Jul 15, 2008 11:07 pm US/Central
Good Question: Why Aren't We Drilling For Oil?
(WCCO)
It seems so obvious. We need more oil. We have more oil. So why not drill for it?
"They're allowed to drill it, and yet they haven't touched it," complained presidential candidate Barack Obama about the oil companies. He said the companies are not drilling on more than 75 percent the leases the already hold.
"They're trying to make money. If there's oil that they can get to profitably, then they'll try to get to it," said Justin Revenaugh, Ph.D., University of Minnesota Geophysicist, and former oil company employee. Revenaugh said he used to help oil companies predict where they'd find oil.
He said he doesn't believe there's a conspiracy by the oil companies where they're purposely not drilling. Instead, there are several factors that limit the ability to drill, especially in the deep seas of the Gulf of Mexico.
"One the biggest problems is the number of drill vessels. Drilling offshore it takes either an oil platform to be built or a drilling vessel, and right now they're all in use," explained Revenaugh.
The leases in the Gulf of Mexico are for deep sea drilling. Imagine lowering a drill bit more than a half-mile beneath sea level. Revenaugh said the specialized drilling vessels (ships) can cost from hundreds of millions of dollars to one billion dollars.
That's one reason why President Bush wants to allow drilling off the east and west coasts, in an area called the Outer Continental Shelf. It's closer to shore than the area of the Gulf of Mexico.
"So if you open up near shore environments, its easier acquisition," said Revenaugh.
Even though drilling in the Outer Continental Shelf is easier and cheaper than the drilling in the Gulf there's still strong opposition to the plan.
"There is the potential for pretty bad ecological disasters if something goes awry," explained Revenaugh. An oil spill at sea is a much bigger mess than an oil spill on land, where it can be more easily contained.
There are other sources for oil in the U.S. that are not being tapped. The Alaskan National Wildlife Refuge may have 22 billion barrels of oil under it but the land is protected by law for environmental purposes.
New domestic drilling is happening in North Dakota and Montana in the Bakken Formation, where explorers are looking for up to four billion barrels of oil.
Still, according to Revenaugh, the main reason that a huge increase in drilling isn't happening in the United States is because the risk outweighs the potential reward, even at record high oil prices.
"They chase what is the easier oil, and right now it's not in the U.S.," he said. "What was easy is gone."
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Click to enlarge
Stumble It!
Reporting
