Will lifting oil drilling bans in the U.S. lower the price of oil?

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In summary, there is a debate on whether lifting the bans on drilling for oil in the US will have any significant impact on the price of oil. Some argue that buying foreign oil supports terrorism and that drilling at home will lower prices, but these arguments are questionable. Opening up more areas for drilling may bring in more money and jobs, but the impact on prices may not be significant for several years. Additionally, the technology for offshore drilling may need to be imported from other countries. Ultimately, the announcement of drilling may not have a direct effect on current oil prices and other factors, such as declining demand, may have a greater impact.
  • #1
sketchtrack
My opinion is that it won't change much. I feel that the Bush administration and the oil companies are just pulling a fast one on us because Bush wants to lift these bans before he leaves office. The public are eating it all up.

There are two main arguments that they use to advocate lifting the bans.

1) Buying oil from foreign countries supports terrorism. This is kind of bogus. First of all, if we don't buy the oil, someone else will, and who might that be? China, Russia etc. By not buying foreign oil, we are giving more to our adversaries.

2) Drilling at home will lower the price. That is entirely dependent on the notion that oil companies will give us the oil cheaper out of pity. The reason this is, is because world wide production won't increase enough to make much of a difference in supply world wide.
 
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  • #2
The quick answer on price is no. It will not lower the price of oil at all. The best we can do with aggressive drilling is to tread water where we are. Which my keep the price from rising even more than it would otherwise, but it will not lower it.

Lets look at the figures. If we open everything and give incentives to the oil companies to drill where it is very expensive, the estimate quantity of oil in the US (50% prop) is 140 billion barrels. That is about 20 years supply at the current consumption. But the physics of oil says that we can't get it all out over 20 years, it would probably take 60 years. That means we would be able to produce about 1/3 of our oil over that period. Hmmm, that is what we are producing right now.
 
  • #3
Perhaps it has gone down already. I've been watching MSNBC, and since Bush came out and spoke about lifting the bans, the price of crude has dropped significantly. Congress would have to renew the drilling bans in late September, likely against the will of the American people.
 
  • #4
I believe it will drop but it will be more from market perception than actual supply/demand. I believe the premise that we should drill because it will lower the price due increased availability is misleading. But it is, none-the-less, a good idea to drill for OUR OWN oil. For the sake of national security if nothing else.

It WILL bring more money and jobs. Something we can always use more of. If/when ANWR opens, I plan on getting into the petroleum industry myself. There will a lot of work to do for many years.
 
  • #5
I know that a considerable portion of the reason why oil is priced so high is due to the value of the US dollar (internationally). If we were to increase the amount of oil produced (Here at home where the international value has less of an impact) why would it not have an impact at all?
 
  • #6
not for a long time.
 
  • #7
Does the fact that refineries are running near or at max capacity affect anything? It's nice having crude oil and all, but we can't even use it until it gets through refineries, so is there a point to having a big surplus of it?
 
  • #8
no, there isn't really. but even if we started offshore drillin today, it would be years before we saw a drop of that at the pump. but if it wasnt so hard to build more refineries(theres about amillion miles of red tape and codes/regulations to adhere to), a large surplus would bring prices down.
 
  • #9
Another problem is that most of the technology for this sort of drilling was developed in the North Sea - so you are going to either reinvent everythign or let a bunch of Scots and Norwegians in!
 
  • #10
Norwegians at least bring Metal (music) with them. What are the Scots good for?
 
  • #11
wildman said:
The quick answer on price is no. It will not lower the price of oil at all. The best we can do with aggressive drilling is to tread water where we are. Which my keep the price from rising even more than it would otherwise, but it will not lower it. ...
If that is true it is a very good argument for drilling, as absent drilling the implication is vastly higher oil prices than with.

thomasxc said:
no, there isn't really. but even if we started offshore drillin today, it would be years before we saw a drop of that at the pump. ...
Could you explain why you think the future expected supply of oil does not effect today's price? Anyone can go buy a futures contract for 2013 oil, on common markets, this instant. One can buy future oil further out than that through less accessible methods.
 
  • #12
WarPhalange said:
Norwegians at least bring Metal (music) with them. What are the Scots good for?

Beer
 
  • #13
Light crude dipped to $123 on Nymex today, a $24 drop from the peak a few days ago. Smells like correction time.
 
  • #14
WarPhalange said:
Norwegians at least bring Metal (music) with them. What are the Scots good for?

drankin said:
Beer
I was going to say they always have a copy of 'Braveheart' in the pocket ready to go.
 
  • #15
mheslep said:
If that is true it is a very good argument for drilling, as absent drilling the implication is vastly higher oil prices than with.

Could you explain why you think the future expected supply of oil does not effect today's price? Anyone can go buy a futures contract for 2013 oil, on common markets, this instant. One can buy future oil further out than that through less accessible methods.
And on the other hand, I have seen nothing concrete that says the announcement of drilling will help drop prices.

After all, the announcement of additional oil from Iraq last month (more than we'd get from ANWR, and much sooner too) did absolutely nothing to drop prices. What does seem to help though is declining demand from economic conditions.

So what do all the economic experts predict? Is there anyone out there with better credentials than Rep. Don Young that talks quantitatively about the effect on prices of drilling announcements? Last I checked, "they" didn't have a consensus on how big a role is played by speculation, and how much is driven purely by demand.
 
  • #16
drankin said:
Beer

Drinking it maybe.

In any case, you can personally thank Bill O'Reilly for the gas prices coming down.

http://www.newshounds.us/2005/11/30/bill_oreilly_takes_credit_for_lower_gas_prices.php
 
  • #17
In recent years the big oil companies despite making windfall profits have not shown much of an interest in oil exploration.

The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.

http://ap.google.com/article/ALeqM5jdMq36pfzhyHeyexEU51JX5sr1egD922FK000 [Broken]
 
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  • #18
Personally, lifting these bans is only a short term fix at best. The United States already peaked in oil production back in 1970, just as Hubbert predicted it would. Getting oil out of places we couldn't before like ANWR isn't going to do much for the U.S. addiction to it considering 35% of our supply is imported. Right now, demand is the problem and prices are the only thing that's repulsing it right now. Demand could totally strip supply and plus, anything we don't use will probably be mopped up by countries eager to develop.
 
  • #20
Herodotus said:
Personally, lifting these bans is only a short term fix at best. ...
A short term fix is just what is needed: a 10-40 year bridge over to better nuclear and renewable power.
 
  • #21
mheslep said:
A short term fix is just what is needed: a 10-40 year bridge over to better nuclear and renewable power.
But is it a short term fix? Will someone please show me a reputable study that concludes this?
 
  • #22
mheslep said:
A short term fix is just what is needed: a 10-40 year bridge over to better nuclear and renewable power.
It's a pity we didn't think of this 10years ago - then it would have been solved by now.
 
  • #23
I split of the discussion of nuclear energy, recycling Pu, proliferation and consequences, since it was way off-topic with respect to lifting bans on drilling in ANWR and off-shore in US.

New thread on nuclear energy and proliferation is
Feasibility of Nuclear Energy with Recycling (Pu) as Energy Solution in US
https://www.physicsforums.com/showthread.php?t=247478
 
  • #24
mgb_phys said:
It's a pity we didn't think of this 10years ago - then it would have been solved by now.

Yeah, if we had done it 10 years ago we would only have twenty years to wait for our 2 cent break at the pump.
 
  • #25
mheslep said:
If that is true it is a very good argument for drilling, as absent drilling the implication is vastly higher oil prices than with.

Could you explain why you think the future expected supply of oil does not effect today's price? Anyone can go buy a futures contract for 2013 oil, on common markets, this instant. One can buy future oil further out than that through less accessible methods.

The future expected supply does affect the price. It is that is isn't enough to make any difference. It may keep it from going up more than it would have though.
 
  • #26
I think we need a combination of both increased drilling, which may immediately lower prices because of future expected supply, and alternative energy research. Even if drilling doesn't immediately lower prices now, it eventually should. And that, combined with improving fuel efficiency with newer technology, creating viable alternative energy, and so forth, I think most definitely would. We need to come at the problem from all ends, IMO.
 
  • #27
WheelsRCool said:
I think we need a combination of both increased drilling, which may immediately lower prices because of future expected supply...
Multiple claims of this "immediately lower prices" - not a single reputable source cited to support this unjustified claim. Still waiting...
 
  • #28
Which is why I said it may lower prices.
 
  • #29
WheelsRCool said:
Which is why I said it may lower prices.

The only reason why it might lower prices is because oil companies are jacking the prices up more than they should be right now in an attempt to get us to let them drill. The price drop at peak production of the reserves would only be about 3% anyways though. The idea that knowing that we have that oil for later is going to immediately help lower prices could only mean one of two things, either the oil companies will drop the price back to normal (not overly inflated), or they drop the price by a fraction of a cent according to supply and demand.
 
  • #30
mheslep said:
A short term fix is just what is needed: a 10-40 year bridge over to better nuclear and renewable power.

Nuclear power has some major bad consequences because of the potential for disaster.[1], and especially all the nuclear waste generated which creates a problem for mankind for thousands of years.[2]

1 www.cnn.com/interactive/asianow/9910/history.nuclear.disaster/dates.exclude.html[/URL]

2 [PLAIN]http://gdi.ce.cmu.edu/gd/education/edradiocase.html [Broken]
 
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  • #31
drankin said:
If/when ANWR opens, I plan on getting into the petroleum industry myself.

ANWR can't be opened for oil exploitation because it's a nature preserve.

http://arctic.fws.gov/
 
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  • #32
Mental Gridlock said:
Nuclear power has some major bad consequences because of the potential for disaster.[1], and especially all the nuclear waste generated which creates a problem for mankind for thousands of years.[2]

1 www.cnn.com/interactive/asianow/9910/history.nuclear.disaster/dates.exclude.html[/URL]

2 [PLAIN]http://gdi.ce.cmu.edu/gd/education/edradiocase.html [Broken]

Note that in the US at least, no deaths have ever been attributed to commercial nuclear accidents. Second, though waste is a complicated problem, source [2] does not support your claim of 'problem for mankind.. thousands of years'.
 
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  • #33
Mental Gridlock said:
ANWR can't be opened for oil exploitation because it's a nature preserve.

http://arctic.fws.gov/
So? As your link states, ANWR is 1.5 million acres. The proposed drilling requires only a few dozen acres.
 
  • #34
Your house probably uses something like 500sqft of land if you have a lawn. It's okay, I'm only going to use one or two to put an outhouse there.

What do you say?
 
  • #35
mheslep said:
So? As your link states, ANWR is 1.5 million acres. The proposed drilling requires only a few dozen acres.

WarPhalange said:
Your house probably uses something like 500sqft of land if you have a lawn. It's okay, I'm only going to use one or two to put an outhouse there.

What do you say?
How do you even remotely compare the two? If people actually lived there and had a stake in the land in question, and they objected, perhaps you'd have a point. There is nobody, you don't. You may also want to check your math in making those comparisons. 100/1.5 million vs 10:500. Or, go up there. Dropping yourself randomly into ANWR, you could easily spend a lifetime random walking and never even lay eyes on the proposed drilling rigs.
 
<h2>1. Will lifting oil drilling bans in the U.S. immediately lower the price of oil?</h2><p>No, lifting oil drilling bans in the U.S. will not immediately lower the price of oil. It takes time for new drilling operations to start producing oil and for the market to adjust to the increase in supply.</p><h2>2. How much of an impact will lifting oil drilling bans in the U.S. have on the price of oil?</h2><p>The impact of lifting oil drilling bans in the U.S. on the price of oil is uncertain. It depends on many factors, such as global demand for oil, production levels in other countries, and economic conditions.</p><h2>3. Will lifting oil drilling bans in the U.S. lead to a significant increase in domestic oil production?</h2><p>It is possible that lifting oil drilling bans in the U.S. could lead to a significant increase in domestic oil production. However, it is not guaranteed as there are many factors that can affect production levels, such as technological limitations and market conditions.</p><h2>4. Will lifting oil drilling bans in the U.S. decrease our dependence on foreign oil?</h2><p>Lifting oil drilling bans in the U.S. may decrease our dependence on foreign oil, but it is not a guarantee. Even with increased domestic production, the U.S. will still rely on imports to meet its energy needs.</p><h2>5. Are there any potential negative consequences of lifting oil drilling bans in the U.S.?</h2><p>There are potential negative consequences of lifting oil drilling bans in the U.S., such as environmental impacts and potential conflicts with local communities. It is important to carefully consider all potential consequences before making any decisions regarding oil drilling bans.</p>

1. Will lifting oil drilling bans in the U.S. immediately lower the price of oil?

No, lifting oil drilling bans in the U.S. will not immediately lower the price of oil. It takes time for new drilling operations to start producing oil and for the market to adjust to the increase in supply.

2. How much of an impact will lifting oil drilling bans in the U.S. have on the price of oil?

The impact of lifting oil drilling bans in the U.S. on the price of oil is uncertain. It depends on many factors, such as global demand for oil, production levels in other countries, and economic conditions.

3. Will lifting oil drilling bans in the U.S. lead to a significant increase in domestic oil production?

It is possible that lifting oil drilling bans in the U.S. could lead to a significant increase in domestic oil production. However, it is not guaranteed as there are many factors that can affect production levels, such as technological limitations and market conditions.

4. Will lifting oil drilling bans in the U.S. decrease our dependence on foreign oil?

Lifting oil drilling bans in the U.S. may decrease our dependence on foreign oil, but it is not a guarantee. Even with increased domestic production, the U.S. will still rely on imports to meet its energy needs.

5. Are there any potential negative consequences of lifting oil drilling bans in the U.S.?

There are potential negative consequences of lifting oil drilling bans in the U.S., such as environmental impacts and potential conflicts with local communities. It is important to carefully consider all potential consequences before making any decisions regarding oil drilling bans.

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