McCain plays with fire on offshore drilling
Is this a smart move by McCain and Bush?
Politico-By calling for an end to the federal ban on offshore oil drilling, John McCain is placing a risky bet. He is wagering that skyrocketing gas prices have finally reached a tipping point, a threshold moment that has led voters to rethink their strong and long-held opinions against coastal oil exploration.
The stakes couldn’t be higher: If he is wrong, McCain will have seriously damaged his chances in two key states with thousands of miles of coastline — California and Florida — and where opposition to offshore oil drilling has been unwavering. And he will have undermined some of his closest political allies in those states and others, including potential fall battlegrounds such as Virginia and North Carolina.
“Before $4.25-per-gallon gas, this would have been like pulling a pin on a grenade and rolling it into the state,” said David Johnson, the former executive director of the Florida Republican Party. “It would have been a fool’s errand to recommend it. It was never, ever a thing that a smart politician would have done in Florida.”
In California, the drilling issue is just as volatile, said Sal Russo, a veteran Sacramento, Calif.-based Republican consultant.
“California got really sensitive about these issues since the 1969 Santa Barbara oil spill. And I don’t think it’s changed much since then,” he said. “There are strong feelings on the issue.”
What’s left of his conservative support is calling for this in an almost unified voice . . . he’d be a November-losing-fool if he pulled out his Sierra Club card on this one.
If we don’t do it, China will (is).
When did it become necessary to get approval from congress to explore for oil in the wide open ocean? Probably about the same time as the EPA came into being.
Sign the petition, Drill Here, Drill Now, Pay Less — http://www.americansolutions.com/
My only question is why do you think if companies like Exxon drill for oil the price will go down?
From my understanding they only uncap their reserves when the price goes way up. And when the price goes down they cap it again. Do not get me wrong this is maximizing profits and is what they are paid for, yet it has little to do with price savings to consumers.
The biggest way to drop prices is alternative competition to oil ie nuclear, wind, electric…….
#1 – If we don’t, China will/is.
#2 – If we can agree that speculators are having at least some impact on the price per barrel, then an announcement that the U.S. is going to immediately start tapping into the 98B barrels under our control, then the market would surely react positively. Some have speculated the price per barrel would be cut in half almost right away.
John, your alternative sources is a possible long term solution. Drill Here, Drill Now, Pay Less would have an immediate impact in price and our reliance on foreign sources. Then we can get on with alternatives…kind of like ‘Secure the border first’ then address the larger, long term problem.
Bart
#2 do you have any facts?
I’ll defer to Boortz who was challenged last week by Florida Senator Mel Martinez to prove the China drilling story…Martinez said it is an urban myth.
From boortz.com — Yesterday Florida Senator Mel Martinez said that China drilling off the coast of Cuba was merely an urban legend. So because we here at the Neal Boortz Show are so incredibly fair and balanced … we have tried to get to the bottom of this mystery. Here’s what we found.
All the way back in 2004, China’s Petrochemical Corporation known as Sinopec signed a memorandum of understanding with Cuba’s national oil company, known as Cupet to explore four oil blocks in Cuba. Keep in mind that both of these companies are owned by their communist governments. China’s Sinopec conducted six months of geological studies of the four Cuban blocks. This was the first attempt by Sinopec, China’s second largest oil and gas company, to enter oil and gas exploration and production in Cuba.
Then in 2005, China’s Sinopec signed an agreement with the Cuban government to jointly produce oil in Cuba off the coast of Pinar del Río. Ok so let’s get this straight. The governments of China and Cuba enter into a production sharing agreement … what exactly does that mean? This is when the Cuban government awards the execution of exploration and production activities to an international oil company like Sinopec. The contractor bears the mineral and financial risk of the initiative and, when successful, recovers capital expenditure and costs incurred in the year (cost oil) by means of a share of production.
So now, for your reading pleasure (and Mel Martinez’s) is a timeline of China’s oil exploration efforts in Cuba. This is from the World Security Institute …
2005
January 31: Cuba and China signed a contract in Havana providing for the Asian giant’s participation in extracting oil from a deposit off the island’s north shore, the press reported. The deal is between Cubapetroleos and the Chinese oil company Sinopec, said the official daily newspapaer Granma. In December, Fidel Castro announced discovery of oil at a site offshore from Santa Cruz del Norte, some 55 kilometers (33 miles) east of Havana. The deposit is believed to hold some 100 million barrels of “light” crude, or the equivalent of 14 million tons. (EFE, Prensa Latina, 31/1/05)
February 8: China’s oil giants began cultivating their virgin soil in Cuba. China Petroleum & Chemical Corporation (Sinopec), as the first comer, has inked a contract with Cuba Oil Company (Cubapetroleo) to jointly exploit oil in the Caribbean country. Under the terms of their contract, the two sides will join forces to prospect and exploit a potential oil-producing region. Chinese experts believe it is a significant beginning of the cooperation between China and Cuba in the petroleum industry. (SinoCast, 8/2/05)
March 22: Chinese oil drilling equipment has begun arriving in Cuba as state-run Cubapetroleo (Cupet) and its foreign partners prepare to significantly increase drilling along the northwest coast, industry sources said. “Four service units and a small rig have arrived and we are waiting for more,” said a Cuban oil service manager, asking his name not be used. There are currently five rigs operating along the northwest heavy oil belt, an 80-mile (128-km) stretch of coast in Havana and Matanzas provinces from whence come all of Cuba’s 70,000 to 80,000 barrels per day of heavy crude at 8 API to 18 API and with a high sulfur content. The poor-quality oil is burned in modified power plants and factories. (Reuters, 22/3/05)
April 6: The operator of China’s second-largest Shengli oilfield is stepping up overseas exploration, spending more on such ventures this year as the world’s No. 2 oil user grapples with falling reserves, officials said. Shengli Oilfield Administration Bureau, a unit of state-run Sinopec Group, will spend about $40 million drilling for oil and gas in Cuba, Iran and central Asia in 2005, company officials said. “This will be the heaviest spending in a year and we expect the pace to continue in the next few years,” a Shengli executive told the press. Shengli, which is among the first Chinese companies to venture abroad, will sink a total of eight wildcat and appraisal wells this year, four in Kazakhstan, two in Iran, and one each in Cuba and Kyrgyzstan. (Reuters, 6/4/05)
November 24: PetroChina Great Wall Drilling Co., Ltd. and Petroleum Company of Cuba held a ceremony for signing two drilling service contracts on November 3, 2005. It is the second-time cooperation between Great Wall Drilling Co., Ltd. and Petroleum Company of Cuba after the signing of a one-year petroleum service agreement on one 1500HP drilling rig and one 2000HP rig on April 8 this year. The contract signed this time includes three 2000HP drilling rigs. The contract has a period of one year and a value of over US$24 million. The project will be launched in January 2006. (China Chemical Reporter, 24/11/05)
December 22: Sinopec of China signed an agreement earlier this year to jointly produce heavy oil with Cupet in westernmost Pinar del Río province, with drilling expected to begin in 2006. (The Oil Daily, 27/12/05)
Still not convinced Senator Martinez? Here are some more reports from 2005 from the Energy Intelligence Group and National Post’s Financial Post & FP Investing in Canada.
… China is seeking oil everywhere and Cuba is no exception. Three large Chinese companies, SINOPEC, Petro China and CINOOC – China National Offshore Corporation, are involved in a large agreement, perhaps already underway, for coastal and deep-water explorations. Most significant to this topic, especially in light of other Chinese investment in Cuba, is the fact that Sinopec, China’s second largest oil company, has stated a goal of helping boost Cuba’s domestic oil production and producing 60% of its oil needs by 2006 … Additional plans for exploration and development of other blocs of potential reserves were announced by two other Chinese oil companies, China National Petroleum Corp. and China National Offshore Oil Corp., after talks with CUPET, Cuba Petroleum. Some exploration will be in coastal regions but much, based on the better quality of the oil, will take place in off-shore deep waters.
Let’s cut to the chase … and pardon me if I scream here:
The point isn’t that China is not presently drilling for oil within 90 miles of the U.S. The point is that they CAN! — and, thanks to the Democrat congress — we CAN’T.
Democrats would like us to wrangle over what IS happening. The issue is what CAN happen. They can drill. We can’t. They’re planning to. We aren’t. Even government educated Democrat myrmidons can understand that.
Ah, bb, what a classic. Urban myth as China-bashing AND environment bashing justification.
You’ve out-done yourself this time!
DOR,
When did I “China bash”…I’m the free trader here who supports China’s ability to compete in the open market.
But China makes an interesting reference when one sees how the dems/enviro-wackjobs are preventing the US from drilling off its shores.
bb, you’re off-base on this one.
Developing a long-term national plan for transitioning from fossil fuels to something else is the only option the federal government really has at this point.
The dregs left in the off-shore reserves aren’t going to produce a blip on the supply chart.
Do you think Bush would have waged a war to position our military on top of some of the largest proven reserves if he thought that domestic off-shore drilling was worth a squat?
Off-shore drilling is a political red-herring. And you took the bait.
CM,
If you, DOR and John disagree with me, then I am definitely on the right track.
Sounds you have a good strategy for leading your life bb.
I would definitely recommend that you NOT smoke two packs of cigarettes a day, and that you eat lots of vegetables.
I think John and David will agree with me.
Now, go forth and do the exact opposite.