Trump Announces Massive Expansion In Offshore Drilling

[Swordsmyth]

Speaking to reporters, Interior Secretary Ryan Zinke said that "the Trump administration is proposing to make more than 90 percent of the U.S. outer continental shelf available for oil leasing" adding that he is "proposing 25 of 26 planning areas on the Outer Continental Shelf be considered for responsible and regulated leasing" and that "nearly all of the nation’s outer continental shelf is being considered for drilling, including areas off the coasts of Maine, California, Florida and Alaska" in the first major step toward the administration’s promised expansion of offshore drilling.
The proposal, which environmentalists immediately panned as an environmental disaster and giveaway to the fossil fuel industry, is far larger than what was envisioned in President Trump’s executive order last year seeking a new plan for the future of auctions of offshore drilling rights. That order asked Zinke to consider drilling expansions in the Atlantic and Arctic oceans, according to The Hill (http://thehill.com/policy/energy-environment/367438-trump-proposes-massive-expansion-of-offshore-drilling).

The plan is part of Trump’s agenda to boost domestic oil and natural gas production to create “energy dominance” and unlock the nation’s “great energy wealth.”
There's more to come as Thursday’s announcement was just one of three major steps the administration must take to write a new plan for offshore drilling rights sales. After taking public comments on the proposal, officials must revise it and put out a new proposal and then finalize it, a process that could take more than a year.

At each of those steps, Interior can remove areas from consideration for drilling, but cannot make new areas available.

More at: https://www.zerohedge.com/news/2018-01-04/environmentalists-outraged-after-trump-announces-massive-expansion-offshore

[Zippyjuan]

Obama expanded area of the Gulf to more oil drilling. The plots drew zero bids. The problem is that offshore drilling is so expensive- even an exploratory well can cost $1 billion. Fracking is much more attractive (and even that struggles for profitability at $50 a barrel). If it gets above $100 it may regain some interest.

[Swordsmyth]

Obama expanded area of the Gulf to more oil drilling. The plots drew zero bids. The problem is that offshore drilling is so expensive- even an exploratory well can cost $1 billion. Fracking is much more attractive (and even that struggles for profitability at $50 a barrel). If it gets above $100 it may regain some interest.

Offshore costs are coming down.

[Zippyjuan]

Offshore costs are coming down.

Fracking costs have been coming down. Offshore costs haven't much. Part of the problem is how deep they have to drill.

https://wtop.com/business-finance/2016/08/us-oil-and-gas-lease-sale-to-be-broadcast-live-on-internet/


NEW ORLEANS (AP) — The federal government’s annual sale of oil and gas leases in the Gulf of Mexico attracted hardly any interest on Wednesday, reflecting a dismal outlook for offshore drilling.

Only three oil companies bid, on just 24 of the nearly 4,400 tracts offered for drilling and exploration in the Gulf of Mexico off the Texas coast. None competed against each other.

“Everything about this sale screams wariness,” said Stewart Glickman, an analyst for S&P Global Market Intelligence.

Between them, BP Exploration and Production Inc., BHP Billiton Petroleum Inc., and Exxon Mobil Corp. offered a total of $18 million, the Bureau of Ocean Energy Management said.

For perspective, that’s about 32 millionths of the combined market capital of the bidders’ parent companies, which totals more than half a trillion dollars.


Declining prices for renewable energy doesn’t yet threaten the Gulf’s offshore oil industry, Glickman said. The real competition is from onshore drilling, which is much cheaper, faster and less risky.

Ten of the tracts that were bid on Wednesday are in depths of 400 to 800 meters (a bit less than a half-mile) and 14 are between 800 and 1,600 meters, or just under a mile deep.

Operating a rig at 800 meters or less can cost eight times as much as a top-end onshore drilling rig, which costs about $20,000 a day, Glickman said.

[Swordsmyth]

Fracking costs have been coming down. Offshore costs haven't much. Part of the problem is how deep they have to drill.

https://wtop.com/business-finance/2016/08/us-oil-and-gas-lease-sale-to-be-broadcast-live-on-internet/

Offshore costs are falling as well, your article is old news.

[Zippyjuan]

Offshore costs are falling as well, your article is old news.

Less than a year and a half ago. Not old news. It is considerably more expensive than fracking.

[Swordsmyth]

Less than a year and a half ago. Not old news.

August 24, 2016 5:09 pm

It's 2018 now Zip, it's old news.

[Zippyjuan]

August 24, 2016 5:09 pm

It's 2018 now Zip, it's old news.

Thank you for providing us with newer information.

How about six months ago?

http://blogs.platts.com/2017/06/12/offshore-oil-struggles-fft/

June 12, 2017


Breakeven prices for offshore projects generally are around $50-$60/b, analysts say, higher than world oil prices which have hung in the mid-$40s/b to low-$50s/b in the last year.

As a result, operators are being forced to adjust their thinking in a changing industry where speed, flexibility and economy are crucial.

As the industry moves into a third year of lower oil prices and Brent prices linger at or below $50/b, a mere handful of offshore projects have been sanctioned recently.

Many producers have shelved exploration in favor of quicker-return US shale onshore. Those still with an offshore presence are
straining to whittle down the cost of commercializing pricey discoveries made years ago at $100/b oil and find new fields to bring online at current prices.

By end of April, seven offshore fields worldwide had been approved in 2017 that will add 500,000 b/d of oil equivalent production by 2020, according to researchers at Bernstein Energy.

But six of the seven are tiebacks “hookups to existing production facilities that will yield less than 50,000 boe/d each,” Bernstein said in its most recent monthly Offshore Activity Monitor.

[Swordsmyth]

Thank you for providing us with newer information.

How about six months ago?

http://blogs.platts.com/2017/06/12/offshore-oil-struggles-fft/

June 12, 2017

Feds say offshore drilling rule changes will cut industry costs, increase production

Updated Dec 29; Posted Dec 29

http://www.nola.com/environment/index.ssf/2017/12/feds_say_offshore_oil_rule_cha.html

The World's Biggest Offshore Boom Is Accelerating

https://oilprice.com/Energy/Crude-Oil/The-Worlds-Biggest-Offshore-Boom-Is-Accelerating.html


Costs may not be low enough yet but they are coming down and they will continue to do so.

It doesn't matter anyway we need the areas opened up for drilling in case oil prices go up too far because of a war in the Middle East or some other black swan.

[Zippyjuan]

Feds say offshore drilling rule changes will cut industry costs, increase production

Updated Dec 29; Posted Dec 29

http://www.nola.com/environment/index.ssf/2017/12/feds_say_offshore_oil_rule_cha.html

The World's Biggest Offshore Boom Is Accelerating

https://oilprice.com/Energy/Crude-Oil/The-Worlds-Biggest-Offshore-Boom-Is-Accelerating.html


Costs may not be low enough yet but they are coming down and they will continue to do so.

It doesn't matter anyway we need the areas opened up for drilling in case oil prices go up too far because of a war in the Middle East or some other black swan.

First link claims it may save less than $23 million a year.


The safety systems proposal to be published in the Federal Register on Friday (Dec. 29) predicts it will save the oil and gas industry as much as $288 million over the first 10 years it's in place.

The industry had over $100 billion in revenues in 2016. That is, as they say, a drop in the bucket.

[Swordsmyth]

First link claims it may save less than $23 million a year.



The industry had over $100 billion in revenues in 2016. That is, as they say, a drop in the bucket.

Little drops of water and little grains of sand make the mighty ocean and the mighty land.

Deregulation and technology will continue to bring down costs.

And it doesn't matter anyway, we need the areas opened up for drilling in case oil prices go up too far because of a war in the Middle East or some other black swan.

[Swordsmyth]

House Republicans unveiled a draft proposal (https://naturalresources.house.gov/uploadedfiles/6.14_discussiondraft_h.r_.pdf) this week that would place fines on states that block offshore gas and oil drilling.
The Republican draft proposal, first reported by The Washington Post (https://www.washingtonpost.com/news/energy-environment/wp/2018/06/13/house-republicans-propose-financial-penalties-for-states-that-block-offshore-drilling/?noredirect=on&utm_term=.a8b2fe559470), will be discussed at the Natural Resources Committee on Thursday.
It would allow states to disapprove of offshore drilling for gas and oil in half of its lease blocks without facing any penalties.
However, states with proposed lease sales that disapprove of drilling in more than 50 percent of the blocks would have to pay a fee equal to at least one-tenth the estimated revenue the government would have made if it had leased the blocks.
The proposal also sets up a revenue-sharing scheme for states that allow drilling.
The move would help pressure local politicians to fall in line with President Trump (http://thehill.com/people/donald-trump)’s plan to increase offshore leasing.

More at: http://thehill.com/policy/energy-environment/392106-republicans-propose-placing-penalties-on-states-that-ban-offshore

[thoughtomator]

The general risk of business is plummetting now that Obama's pirates are no longer running the show. That's why everything picked up the moment Hillary lost.