had Chevron. CBS had Exxon. CNN had the coal lobby. But you know what happened last week? ABC refused to run our Repower America ad -- the ad that takes on this same oil and coal lobby.
..."
They're trying to get 100,000 public comments to ABC before 20/20's next airing. If you want to help them go to
http://www.wecansolveit.org/ABC
TonyW,
Thanks for the link. I'm there.
I usually flip between CNN and CNBC with morning coffee before I go to work. Over the last several weeks I've sent several negative emails to CNN about their heavy placement of energy adds in the morning. It is stunning...oil to coal to NG and back for more. And of course they are all explicitly so very concerned about the environment. I always get their polite auto reply thanking me for the feedback with assurance that tehy read 'em all. If it was a concern before, it has become blatantly obvious that objectivity is long gone from the MSM with regard to energy issues...and, by inference, all other issues.
Shouldn't that be: Wecantsolveit.org ?
Alternatives: Ignoranceisbliss.org, We'reindenial.org, We'retoostupid.org, Welikerealitytv.org
Harm:
The political types do need to let society know about Peak Oil..but do it in a way that's not seen as shrill or too far to the Green side.
Boone Pickens has did an excellent job selling his wind generation plan to the public by NOT selling it as a "Green" plan. Boone doesn't sell the "fear". He doesn't talk about GHG. He doesn't talk about Peak Oil & it's ramifications on the economy. Pickens sells his "Green" plan as a path to American Energy independence. Yet, his wind power plan isn't really different than what Greenpeace or the Sierra club has been talking about. It's all in his execution.
McCain and Obama could come forth with a plan along these lines, selling it as "energy independence". A politician that could sell this idea could probably ask Americans to pay a little more to take the country down the path to energy independence. You can't do that by saying "drill drill drill".
Could be McCain be taking a hit for the party? I look at how poorly he and Palin do and wonder is this intentional to get a Democrat in office when it really gets bad in the hopes of them taking the fall for "hovervilles". Bush has been soo bad and the next 4 years will not be pretty so...??
Why, why would you want the job or perhaps it is better that someone else gets it. This of course implies some Putin like thinking which is a lot of stretch for the republican party. I wish Palin was in just for the comedy of it all. To bad we are so screwed.
It's a new century. Hoovervilles are now Shruburbs.
Speaking of proctological data mining! On which
board of directors of big oil are you advising? The only way to find out if drilling in ANWAR is economical or not is to allow exploration and put up blocks of land for lease. It would also help if you streamlined the permitting and pipelines necessary as was done for previous North shore development. Not developing the North Shore is simply foolish. Doesn't it strike you as odd that the US is the only country in the world that refuses to develop all its petroleum resources?
A far as Pickens is concerned I suggest you look up the definition of "rent seeking." Do you think Boone would continue without subsidies?
How about letting the market decide which way to go? Last time I looked it was the wisdom of congress to demand affordable housing, decline additional oversight of Fannie & Freddie, and insisted that they were doing just fine. I'll put my faith in the market before I'll leave those decisions to the expertise of "someone in the oil industry" or congress.
By the way, the market would and can sort out whether the best use of petroleum would be for plastics or whatever and if you want to "save" ANWAR for the future you need to do a couple of things first.
Allow exploratory drilling, permitting, and pipelines. As of now none of those thing are legal. Saving ANWAR for the future presupposes that it can be leased, shot, and allow exploratory wells and the means to transport the oil.
One final question if ANWAR is more expensive Canada's tar sands why is it worth saving?
The correct acronym is ANWR, which stands for "Arctic National Wildlife Refuge". Is there some alternate acronym that I am not aware of, or this this indicative of your level of knowledge in this area?
I agree with you that exploratory drilling is a logical step, although I feel that it will likely be disappointing.
However...
So, Congress screwed up by allowing lending houses to run their businesses with little regulation, and yet you're advocating allocating petroleum reserves by way of little regulation?
The idea of allowing the market to decide what the best uses are for petroleum reserves only works if the true costs and benefits are accurately measured. The term negative externality comes to mind. Though I will not attribute this line of thinking to you, the fact that we have presidential candidates suggesting that we can achieve energy independence by drilling more on domestic lands, tells me that our policy makers are not accurately weighing the true costs and benefits.
And I am not sure about the specific costs of producing oil in ANWR vs tar sands from Canada, but in general, the price of oil is likely to rise, and thus in the future, there will be a time either when it will be worth it to drill in expensive places (assuming we have the capability to; find Gail the Actuary's write up on off shore drilling), or alternatives will be cheaper. However, there is a whole heck of a lot of underlying assumptions going into the phrase "or alternatives will be cheaper".
As a matter of fact I do know what ANWR stands for and my inability to master spellings (Spelling in general.) of acronyms often invites the cute ad hominen remark such as yours.
You make my point with the remark, "I agree with you that exploratory drilling is a logical step, although I feel that it will likely be disappointing."
It is more than logical, it is necessary if you want to "save" the oil in ANWR for the future for whatever reason. As far as whether or not it will be disappointing I could care less. Let big oil spend their money and find out.
I should have never used government's involvement in housing as an example. It is very complex and convoluted to say the least. My point is the government often acts as an obstacle to the development of energy development and resources rather than an aide. I believe it is rather obvious that government has been an obstacle to offshore drilling and development of ANWR, don't you?
"The idea of allowing the market to decide what the best uses are for petroleum reserves only works if the true costs and benefits are accurately measured."
Markets do this daily and have been doing so for quite some time. One only has to compare the success of market economies vs the economies of the Soviet Union, Mao's China, Cuba, to name a few. In general letting governments decide what is essential and how much of it we need is disastrous. Examples abound in the heyday of the Soviet Union and today's Cuba.
The other problem is the choice of the word "true costs and benefits." Something tells me reasonable men can disagree mightily what those might be, right?
Personally, I pay no attention to what the presidential candidates say about these matters as they tend to say whatever they believe they have to say, not say, evade, or just flat out lie to get elected.
"I agree with you that exploratory drilling is a logical step..."
who is going to pay for this exploratory drilling ? i seriously doubt xom is interested in drilling anything to save for future generations(spoken as an xom stockholder).
Why don't we wait for the oil companies to explore all the land they have already leased before opening up ANWR and OCS? These unexplored areas are thousands of times larger than ANWR and yet the lobbyists and pundits keep screaming that we are not allowing oil companies to provide us with the oil we claim we need. The ANWR debate is not about oil. It is about eliminating all environmental protections we have enacted over the last 40 years.
"Markets do this daily and have been doing so for quite some time."
Apparently you're not aware of how the "Markets" are behaving lately.
Drilling anywhere in the far north has it's own challenges. Add in the off shore factor & you're really looking at oil prices over 100 bucks a bucket to make any money. Does it make any sense to spend billions on infrastructure to pull out a few billion barrels of oil? There are huge debates over "proven" reserves in the far north...and a whole lot of dry holes have been drilled up there.
Drilling ANWR will cost billions. In the overall scheme of things, it will do little to nothing to alleviate American's energy crisis. If you want to chase pipe dreams, then spend your money on the Bakken formation. There is crude there, it's just hard to get to..but horizontal drilling in Bakken is going to be cheaper than drilling of the coast of Alaska
As for Pickens..Boone's a vet of the business. He built Mesa Petroleum..and yes, some of his points of view are because he's in nat gas. But so what? He's the ONLY person out there that's presented a reasonable plan to wean America off foreign oil. You've got 25 billion barrels in reserve right now, maybe another 50 if you take all the OCS reserves into consideration. Assuming you can drill & reach all of that.
If you want my opinion....if America is so paranoid about it's energy future, rather than spend billions drilling ANWR, it should spend billions on Oil sands extraction. Athabasca has nearly 2 TRILLION barrels of bitumen/heavy oil up there. We can get to 180 billion. If you can find ways to reach the rest of it, American can continue to be an energy pig long after we're all dead.
McCain..still has his head in his ass.
The arctic areas under consideration for drilling are in some of the most ecologically sensitive areas in the world. The low temperatures nearly guarantee that any mistakes, spills for example, would take eons for nature to correct. This is so because the microorganisms that would do the correction work do so in slow motion because of low environmental temperatures. Yes, even the simplest forms of life are regulated by the chemical-thermodynamic relationship of reaction rates vs temperature.
And yes the arctic regions are important breeding regions for much sea life. These reasons alone are sufficient to put off attempted exploitation of this area. Especially when even the EIA (who is well known for pie in the sky optimism) projects little impact on overall contribution to overall oil independence and lower fuel prices.
As a minimum, leave these areas alone now. Let future generations make the decisions regarding development of these regions. Future generations are more likely to understand the trade offs regarding development of these fragile regions. The present generation seems to be interested only in the immediate impact on their wasteful life style. It only cares about paying a few pennies less for fuel so they can keep their gas-guzzling, environmentally destructive vehicles in operation for a few more years.
Let's look at the brighter side of doom. We are not making much progress on stopping global warming. During the next few centuries ANWR will be warming rapidly and will 'recover' to an entirely new 'stable' ecological system. The warmer environment will speed this 'recovery'.
"...Not developing the North Shore is simply foolish...."
Er -- no Puhkawn. Actually, it's a piece of long-term, far-seeing, global wisdom for which sombunall (Robert Anton Wilson's affable category) of USAmericans are not currently ready, because of the infantilising and extreme, delusional confusion that they suffer after decades of being propagandised by the hyper-rich gangsters-in-charge (gic) ruling 'elites' and their faithful stenographer-serfs in the commercial corporate media and commercialised, fanatically-indoctrinated academe.
The best thing to do with as much as possible of the sequestered fossil hydrocarbons still deep underground is to leave them there, and develop a different, ecologically-benign energy infrastructure, which includes a lot of conservation and voluntary demand reduction. As TODers know, we are beginning the involuntary kind right now, and for the foreseeable future.
However, promoting the ideas of 'leave it underground' and 'less is better' may not be such a loser with the ordinary US common citizens, once you take on, defeat, and depose from power your gics. No small task, I admit, but necessary if the US is going to survive at all in anything resembling its current form.
I follow your great and famous USAmerican Noam Chomsky a good deal. And one of the multitude of inisights that I've picked up from Noam is that the US commons are consistently well to the left of the 'elites' -- the gics and their steno-serfs -- in persistently-held opinions, if you find out what they really think, rather than what the media-serfs SAY they think, by the simple expedient of nerding steadily through the opinion-poll findings. Noam can stand to do that, and his discoveries are striking.
Given that small aforementioned precondition -- revolution in the US -- you shouldn't have too much difficulty aligning a lot of the citizens with these supposedly unsellable ideas: conservation; renewable, benign energy; a lot less energy; comprehensive defence of the absolutely vital, all-life-sustaining wilderness; and on.
You folks need that revolution. According to Naomi Wolf, the last stages of the ongoing fascistic coup-d'etat in the US, which began around the turn of this century, were set going at the beginning of this month. The choice now seems to be between what Naomi and friends are calling for: awakened common citizens rising up (as in the War of Independence against our English gics of that time), arresting these current US gic criminals who are destroying your republic and its constitution -- which has indeed been one of the great hopes of the world -- or just watching passively on TV as the coup is completed. Not exactly what your ancestors of two centuries back would have done, is it?
Without that precondition, USAmerica is going down. Further, harder, and for longer than the SU went down at the end of the 1980s.
I have a sister-in-law living in New England, and my partner and I are doing everything we can to get her out of the US, and back to her mum's house in Eire, or even just here to Britain, before the S which in now HTF in USAmerica actually buries it completely. You folks really need that revolution. And you absolutely don't need anything as utterly futile and destructive as more -- useless -- drilling, anywhere.
Rhisiart Gwilym; Wow, great rant. Agree with all of it. Just one little correction. The revolution won't be televised. Seems the revolutionaries are broke and the corporate sponsors wouldnt chip in. Even if there was funds to run commercials to pay the networks to air the revolution, the networks have censors, something about "Only corporate shock & awe violence" is allowed to air in prime time!
I know because I wanted to hawk cheap plastic worthless crap in an info-mercial. I paid for the singers, writters, cheezy jingle, the props, the 1-800 number, and the whole she-bang. Now I'am broke waiting under a bridge for the citizen militia to come over the hill and save the day.
PS; I love Chomsky and Naomi, also Amy Goodman, Tariq Ali, and a slew of others.
You are correct The Revolution Will Not Be Televised
I suppose you also believe that 'the total footprint for drilling in ANWR would be the equivalent of a postage stamp on a football field'?
As for drilling ANWAR, it's just a bad idea to begin with. Drilling ANWAR would be more expensive than mining the Oil sands in Canada (where I live) and the perpetual high cost of oil required to drill ANWAR would simply push consumers to alternative choices.
If drilling in ANWAR is a bad idea then what exacting is the mining of tar sands to produce oil?! Would it be wrong to say they are using perfectly good natural gas to get an almost oil like product? Would it be wrong to say to say they are creating an environmentally toxic lake whose cost to clean up has yet to be determined? Is that cost even part of anyone's EROI calculations? Will that mess be cleaned up using Canadian taxpayer money? Will any of them be miffed when they realize that all that pollution stays in place while most of the oil went south of the border while they begin to shiver through winters without natural gas?
You should see the new TV ad for Senator Saxby Chambliss from Georgia.
He said, "There is more oil in the US than in Saudi Arabia!"
What planet is he on? Last time I checked, we did not have near the oil of Saudi,
however, Saxby is probably counting on the shale......
He needs to check on the cost of recovery for shale and compare to crude.
By the time we drill the OCS or ANWR, the World will be in terminal decline anyway.
What little new oil we do get here in the US will go to the elite,
and the Investment bankers will package it in crazy derivatives of some sort.
Offshore and ANWR won't do very much for us. At best they might provide a very small amount of transitional help.
The thing is, though, that there is a limited window of opportunity to go after these resources, and then they will be out of reach for all practical purposes.
It is my understanding that you can't just let the Alaska pipeline sit there empty for years, and then start it up again when we finally decide that we are ready to get whatever is available in ANWR. We've got to use that capacity or lose it, and when it is gone, it will be hugely expensive to rebuild it -- probably too expensive. We're better off getting what we can out of ANWR while we can.
Similar types of considerations apply to offshore drilling. Right now, we've got the equipment, know-how, and infrastructure for it. Wait until that is all shut down, and bringing it up again to go after what is left will be almost impossible.
I am under no illusion that drilling will do very much for us. But I do thend to favor getting what we can while the getting is halfway good.
Come on WNC,
Do you really think we'd use it to stockpile medical tubing or horde fuel for emergency responders? We're talking about an extension of the SUV era. I wish it weren't so but realistically any increase in domestic production will be used to support a deadend lifestyle.
Rip the bandaid.
Use less oil.
aaron
You're right about the SUVs. But... I have horses. They will haul logs for me. I cuddle them, I comb them, and we talk about life. They do not cut down trees, or make the branches into firewood. The gas powered chainsaw does that. They will not saw the logs into boards for me. The gasoline powered sawmill does that. They will haul a wagon load of dirt. The diesel powered tractor will load the wagon. Or just do the whole job. I need sawed lumber to build my farm. I own the trees. There's one water powered sawmill left in New Hampshire... Or, I own a sawmill that will cut 1000 sq ft (board feet is not relevant) for a gallon of gas. No horses, no waterpower, on my land.
I have to buy hay. It's much cheaper in 660 lb (300 kg) round bales. The horses can pull this on a sled or wagon. The tractor can put it on the wagon, or deliver it itself.
At ten bucks a gallon, I'll drive my horses into town. They'll carry two cords of firewood to buy the petroleum for the chainsaw, the tractor and the sawmill.
The tractor, the chainsaw and the sawmill. Drill, baby, drill.
I am curious as to the make and model of your saw mill. I ask because I have worked in an antique saw mill many years ago, for several years. It was a Frick ott #2 as I recall. Counting backwards in 1/4 increments is a sawyers bane. Belt driven from the PTO of a diesel engine, 56 inch saw blade, forget how many teeth. Heres some pics of the actual saw mill.
http://i11.photobucket.com/albums/a169/libsys/Album3_June2007/EdsSawmill...
http://i11.photobucket.com/albums/a169/libsys/Album3_June2007/EdsSawmill...
Heres a bunch of pics of it, towards the bottom of the list
http://images.google.com/imgres?imgurl=http://i11.photobucket.com/albums...
It's a five year old SMG bandmill. If it wasn't so much fun I'd likely haul the logs 10 miles up the road to a "real" mill and trade for the cutting.
You just confirmed, in hands-on terms, how oil and gas blows everything else away as far as portable energy is concerned. Companionship is another matter. Replacing it in volume is almost impossible to conceive.
It is such a great power source that using it irresponsibly is, well, irresponsible. The generational time frame for this emergency: The Grandchildren of the Boomers.
Grandad, tell us how you used to drive your truck ten miles for a six pack...tell us again how you guys used up all the oil. We love to hear that story. It explains lots of things.
Use less, baby, use less.
Oh, I agree, we do need to get very serious about energy efficiency and ramping up renewables immediately. That is the main event as far as I am concerned.
Unfortunately, it all takes a lot of time and a lot of money. In the meantime, we've got an economy - an entire civilization - built around the use of massive amounts of oil. You can't change that overnight, much as we all would like to. We've got to be thinking of transitional strategies.
To the extent that we can extract and use as much of our own domestic supplies as possible, we can avoid importing quite so much oil; the money saved could then be dedicated to energy efficiency and renewable energy projects.
There are two big flies in the ointment, of course: 1) there is no guarantee that the additional domestic supplies will substitute for imports, they might just increase total consumption (which leaves us worse off); and 2) there is no guarantee that the money saved will actually be invested in energy efficiency and renewables (in the current environment, probably not). However, to be fair these problems are not unique just to this issue. Will investments in energy efficiency really reduce our oil consumption, or just leave more to be used in other ways? Will investments in renewables really substitute for oil, or just add to total energy produced and consumed? This is a bigger issue that must be addressed.
That is what will happen. Every oil that is extracted can only get consumed or go to some reserve. Since there isn't a lot of reservatories, it will get consumed.
But that is not a problem, extra oil will generate extra wealth, that can be invested on renewables.
That is what you have to ensure, and where you have to focus your political power. Really, you shouldn't be concerned about #1 at all.
Obama makes an occasional nod in the direction of reality, which puts him ahead of his opponent. But he too fosters the illusion that with investment in alternatives we can eventually somehow resume partying. www.chrismartenson.com now has a good chapter in his Crash Course refuting that one.
Some of the renewables will play a role in the future, but cannot allow us to continue anyway near the way we have been going. The whole idea that we can grow our way out of the present crisis is grossly misleading. In the 30s, yes. There was still a resource future to mortgage. Not this time. Retrench or die.
The biggest problem with offshore drilling is that it sustains the illusion of doing something, and diverts resources from what ought and must be done. There is SO MUCH waste in our way of life that very modest investments could save far more energy than any amount of drilling anywhere (these days), and could save it soon, not 10 or 15 years from now.
Well said Dave.
Whether either candidate agrees with what you say is unknown. What is known is whichever one verbalized it would lose to the one who didn't. One can hope that once elected, real actions will diverge from campaign speak. In the end we need a new political party. But the public needs facts to match with leaders words - right now the media and 'culture' suggest that energy, water, (and credit), are infinite. That perception is about to change.
Dave and Nate have pretty much cornered it. I suspect Obama has at least some telling him that BAU won't be sustainable. The truth is that not only must our energy path be technically feasable it must also be politically feasable. That is why I advance the plan as:
stage 1 Conservation & renewables ostensibly to save BAU.
stage 2 stage 1, but a transition to BAU-lite (i.e. smaller cars, car pools, some increase in housing density/shorter commutes) etc.
stage 3 BAU -extra-lite.
How quickly we need to move down this path is not yet determined. At this point, taking the first step should be the highest priority. Once we have commited to step 1, we can evaluate the energy future, and go to stage 2 as needed. Trying to market stage-3 at this time will simply generate resistance to taking the first step. I am not convinced, that stage-3 (or a hypothetical stage-4) will be needed, but how far down the energy descent curve we need to go depends upon the adavance (or lack thereof) of alternative energy.
The discussion here on TOD seems very US-centered and very much focused on public plans. I think it is too late for you yanks for that kind of action. When US gasoline prices reached a measly $4/gallon even democrats started insane talk about "gas tax holidays" and such. Europe has had twice your gas prices and more for a long time now, which has made our society less wasteful in many ways. So what are you gonna do?
It is easy to see that meaningful gas taxes aren't your thing, but gas will become pricey (for real) at PO anyway. As you can't get together for meaningful political action - you just throw away some meaningless pork for low EROI ethanol and such - why don't you just relax, cut red tape and let the markets be free and undistorted to be able to better adapt to the coming oil crunch? That is what you do best.
The ANWR drilling and off-shore drilling debates are meaningless. Just allow it and let the market forces sort the details out. If you try to be more like socialist Europe, you will neither get the meaningful results we have, neither get the freer market advantages you have now. You'll have the worst of two worlds.
If you can enact a broad based carbon tax - do it! Other than that, try to minimize political intervention. Just an outside observer's advice...
Kettle black?
Because markets disproportionately value the present and do not account for environmental externalities nor put a price on the global commons.
markets are made up of people and right now people value what's available now versus the future. No change in market outlook (or even government outlook) can change until people believe in a long term view vs. short term benefit.
Forcing a large population to act against its beliefs will only cause misery, so change starts from the bottom up, changing your friends and family's beliefs. Only when a majority of America understands and believes in long term sustainability will the market and government act to accomplish it. Otherwise, you're trying to stop the morning tide.
Yes, Nate, I agree that it is possible in theory to do meaningful internalization of costs. But is it possible in practice in the US? Or will the calls for political action just be met with a disparate, uncoordinated and wasteful array of pork and regulations that will hurt much more than they will help?
About the short-sightedness of markets: I think this is greatly exaggerated by most, especially in comparison with politicians. Big market players act rationally in accordance to expected risks, interest rates and growth and routinely makes plans for the duration of their investments and assets, often thinking decades ahead. Politicians otoh think about the next election and oil scheiks about preserving their power, which makes them want to pump oil today, not tomorrow.
jeppen,
So where have these rational "Big Market Players" been for the last year or so? F***ing Mars?
Please elaborate. Investments are made all the time.
I'm no economist but I participate in the economy. The first thing that came to my mind was the irrational runup of oil prices over the last year. From what I can see the big players (non-commercial and commercial alike) were primarily demonstrating an exuberant chasing of rising futures, riding the wave. I'm thinking (perhaps incorrectly) that only large investors can play in the NYMEX and ICE leaving the little guys with equities, options and ETF's. Then they repeated on the way down. I don't see these folks measuring trends 20 years hence. The second thing (that kind of has me and everyone else a little irritated) is the big players in the financial markets don't seem to have been at all rational as they leveraged upon leverage based upon unknown quantities of mortgage-filled buckets.
I read something yesterday that struck me as highly rational. If you buy #2 feed corn futures you know that when you take delivery you'll get a known quantity of #2 feed corn. With mortgage backed securities lately, you've been getting a quantity of "mixed vegetables" of unknown proportions. If the big players knew this and bet on them, borrowed on them and insured them and swapped them then they were either irrational or summering on Mars...allowing the chimps in the trading rooms to insure the computer programs were functioning properly.
I'm sure there are lots of brilliant big players out there but recently they look pretty stupid and not at all rational.
Well, even though you don't know exactly what you'll get when you do exploratory drilling, I it is a well known type of investment that is rationally handled with a long-term outlook. I think big oil has handled investments rationally for many decades and are able to continue doing it, don't you?
Some of the new financial instruments back-fired, obviously, yes. If your conclusion is that big market players are stupid, do you have a better, smarter alternative? Obviously, the lawmakers helped, approved and even forced a subprime expansion, and we all know the Soviet bloc's performance.
I can only judge by experience but yes, I guess big oil has done well (no pun intended). For the moment I can still buy gas whenever I want to. I am not so confident that they've appropriately planned for the delivery of the resource over the long term.
I'm very sure that the big financial players didn't intend for the financial system to fail. I am also angry because their actions have affected me quite negatively. I wonder if in their intelligent risk/reward analyses someone didn't bring up the possibility of collapse. Like, "Dude, we could make a lot of money on this paper but if condition X occurs at the same time as Y then we could wind up with a financial collapse." Thinking about it, I cannot imagine that it did not come up. I imagine more than once, many times in many boardrooms reward was chosen in spite of risk. Now we all pay.
Smarter alternative? I suppose that in a free market system there needs to be a collapse from time to time to rebalance the value of the various assets; clean house so to speak. It is not a trait that we like to think about nor does it get much air time. Perhaps new paper insruments should have to pass the #2 corn test or WTI test. But those in the above boardrooms knew that the assets du jour could not. Should we not then guard the foxes?
Don't be so certain that Obama or his advisors will deviate from BAU unless forced. They are mostly University of Chicago school of business folks. You know like dead Uncle Milton. I think a lot of folks will be dissappointed if he's elected. I am voting for an independant candidate just to vent my displeasure with a Two/one party system.
Though a small sample size (n=1), I am a University of Chicago school of business 'folk' (MBA with Honors 1992).
I deviated. Unforced.
OMG! That means you've been consorting with terrorists! Here I am on TOD with you! Now I'm tainted with terrorism too! OMG! OMG! OMG!
*I've been spending waaay too much time on Topix.net*
You're an...how you say, an anomaly.
For what it is worth, my mayor elect (Portland OR) talks about peak oil openly, and is hugely popular, (not because of Peak Oil, per say, but just in general.) But this is Portland, and not rural Texas, and I suspect that talking about Peak Oil in rural Texas would not go over as well...
Yes, but Portland is also officially in favor of massive highway expansion projects - in particular the Columbia River Crossing, a $4.2 billion widening of I-5 to 12 lanes (plus a light rail extension across the river). The Draft Environmental Impact Statement for the CRC says that Peak Oil is real and oil prices could reach $100 / barrel by the design year of 2030 ... I'm unaware of a single city or county or state that has canceled road expansion projects due to Peak Oil, Peak Traffic, Climate Change, etc.
http://www.road-scholar.org/columbia-river-crossing.html
has details
Rhetoric about Peak Oil from politicians who push more highway expansion is just Sustain-A-Bullshit.
If we assume Inflation at 3-5% / year till 2030 and Oil now =$100 then we get a range in 2030 of between (roughly) $200-$300 / barrel...
Do they expect the barrels to be 1/3 as big?
Nick.
The locals are for road building because that is where the local economy can get significant funding from the Feds. If the Feds changed the path which money flows to the local level then the locals would change what they are in favor of.
Yes, and it is a really dumb idea, which I've testified against many times. (And for what is worth, the city council thinks the $100 price estimate is laughable too, and have sent the EIS back to get real traffic forecasts with real oil prices, and a carbon tax too.)
But my point is, at least they admit that peak oil exists.
Nor in suburban Texas, where I live. It is not spoken of, ever. Does not exist. Cannot be discerned in media of any kind. Cultural values--they vary with geography.
Instead of leadership, we get pandership.
This is not promising, it means circumstances will determine outcomes.
The point will be reached when Cantarell declines to the point when Mexico cannot or will not export. That's when the panic will begin ...
This is going to be a janitorial job for Obama if he gets into the office. Just cleaning out the trash is going to be a overwhelming job, finding the 24 year olds from Bob Jones who have been put into ideological positions of power, and trying to bring back career people who have left, the one's who actually make the system function.
The devastation from BushCo is probably much more sever that anticipated.
Why in the world these people are so eager to take over a ruined nation is quite beyond me. Do they like having blame heaped upon them?
Chris Martenson is my new hero. How can we get his presentations into mainstream; at least onto Obama's laptop? (from an Aussie perspective; it's John Howard [McCain] vs Kevin Rudd [Obama], kinda-sorta, right? Is it too early to call it a shoe-in?. McCain, "my friends" :), will be having a quiet Christmas).
Regards, Matt B
PS. I play tennis with one of the engineers working on an Aussie-frigate contract (they're 25 engineers under-staffed, BTW). He suggested governments only guarantee "defence" contracts these days... Is that true?
I was fortunate to see Chris Martensen and JHK in a panel discussion in Boston a few months ago. I wish it could have gone on for much longer, they both had a lot to say. Chris's explanation of exponentials and the graphs of the various hockey sticks (population, water, energy, etc) made a dramatic display of the kind of trouble we're in. I heard recently there is limited access to the presentations now, too bad, because they are truly excellent.
Not to be overshadowed, Kunstler was awesome too.
Not knowing the guy from a bar of soap - and me being skeptical with just about everything these days - I truly hope his "final chapter" isn't about trying to flog a book or something. I don't believe it will be, but I'll be disappointed if he does.
Regards, Matt B
Yeah, but look what happened with Obama's suggestion that we inflate our tires and tune our engines.
I'm getting that doomy feelin' again...
I don't think McCain has a clue about anything really.
He just days ago said "The fundamentals of our economy are strong" He did not know even how many houses he owns. I could eat bandwidth with all he does not know.
Obama is not just slightly better, he is better by a bunch. But lets be realistic about PO. Many in the PO community, those who devote enormous amounts of time, study, resources, disagree on strategy or outcomes to potential alternative energy initiatives.
You can't expect a savior to rise from the political landscape. Its never happened before and isn't likely to happen anytime soon.
I believe, nay, am certain that the real power behind the thrones, know PO and are making their moves with pawns, bishops, knights, rooks, and the perfect smoke screen is economic smoke. Lets face it, they figured it was gonna be an economic turmoil to begin with. Just like a battlefield commander knows that battles create smoke and uses smoke to conceal his troops movements, smoke he added to smoke that was gonna be there anyway.
The canidates are not the power, they are pawns, rooks, knights, bishops just like you and me, expendable material. Corporations run this popsicle stand. Call me a conspiracy kook if you wish. IT won't change the outcome of this game or rattle the players.
McSame's comment about drilling to lower prices was completely idiotic. I'm afraid, however, that's what a lot of americans want to believe, so they'll vote for him.
Obama is being more sensible, however, I don't like his statement that we have to make sure that nuclear power is safe before building new plants (paraphrasing). Uh, might want to take a look at the track record over the last 30 years, and the fact that nuclear still generates 20% of the country's power despite 30 years of growth without a single new plant built.
Would he choose "clean coal" over nuclear???
I think Obama’s position is that in order to take advantage of nuclear power it is essential to have an effective plan to deal with the waste. I’m personally not happy with the status quo - storing waste in pools and casks on site even though we haven’t had an accident lately. Yucca Mt. isn’t open yet, though I understand its moving forward. Not to mention "legacy" sites (nice benign moniker for nuclear waste dump). Bottom line it seems to me that Obama understands that today we’re winging it with nuclear waste.
If I read you right you imply that "clean coal", CCS etc, isn’t close to ready for prime time while nuclear is. I’m sure he knows that. I hope he knows there's a front end "clean coal" issue, too.
http://ilovemountains.org/
http://www.kftc.org/
I would like to see Obama whip out a chart showing the Dispersive Discovery model and describe the estimated amount of undiscovered oil left. But that will not happen anytime soon.
Politics, Obama-style, is all about creating a grassroots effort to get people excited about a progressive agenda. I would really like to create an equivalent effort where we can collectively modify the Wikipedia entry on the Hubbert curve and replace the reference to the Logistic derivation with the Dispersive Discovery model. This is a nice derivation that reduces to the Logistic in the most general case. I do need help in this because the way that Wikipedia works is not kind to a single individual with "wild" ideas. If anyone wants to back me up on this, perhaps we can get something going.
If the Export Land Model has an entry, and the Chewbacca Defense has an entry, would this make some sense? If anybody knows the history of getting the ELM on Wikipedia, it might help me out to get started. From the looks of it, it started quite organically by some names I don't recognize.
I hear two tiresome positions:
1) OCS drilling is the answer. So do it.
2) OCS drilling is not the answer. So do not do it.
How about a third position that isn't at either extreme?
3) OCS drilling will help make the decline in production less sharp. It will also reduce the import cost of oil. Since we'll be in deep trouble when the world production decline gets underway that financial help will make a substantial difference.
The current financial crisis is a small preview of the 2010s financial crisis. I want every advantage we can get for that period.
I am in favor of drilling and procuring all the different energy supplies we can, as long as we readdress the end goals first. But if you are concerned about 2010's financial crisis, drilling now will actually make 2010 WORSE, as you won't see any oil until years after that, yet you will require oil, (and electricity and natural gas) in order to design, construct and implement all the new infrastructure off the coasts. How much is an open question but I know it's > than the 'not drilling' case.
FP,
Well said. But you also left out the potential billions of profit for US oil companies. And that the majority owners of these companies are the every day citizens who have their retirement and persion accounts tied up in these companies. It's easy to despise the profits of ExxonMobil as long as you ignore the benfits to school teachers, firemen, union workers , etc.
But I'm also sure you'll have no more luck generating thoughtful conversations on this matter then I have in the past.
Obama did not say we can not become energy independent. He said we "can't drill our way out" of the problem. I took this to imply alternative supplies. Admittedly he did then talk more about conservation than anything else.
I was extremely surprised that in the presidential debate,except for a comment in passing by the candidates, neither of them gave a clear implementable plan for reducing dependance on oil by alternative fuels such as Bio-fuels, hydrogen cells, hybrids etc.
Even in the field of Power generation I would have expected the candidates to spell out the kind of budgets they propose for solar, wind and nuclear power.
I regret to conclude that the American public does not have the best of choices in either of the candidates!
Well, you can always go to their websites:
http://my.barackobama.com/page/content/newenergy
http://www.johnmccain.com//Informing/Issues/17671aa4-2fe8-4008-859f-0ef1...
Sorry, but why in the world would you think something like this? The American public has made it abundantly clear that they prefer bogus political rhetoric to factual discussion about solutions. You must be from some other country...the US is in denial, and will remain so for quite some time.
For what its worth,
A US oil shale program could produce up to 2.5 million barrels per day with reserves of 400 billion barrels. The mining operation would require about 3000 cubic feet per minute (the Green River) and mining about 125000 tons of oil shale per hour. The Syncrude mines today produces 25000 tons per hour.
Colorado will never be threatened with hurricanes.
http://grahamchandler.ca/USEyesOilShaleAsModelforDeveloping%20Shale.pdf
The Chinese Fushun mine produced 70-80% of China's oil demand in the 1950s(when China had 600 million people) at ~900000 tons of shale oil per year-18000 bpd (evidence that a country can run on oil shale for liquid fuels, although the deposit is obviously not adequate to fuel China today at 3.8 mbpd). Today the Chinese are again ramping up shale oil production to 700000 tons per year.
http://www.sdnp.jo/International_Oil_Conference/rtos-A106.pdf
Colorado/Green River oil shale would be a very big project but technically feasible. It would produce lots of CO2 and 3/4 a ton of tailings for every ton of oil shale.
Was sad to hear Obama pushing for the next generation biofuels. It is likely to cause a spike in fuel prices if it is completed, the ethanol EROEI is very low compared to other fuel alternatives and it is not renewable inasmuch as it depletes phosphate and potash reserves used for nitrogen-phosphate-potassium fertilizer.
The Republican push for more OCS leasing is not likely to bring short term results as there is a shortage of deep water rigs and more leases held by oil and gas majors and independents than can be developed in a decade.
TIME TO RETHINK
It is a tragedy that we think that either of these two Presidential Candidate or their side-kicks can fix our shame.
The bigger tragedy is that in this most technological age in all of history we allow Dinosaurs, hockey moms, and an assortment political prostitutes to offer non-solutions.
Those who read history will know what happened to one of history's great Empires, the Athenian Democracy. Pericles's controlled his democracy, (like a good president should.) After him, when Democracy was freed up for all comers,It soon degenerated into a political Cesspool, and they lost the Empire through corruption and incompetence. Finally the Spartans whipped them and luckily, the Intellectual principles of Socrates, Plato and Aristotle took root in a new moral democracy which paved the way for us.
We have just completed the loop again.
Sadly, McCain is dumber than a horse and Palin is shallower than a puddle.
Obama is very bright. He is too bright for the job required of him.
The Empire is Doomed either way.
Graham
Politicians reflect the culture in which they are "elected." No use blaming them...they know what to say or not, to get elected or keep their jobs. It's not politically possible to have a serious national discussion about energy issues in the US today. This is a direct reflection of the US public. We don't "allow" those people, we encourage them.
What NO one is talking about with respect to energy by 2030, let alone 2015, is the COST?
$100 oil to make a project feasible means it is marginal today and when oil is $200 it will likely be just as marginal as oil subsidizes near all aspects of current civilization so almost all cost inputs will have increased. If you could show that ANWR/OCS would cost under $10 a barrel to find (incorporating costs of dry holes), develop, produce, and deliver, then I would say, we best get started. If it's north of $80 in todays environment, I say let it lie, ceteris paribus.
Gross production, net production, resource, reserve, flow rates, costs all need to be part of the discourse - to compare only 'barrels' is just the bright wrapping paper.
Again, let the oil companies worry about cost. If you can't get a profit from such drilling, and it ain't subsidized, no-one will want to drill. (And if there is an unsubsidized profit to be made, then the EROI must be okay.)
Also, if we invest heavily today in a low EROI project that will pay off during decades, that is, in fact, a way to raise the costs and lower the availability of oil today - and lower the costs and increase the availability in the future. What's not to like? (Expect the increased carbon emissions, of course.)
Oil companies, for the most part, are advised by internal economists, who do not understand the law of receding horizons, because they have been trained in a discipline that has only been 'valid' during a particular expansionary period of human history. They a)look at their own companies prospects without looking at the global energy balance sheet and b)tend to focus on the potential future revenues, using todays costs. Look at the #1 consultant firm to energy industry IHS (owner of CERA) - they have focused, to their detriment on 'productive capacity' when what we care about are cheap and high flow rates.
I just don't think anyone has the data so they guess. Neither Professor Cleveland, EIA, you nor I have the cost data in energy or dollar terms for the future. But a teenager can see that we have harvested the easiest and cheapest, more or less first (not true in early days but definitely true last few decades).
This is why dispersive discovery model is powerful - there IS alot more oil resource under the ground - it just won't be developed at a profit. I am working on a post explaining why I think we are now past peak. Next week or two.
Nate, are you worried about Big Oil investing 10 barrels of oil at $100 today to get at 5 barrels of oil at $400 tomorrow? I'm not sure I understand your position here - exactly how Big Oil could believe investments with negative EROI would be profitable. I'd be grateful if you point me to a post that explains the thinking behind this.
Why EROI is Important
While being a good story, it didn't really answer my question - how Big Oil would fool itself to pursue projects with EROI close to or less than 1:1.
Nate,
I'm not disputing the concept of EROI. Although it can be difficult to calculate in complex processes it is valid. On the other hand, rightly or wrongly, it has never and never will be a factor in drilling decisions by the oil industry. The only exception would be if the gov't mandated it be used as a factor. Drilling and development economics are based on a common discounted cash flow model to determine the rate of return. There are 2 big wildcards in the process. The probability of finding X amount of reserves is obvious. The second critical factor is price expectations. As you imply these assumptions can be loaded with dangers. But so it is for every business selling a commodity. Automobiles, corn, tennis shoes, etc, all require an estimate of future purchase prices to estimate potential ROR.
During the last year, despite the $147 peak, I know of no company which used near term price expectations above $70 - $80 per bbl. And most companies actually decreased oil prices after year 2 while eventually allowing for a small inflation of prices beyond year 5. As far as whether a company should invest in Project X or not will be determined by discounted cash flow analysis. It will be done as such regardless of EROI. You and others certainly may explain any poor logic with this approach but it will not change the process. Again, I'm not saying EROI isn't a valid concept. It just has no place in current oil/NG exploration process.
As an aside, let me point out that in the general scheme of things, the correctness of any one company's price projections seldom has much impact on ultimate economic success. Consider relatively new wells which sold oil for $140+ a few months ago. I can assure you that when economics were run on those projects back in 2005 or 06 they used a price expectations closer to $50 at the time decisions were made. Thus much of the profits these days are purely serendipitous. In the past 33 years I've made clients some of the greatest profits when oil was $16 and NG was less than $1/mcf in 1986. I've also seen companies fail completely during periods of high oil/NG prices. It always boils down to a simple factor: does the company find commercial deposits of oil/NG or not. Prices have an impact on cash flow but if you don’t find reserves you got no flow to sell. This fact will also never change.
Prudeau Bay was profitable. ANWR is at the same latitude. Would it be that much more costly? If Thunder Horse was worth doing, I would think this is a better play.
The EIA paper that Cutler references shows a 30 year plateau through 2030 in US lower 48 offshore production, even rising a little in the last few years. This is the reference case projection. If this is way too optimistic, then the oil produced from OCS access would be much more significant.
funny how some only hear what they want to hear, then repeat a lie.
http://www.politifact.com/truth-o-meter/statements/663/
this time read it.
He wants alternative that don't destroy the earth in the process.
with Age comes reason.
Fools rush in.
At the ASPO conference in Sacramento two weeks ago, I asked Matt Simmons why the push for offshore drilling? His response was that Senator McCain visited Texas in the spring, and for some reason got it into his head that offshore drilling was the answer and had been pushing it since then. I responded, "Yes, but what's in it for the oil companies? In 2007, Exxon spent just under $20 billion on exploration, and $30 billion on stock buy-backs. If they wanted to drill offshore, they have both the money and the leases. He replied that his guess was that they were after just two restricted places: Santa Barbara, CA and Pensacola, Florida. Both are near existing processing infrastructure, and could be put into production at low cost within a year or two. Beyond that, the production cost will be above $90/barrel, and they currently have no interest.
Reading the MMS "Assessment of Conventionally Recoverable Hydrocarbon Resources of the Gulf of Mexico and Atlantic Outer Continental Shelf", 6/99, you discover that MMS uses a “Play-Based System” (http://www.mms.gov/itd/pubs/1999/99-0034/MMS990034-a.PDF) to estimate the potential oil. This uses past geological data to estimate future, but as yet undiscovered fields. While they have compared their estimates against previous studies, they have not used their system against known, played out fields to see how accurate it is. I used to work in Image Understanding, and the first thing we would do when someone gave us a “Revolutionary” algorithm that was supposed to be able to model the world was to try it on simple things, like rolling hills or sport arena parking lots. Invariable, they would fail. MMS has done the equivalent of not validating their system on easy, existing data. This seems like such an obvious oversight, it must be intentional. As a result, my guess is that their model’s accuracy is no better than 50%.
The next issue is cost. MMS estimates that there are approx. 2,500 potential pools of oil distributed over 876 fields. Each field will take multiple oil platforms, at a cost of 2 to 3 billion dollars each (Thunder Horse at $2B in 6,050 feet of water is a good example), so to harvest just a portion of the oil will take well over 300 hundred billion dollars in equipment alone. As a result, you can assume that much easier locations on dry land will be drilled first. They can reduce the cost by using far few rigs, but as it has already been pointed out, this will reduce the daily production to a trickle.
The last issue is that most of the OCS oil in the Gulf of Mexico, which is prime hurricane stomping ground. Hurricanes tend to strengthen in the middle of the gulf where the water is warmest, before losing strength in the cooler coastal waters (at least that’s the way it’s been for the last several years). One has to question the wisdom of placing dozens to hundreds of multi-billion dollar rigs where the storms are at their maximum strength while at the same time the planet is getting substantially warmer.