by J John Swanko
12/07/10 (People Port) That appears to be Big Oil's position on the -new rules, limits- on drilling deepwater Gulf wells. Last year, the Gulf was the fastest growing oil province in the world. The environmental impact of OCS drilling will be done by the government, limited to those states expressing an interest in having wells drilled there.
Big Oil is trying to project an image, it is following, fully involved in. BP's solutions to deepwater drilling. Identifying problems, working through solutions. This means the media types will no longer be able to point to walrus impacts in the Gulf. It is a start.
Big Oil was moving into deepwater production before Congress came up with the Deep Water Royalty Relief Act. While claiming it was not important, someone sued, United States Court of Appeals for the Fifth Circuit in Santa Fe Snyder Corp., et al. v. Norton All types of new rules, and a new and improved "Energy Policy Act," better royalty relief.
Quite a few studies show drilling deepwater is very profitable at $60 a barrel. That means the Oil and Gas they find is basically free, for a while. In other words, deepwater drillers make many extra billions. Only since the Deepwater Horizon disaster, has Big Oil decided to collectively spend an extra billion dollars on Rapid Response.
This gets way better. Since discovering a deepwater well system can replace all imported energy (please see Three Platforms' Production Projected To Exceed Production For Most States), drilling new wells in that area has slowed. Some report leases have expired. A choice causing some to ask, Do these firms make too much money. The chance at bringing in 500,000 barrels a day from a well system is no where near the cost of making sure it does not blowout.
We are only twenty systems away from the goal of not needing foreign oil. The area most likely to hold those wells is known and permits drilling. Some are deciding to let their leases expire. The money we use to import oil increases the supply of dollars overseas, lowering the value of dollars.
BP is in the thick of the fight and has gained permission. That permission, Big Oil claims is too hard. One option: From an economic perspective, it may be easier, more efficient to simply pay Big Oil 10 to 20 billion a year. We allow those firms that put their money into drilling correctly, drill our deepwater wells.
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