[Buggy]

$this->bbcode_second_pass_quote('', 'O')f all the oil and gas believed to exist on the Outer Continental Shelf, 82% of the natural gas and 79% of the oil is located in areas that are currently open for leasing," says Nick Rahall, Democratic representative for West Virginia.

[ROCKMAN]

I read the link Buggy…thanks. I see two very misleading statements. First, as I’ve ranted about before, there can be no reliable estimate of reserves from the subject OCS area without a significant amount of drilling. Notice how big the estimates are for the GOM. I don’t even consider that a very reliable number and it’s based on ten’s of thousands of drilled wells. I take shots at both sides of the argument: those who proclaim big numbers as well as though that say there’s nothing there. The answer to the question as to how much oil/gas is there is very simple: we don’t know. That’s why it’s so easy for both sides to argue their point: there’s not enough data to contradict either side.

The answer is simple: drill. If the reserves are there they'll be found eventually. If they aren't there it will be beneficial for us to know we can't count on them. It can be done with minimal environmental risk. In fact, if there is no oil there than there's no risk of a spill. All that happens is that the gov't makes billions of $'s in lease fees and the oil industry looses 10's of billion of $'s in capital (and that would be an issue for the shareholders...not the public).

The second statement:”Environmentalists say the top risk from drilling platforms is the wastewater they routinely discharge. Among others, this contains drilling fluids and heavy metals including mercury. According to the Committee Against Oil Exploration, a rig in the Gulf of Mexico rig dumps 90,000 tons of drilling fluid and metal cuttings over its lifetime” is an out and out LIE. I could be kind and call it a gross misrepresentation but I’m not feeling kind at the moment. The existing policy offshore now is zero discharge. Nothing goes off the rig into the ocean…not even rainwater. It’s captured and treated. Neither drilling mud nor cuttings are routinely discharged over board. And it can't be done secretly: rigs are constantly inspected and such discharges are easily spotted and this stuff stands out in the water like a dye marker. Companies spend many millions of $’s having these materials transported to gov’t regulated hazardous waste disposal companies. In cases where drilling mud is allowed over board it’s a very special fluid that has been approved by the gov’t and presents no threat.

Now in the bad old days a lot of horrible stuff did get dumped into the ocean. That's probably where they came up with that number. But those days are long past. The companies take these measures for one reason: it’s the law and if you’re caught breaking it the fines are much greater than any savings that would have been realized. There is no potential source of pollution in the US that is more regulated or monitored than offshore drilling. Don’t take my word for it. Do the research. The gov’t publishes volumes on this matter. Accidents do happen but the major oil pollution events are tanker mishaps and not drilling. As much damage as the recent hurricanes did there was an insignificant amount of pollution. Oil leaking from flooded cars produced many, many times the volume of oil in the water as came from the drilling/production industry in the GOM. Again, don't take my word on it: it's easily researched.

[Buggy]

Thanks for the thoughtful reply! So the big question for the oil companies is why aren't they drilling more where they are allowed to drill out there? I suspect the answer behind closed doors is "we don't want to waste big bucks on ifs when we're raking in the big bucks with the definites." But that is an assumption.

[TheDude]

Buggy - be sure to check out our thread on a recent NYT article Dearth of Ships Delays Drilling of Offshore Oil.

[ROCKMAN]

This also Dude: Rigzone just reported that Petrobras plans to double their Deep Water rig count by 2017. Maybe the driller stocks aren't that over priced after all.

[aahala2]

$this->bbcode_second_pass_quote('Buggy', '')$this->bbcode_second_pass_quote('', 'O')f all the oil and gas believed to exist on the Outer Continental Shelf, 82% of the natural gas and 79% of the oil is located in areas that are currently open for leasing," says Nick Rahall, Democratic representative for West Virginia.

[ROCKMAN]

aahala2

As you probably figured out by now there's only one way to "prove" how much oil/gas exists under any one spot on the planet: drill. Even then you have to take the results with a grain of salt. In my 33 years I've only drilled two "sure shot - can't miss" wells. And they both missed. One was a developing well that twinned the discovery well that found a nice big gas sand in the bottom of the hole. When I drilled it 200' away the sand was not only not productive...it wasn't even there. And I never found it anywhere in the field in subsequent wells. My first 5 "low risk development" wells off the platform we're failures. The field reserves fell from 25 million bbl of oil to 2 million. Gas dropped from 125 bcf to 25 bcf. All those big reserves were based on 2 exploratory successes and the exploration geologist's maps.

Little wonder why I go a little nuts when folks start saying they "know" how much oil/gas there is at a spot where no one has drilled a well within 100 miles.