Peak Oil- what it is and how it will impact your life

Re: Peak Oil; what it is and how it will impact your life

McClendon has an axe to grind and has to be taken with a grain of salt, the way Chesapeake has handled their business here in NEPA. That said, gas drilling is way down (I know of only one rig turning a bit now) and rigs capable of hitting the Marcellus and other shales horizontally have been taken off line and parked.

The way things look to me, and from my limited perspective, peak gas will come well after peak oil. But it is true that failure to invest in infrastructure is folly, because it takes a finite time to ramp up from a barely alive industry. The real place to make time up here would be to get pipelines in place. Drilling is short term comparative to getting rights of way for gathering and transmission lines sorted out. That activity is zero here beyond previously (last year) started ditch digging on leased ROWs. Some might say that the cart got before the horse, there are wells blocked in that were drilled last year and are waiting on a way to get the gas to market. Now, if foggy bottom really wanted to support local employment (read as labor) efforts and put experienced travelers to work, an injection of funds in pipeline work would help a lot to bridging the gap between supply and demand after the tank farms are MT.

 

Re: Peak Oil; what it is and how it will impact your life

Yeah Mclendon is self promoting but his sentiments are echoed nearly unanimously in the industy. The only diversity is that some say it will be a slower climb and may start mid to late 2010. But all agree that drastically higher prices are certain.

And yes peak gas is a ways off. But with declining oil discoveries and harder and more expensive production, the recent boom in activity is focusing on natural gas. As oil supplies decline we will start using NG more and more as an alternative fuel. (the only practicle alternative to oil available at this time)
Thus hastening the inevitable peak in NG. But that is the nature of building our civilization on finite resources. Perhaps NG will bridge the (massive) gap between oil and a successful and practicle renewable energy source.

 

Re: Peak Oil; what it is and how it will impact your life

The battle is on and if the war is lost we will all be paying the price. This is what I have been saying. This administration is actively trying to destroy our domestic oil and gas industry.


　
Column: Obama unfairly targets oil and gas
Don Briggs, president of the Louisiana Oil and Gas Association, writes about the potential effects of President Obama's proposed 2010 budget, which contains provisions that would end $26 billion in tax incentives for oil and natural gas companies. Briggs writes that several Democratic proposals could wreck the industry and stifle much-needed development in areas such as Louisiana's Haynesville Shale region. The Advertiser (Lafayette, La.) (5/10
　
Louisiana Oil & Gas Association: Administration determined to fade out oil, gas industry
Don Briggs • news@theadvertiser.com • May 10, 2009
’
　
It was just a few weeks ago that we felt a breath of fresh air as Congress voted not to include President Barack Obama's proposed oil and gas tax increases in the budget reconciliation process.
Thursday, Obama outlined the details of his FY 2010 budget. As expected and feared, he continued his attacks on the U.S. oil and gas industry. The details laid out his plan to end $26 billion in industry tax breaks, calling them "unjustifiable loopholes."

The only bright spot in an otherwise scary budget proposal was the removal of the excise tax on oil produced in the Gulf of Mexico. However, a White House official quickly cautioned against getting too excited over this omission, then added that any new tax proposals would be included in materials released next week.

In justifying the proposal the White House said "Oil and, to a large extent, gas are internationally traded commodities, and their prices are determined on the world market. As a result, domestic oil and gas production subsidies do not significantly reduce the prices that consumers pay for products such as gasoline and home heating oil, resulting primarily in higher returns to the oil industry."

Such economic reasoning makes me wonder if I'm living on the same planet as these people. The U.S. produces 5.3 million barrels of oil per day, of which 80 percent is produced by independent oil and gas producers. Stripping the independents of the economic incentives needed to explore for oil and gas will cause U.S. oil and natural gas production to decline, thus causing higher prices and even a greater dependence on foreign countries for oil.

In a further effort to end domestic oil and gas production, the White House plans to terminate the Oil and Gas Research and Development Program (about $50 million a year).

These programs typically develop technologies that improve production, reduce costs and can lead to production in areas that previously could not be developed. The budget goes on to say that these developments "should instead be funded by the companies that benefit from the projects."

What is most shocking about that last statement is just how hypocritical it is. The president's stimulus package includes billions of dollars for development and deployment of renewable energies.

The Obama administration's bias against the domestic oil and gas industry comes not only in the Obama's FY 2010 budget. Two weeks ago, Senate Bill 888 was filed. If passed, SB 888 will amend the Internal Revenue Code of 1986 to terminate certain incentives for oil and gas.

There's more. U.S. Rep. Henry Waxman, D-Calif., is pushing legislation to stop hydraulic fracturing of natural gas wells, which would stop the exploration and development of natural gas plays such as the Haynesville Shale and others.

Let me be perfectly clear. We are in a fight for our right to explore and produce America's oil and natural gas resources. There are now 60 Democrats in the Senate. A party line vote is all it would take for the budget to pass. The negative impact on the U.S. oil and gas industry would be immeasurable.

Don Briggs is president of the Louisiana Oil and Gas Association. His column appears twice a month in The Advertiser. He can be reached at don@loga.la.

 

Re: Peak Oil; what it is and how it will impact your life

It's coming...



Chu sees promise as crude oil prices increase
Energy Secretary Steven Chu told reporters this week that a recent increase in oil prices may signal the beginning of recovery for the world's economy. Chu said crude oil prices, which have increased by about $25 per barrel since the beginning of this year, should continue to increase as demand returns to normal levels. Reuters (5/19)


IEA report says oil prices may increase rapidly by 2
012
A report from the International Energy Agency says a decrease in activity by oil companies is setting the stage for rapid price increases during the next three years as worldwide demand begins to strain supplies. The recession has caused oil firms to eliminate or delay projects that would have produced a total of more than 6 million barrels per day, according to the report. The Wall Street Journal (5/20)

 

Re: Peak Oil; what it is and how it will impact your life

Congressional committee is advised to increase U.S. oil supplies
Oil analysts this week encouraged members of Congress' Joint Economic Committee to consider the long-term development of U.S. oil supplies in anticipation of price increases. James Hamilton of the University of California, San Diego, told lawmakers that the global economic recovery likely will strain oil supplies, leading to a repeat of 2008's price increases. Oil & Gas Journal (5/21)

 

Re: Peak Oil; what it is and how it will impact your life

I have to consider that the oil analysts are motivated by more than an altruistic wish to do good for society. However, I completely agree that the US needs to develop supply sources. That said, the domestic fields available for exploitation are higher cost producers at this time and assuming some dramatic technical advance does not occur. And I have no reluctance to use up resources under the control of other political entities as long as they can beat our costs. Obviously, if they choke us off by raising prices, we need to be able to counter with our own such that we can squeeze their revenue stream. That squeeze will serve several purposes: We benefit from our ability to control our costs, and the developing nations gain the same benefit. If all goes well, the US will get to dictate price instead of some camel flea infested portion of the world deserts. I cannot agree that national treasure should be expended in development. Loosening restrictions on drilling will do the job well enough if supply and demand are allowed to function. There is no need for a subsidy.

I am convinced that Peak Oil is real, the only open question is whether or not it is here now, already passed, or coming in the future. (It is like land, there ain't a lot more of it, and at some point cemeteries are going to have to grow crops if we don't get the population under control.) In the meantime, oil is only one part of the energy mix, and others are going to have to start competing soon, or we are going to go back to subsistence level existence. And I, for at least one, do not know diddly about the care and feeding of oxen or mules.

 

Re: Peak Oil; what it is and how it will impact your life

Continuing my documentation of this administrations continued hobbling of the domestic oil and gas industry. Foriegn imports are now up to 70%. I have talked to a couple of independent producers lately and they tell me that a month ago they had oil setting in tanks that they couldn't sell. Refineries were full. But just in the last couple of weeks they have had calls for their oil again. It is starting to move. This means that we are using up the excess that has flooded the market the last several months. When that excess is completely used and we are back to depending on production supply things are going to get tight.

Witht the lastest federal restrictions and manipulations hindering a resurgence of domestic drilling activity we are not going to be able to meet rising demand. And it won't come from overseas either. Foriegn producers will be in the same boat as far as meeting demand. The latest slump in production has been a global slump. It has been made worse domestically by this administrations irresponsible, ill-concieved, and unconscionable policies.

So remember that a majority of Americans voted for change. Because that's all you'll have left when gasoline hits $5 a gallon again.


Drilling measure would increase royalties, shorten leases
Members of the House Natural Resources Committee say they are preparing a bill that would increase drilling royalties on federally held land by 6.25 percentage points and reduce the length of leases by five years. An analyst with the American Petroleum Institute said the proposed legislation, if enacted, likely would discourage exploration by oil and natural gas companies, especially offshore. The Hill (5/26)

 

Re: Peak Oil; what it is and how it will impact your life

Now thats something I think is the direct cause of oil prices. Government flexing prices.

 

Re: Peak Oil; what it is and how it will impact your life

Environmentalists hope to stop oil-sands expansion
Thirty environmental groups, including the Sierra Club and Greenpeace, are seeking policy changes in the U.S. and Canada to increase investments in clean energy and stop other energy production. Among other things, the groups want to stop the expansion of Alberta's oil sands. The New York Times/Greenwire (6/4)
　
Wonder if Government Motors will make a car that runs on "clean energy" maybe a wind powered car.
<DIR><DIR>Proposed bill would regulate hydraulic fracturing
U.S. Reps. Diana DeGette of Colorado and Maurice Hinchey of New York, both Democrats, are expected to introduce a bill next week that would grant federal oversight over hydraulic fracturing. Experts say that if the bill passes, costs for unconventional energy would increase, which would probably diminish development. Reuters (6/4)
　
　
</DIR></DIR>API: More regulation might boost costs, decrease supply: API senior policy adviser Richard Ranger says increased regulation of hydraulic fracturing through the Safe Water Drinking Act would probably increase costs of shale gas development and decrease drilling. Ranger cited an Energy Department study that said more regulation would add costs and reduce the natural gas supply. Houston Chronicle (6/3)

 

Re: Peak Oil; what it is and how it will impact your life

Another report on the governments attempt to raise the price of energy. I am beginning to think that they are doing this in a concerted effort to intentionally drive up the cost of fossil fuels in order to "wean" us off of them. The only problem with that is their pie-in-the-sky "alternatives" don't exist. And these warnings are not just coming from the energy sector ,the Congresional Budget Office is saying that their plans will drive the price of gasoline up 77 cents a gallon.


Gerard: CBO study shows climate bill's potential effects on oil consumers
API President Jack Gerard said Monday that the House climate-change bill, which includes a provision on emissions, would increase the cost of gasoline by 77 cents a gallon, according to the estimates in a Congressional Budget Office study. "The study confirms the bill discriminates against ordinary Americans who depend on cars, trucks, trains and airplanes," Gerard said in a statement. Bloomberg (6/8)
　
　
This is a very good article explaining the current energy situation, it's causes and what the effects will be. I think the only thing it leaves out is governments meddling which could drastically affect the markets and prices in a negative way.



Natural Gas Cheapest to Oil Since 1992 Signals Gain (Update2)

By Margot Habiby

June 8 (Bloomberg) -- This year’s 34 percent decline in natural gas made it the worst performing commodity and the cheapest next to oil since the fall of the Soviet Union. That’s about to change, if history is any guide.

Natural gas lost 73 percent in 11 months as the U.S. fell into the deepest recession in 50 years and drillers failed to idle rigs fast enough to control inventories. Stockpiles are 22 percent larger than the five-year average, the Energy Department said. Oil costs 18 times more than gas, the biggest gap since 1992, when the collapse of communism cut supplies from Russia, according to data compiled by Bloomberg.

Now, gas drillers are tightening their grip on production just as the economy shows signs of improving. The number of U.S. rigs plunged 56 percent in nine months, the steepest drop in two decades, Baker Hughes Inc. said. Gas may rise 38 percent in the second half, while oil will gain 22 percent, according to Bloomberg analyst surveys.

"The scope for gas to rally before the end of the year is bigger than for oil," said Ben P. Dell, an energy analyst with Bernstein Research in New York. "The gas market is playing out as expected. Supplies are getting drastically reduced because of falling rig counts, and demand is showing some signs of stabilization."

Gas for July delivery fell 13.7 cents, or 3.5 percent, to settle at $3.731 per million British thermal units at 2:59 p.m. on the New York Mercantile Exchange. Its drop this year is the most in the 24-member S&P GSCI Commodity Index.

Oil vs. Gas

Futures may rise this week, a Bloomberg News survey of 16 analysts showed. Oil cost 8.4 times more than gas on average during the past decade, according to data compiled by Bloomberg.

Prices are likely to climb to an average $6.50 per million Btu in the fourth quarter from an average $3.90 in the second, Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt, forecast last month. The price has averaged $3.766 so far this quarter and is up 10 percent in two weeks.

The number of U.S. gas rigs declined to 700 last week, the lowest since 2002, according to Houston-based Baker Hughes, the world’s third-largest oilfield-services supplier.

OPEC’s decision to cut production by 3.46 million barrels a day, or about 12 percent, helped crude rally as much as 58 percent through June 5, to an intraday high of $70.32 a barrel in New York. Today, crude fell 35 cents, or 0.5 percent, to settle at $68.09 a barrel.

The Organization of Petroleum Exporting Countries pumped close to capacity as the economy expanded and crude almost tripled between January 2007 and July 2008 to a record $147.27 on July 11. Natural gas followed, more than doubling to a 2008 high of $13.694 per million Btu on July 2.

Collapsing Demand

As the economy slowed, demand from factories and power plants, the users of 58 percent of all natural gas, declined. By April, prices touched a six-year low of $3.155.

"Fundamentals are holding gas down, and crude oil is trading less on fundamentals and more on consumer sentiment and perception," said Steven Schork, president of Schork Group Inc. of Villanova, Pennsylvania, an energy-trading consultant. "We have a disconnect between the two, and there is no expectation in the near term to see these two re-link."

Dell at Bernstein Research said gas needs to reach $7.50 to spur enough production to meet demand, known in the industry as the marginal cost of supply. He forecasts gas will more than double to $9 to $10 by the end of the year, while oil will rise to $70 or $80 a barrel from $68.44 as of June 5.

If he proves right, a speculator who bought 10 gas contracts and sold an equal number of crude futures would earn a return of about 46 percent.

Price Ratios

Dell’s fourth-quarter gas price would lower the ratio to about 8-to-1. The median estimate of analysts in the Bloomberg survey for $5.50 represents 11-to-1, based on the fourth-quarter forecasts at $61 a barrel.

Oil reached 18.1 times the price of gas on June 4, the highest since January 1992. The ratio fell to 8-to-1 by September that year as Hurricane Andrew halted daily output of 13 billion cubic feet of gas and the economy recovered from a recession. Today, the ratio widened to 18.2 to 1, the highest since July 1991.

Bill O’Grady, the chief markets strategist at St. Louis- based Confluence Investment Management LLC, an investment advisory and management firm, said the ratio may reach 20 to 1 or greater as natural gas inventories increase as do risks to oil supplies. Oil production in Nigeria, Africa’s biggest producer, fell to less than half the country’s capacity last month as fighting escalated in the Niger River delta.

"We have made tremendous strides in improving" the gas supply situation, he said. "When the technology improved to the point where you can capture shale gas, we found out we’ve got all kinds of supply here in the Lower 48."

Gas Shales

Gas producers started tapping so-called shale gas formations after technology to exploit the reserves was perfected in the 1990s. Gas in shale deposits is locked into nonporous rocks. Gas found in more traditional locations is often under enough pressure to rise to the surface on its own.

While home resale data and forecasts for a strengthening gross domestic product show the economy is stabilizing from the recession that started in December 2007, it’s premature to say the contraction is over, according to the National Bureau of Economic Research, which calls the nation’s financial cycles.

Gross domestic product estimated on a monthly basis "had a trough earlier this year, but it is way too early to say that it is a true trough rather than a pause in a longer decline," said Robert Hall, who heads the NBER’s Business Cycle Dating Committee.

Economists expect the economy to grow 0.5 percent in the next quarter and then expand further, according to 61 responses to a Bloomberg News survey.

Houston-based ConocoPhillips, the third-largest U.S. oil company, expects natural gas will rise to $6 to $8 as early as next year as demand recovers, said John Wright, president for gas and power marketing.

"I don’t think the levels that we’re at now will provide the supply needed to meet demand, and that says prices will go up from here," he said in a June 4 interview in Houston.

To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
Last Updated: June 8, 2009 16:04 EDT

 

Re: Peak Oil; what it is and how it will impact your life

It looks like there may be some sanity left in Washington. Or more likely a lot of CYA is coming out. The prostiticians are starting to see that playing politics with our energy needs and therfore our pocketbooks, and catering to the far left enviro wacko's is poilitical suicide.

All the forecasts are prediting that their meddling will cause drastic peaks in energy prices. They know that when people start paying higher gasoline and natural gas pices that they are going to feel the heat.

Let's hope more of them start getting the message.


Bill would reverse oil shale program revision
http://r.smartbrief.com/resp/qeoYsmAEvPhDypCicenTCicNjgms?format=standard
Colorado lawmaker wants to reverse Salazar's action on oil shale
　
Nick Snow
Washington Editor
WASHINGTON, DC, June 9 -- US Rep. Doug Lamborn (R-Colo.) has introduced a bill to restore the Bush administration’s oil shale programs and reverse US Interior Secretary Ken Salazar’s revision of them.
Salazar announced Feb. 25 that DOI would offer another round of oil shale research, development, and demonstration (RD&D) leases in Colorado and Utah. He withdrew a proposal for expanded offerings.

An earlier oil shale RD&D lease solicitation was withdrawn because it contained several flaws, Salazar said. On June 5, Lamborn introduced his bill, saying Salazar’s actions bring uncertainty to future oil sands research.
"Investors will not commit millions, or potentially billions, of dollars to the research and development needed to make oil shale a viable energy source unless they have a clear picture of the financial rewards and challenges associated with such an investment," Lamborn said.

His bill would direct Salazar to issue additional RD&D leases within 180 days of enactment using bids published on Jan. 15, effectively reversing the secretary’s Feb. 25 action.

Lamborn’s bill would make commercial oil shale regulation guidelines that DOI published in November permanent and apply them to all commercial leasing of federal oil shale holdings. It also would give the Interior secretary authority to provide incentives to producers by temporarily reducing royalties and fees.

"Oil shale could result in the addition of more than 1 trillion bbl of recoverable oil from lands in the western United States. This is too vital a resource to keep under lock and key," said Lamborn, ranking minority member of the House Natural Resources Committee’s Energy and Mineral Resources Subcommittee. "Secretary Salazar is dragging his feet with one of America’s most promising new energy sources. America needs to wean itself from foreign sources of energy once and for all."



　
Senate panel OKs bill that would reduce Florida's drilling buffer zone
The Senate Energy and Natural Resources Committee voted 13-10 Tuesday to allow drilling off the coast of Florida in the Gulf of Mexico. If the measure becomes law, Florida's buffer zone on drilling would be reduced to 45 miles, allowing domestic producers to get at trillions of cubic feet of natural gas and billions of barrels of oil, according to industry estimates. Reuters (6/9) , Houston Chronicle (6/9)


　

<DIR><DIR>Industry leaders balk at proposed new regulations on "fracking"
Industry leaders said Tuesday that regulating the technique of hydraulic fracturing under the Safe Drinking Water Act would put at risk development of trillions of cubic feet of natural gas. Lawmakers and environmentalists pressing for the regulation say "fracking" can introduce toxins and overly tap water supplies. The Wall Street Journal/Dow Jones Newswires (6/9)
　
　

</DIR></DIR>API: Production would drop 20.5% if "fracking" regulations are implemented: An API study estimates that oil and gas production would decline 20.5% over five years if lawmakers make hydraulic fracturing subject to regulation under the Safe Drinking Water Act. The study estimated that natural gas production would drop 22% and oil production 8%. Oil & Gas Journal (6/9)
　
　

 

Re: Peak Oil; what it is and how it will impact your life

More signs of sanity from the asylum.

GOP puts "all of the above" energy bill back on table
House Republicans on Wednesday introduced an alternative energy bill, one that takes an "all of the above" approach to resources that they say is more realistic than the Democratic carbon cap-and-trade plan. The key point in the Republican bill is to increase energy production through nuclear, increased drilling and clean coal, in addition to pursuit of renewable energy sources such as wind and solar. Oil & Gas Journal (6/10)


We have got to see to it that we get rid of this liberal dem majority next year or we're all screwed.

There are many who are still pushing this insanity.

<DIR><DIR>Gerard: Cap-and-trade would be "massively costly"
API President Jack Gerard says a Congressional Budget Office analysis estimating that the cap-and-trade energy bill would generate $846 billion in new taxes proves that the proposal would be "massively costly." "The $846 billion price tag on emission allowances, borne disproportionately by oil consumers, will drive up costs of producing and refining gasoline, diesel, and other fuel products while doing nothing to protect fuel consumers, including American families, trucking, the airlines, the construction industry, and many other businesses that rely on oil to make or transport products," he said. Oil & Gas Journal (6/10)
</DIR></DIR>Chevron CEO calls cap-and-trade plan complex, unrealistic
Chevron CEO David O'Reilly said at a conference Wednesday that a carbon tax would be less ambiguous than the cap-and-trade system Congress has proposed, which O'Reilly said would cause oil prices to be volatile. A goal to reduce emissions about 80% by 2050 is not realistic, O'Reilly said, because of the time it will take to replace infrastructure. Bloomberg (6/11) , Reuters (6/11)

 

Re: Peak Oil; what it is and how it will impact your life

California's broke but they don't want 100 million a year for drilling rights.
But watch who yells the loudest when gasoline gets back to $4 a gallon out there.

California Legislature turns down drilling royalties
California legislators dropped an offshore-drilling project from the budget bill they passed Friday, declining the $100 million annually in royalty payments it would have raised for the financially troubled state. Plains Exploration & Production was seeking a new lease to drill from an existing platform off Santa Barbara, where a 1969 spill boosted the environmental movement. Reuters (7/24)



Here's one for Ghrit.

Cabot steps up drilling at Marcellus Shale in Pennsylvania
Houston-based Cabot Oil & Gas reports it is producing 39 million cubic feet of gas per day from seven horizontal and 20 vertical wells in the Marcellus Shale field in northeastern Pennsylvania. The company is getting a ninth rig ready and plans to drill 18 more horizontal wells this year. Oil & Gas Journal (7/24)

 

Re: Peak Oil; what it is and how it will impact your life

Yeppers, that news hit here in the middle of a lot of interest. The question that came to me is just what the contribution to Teel 6 is from the Purcell formation. All the same, the IP is pretty good for a single vertical bore. I have not yet seen the curves to show fall off, but I hear the decline is slower than expected in the area. Teel 8H is a good hit, better than they expected.

There are not a lot of wells in production yet, mostly due to lack of pipelines. Teel 8H is pretty close to the TGP if I remember right.

The nearest one to me is the Ed Range well, about 5 miles line of sight. Southwestern is the driller, will like as not be the production company. I don't think it is in production yet, and I don't know why. Not all the info is readily available, takes a lot of digging.

Wouldn't I just LOVE to hear zero mention nat gas once as part of his plan? I'm gonna need the royalties to pay my health insurance.

 

Re: Peak Oil; what it is and how it will impact your life

We are not the only ones getting nervous in amongst the complacent.

http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html

 

Re: Peak Oil; what it is and how it will impact your life

awesome, well at least it isn't from a shortage from the ground, its as i always thought, its artificial at the hand of either the Gov or Oil CEO's.
One thing is for sure we are heading to the time I'm going to love, I hope you are ready to live by the gun, cause I damn sure ready to do it.

 

Re: Peak Oil; what it is and how it will impact your life

This has all the earmarks of a "friend of a friend told me" story. Several discrepancies in it.
Engineers work in the offices in Houston not in the fields.
Wells are capped not rigs.
The rig count has dropped like a rock since late last year. Worldwide.
The Gulf is one of the only places domestically that is still fairly active.
The price of oil is the same whether it comes from the Gulf of Mexico or the Persian Gulf. The only difference is in the production costs. OPEC oil is cheaper to produce so when the price does not sustain the higher costs of drilling and producing domestic oil the international oil companies shift focus to foriegn operations and start curtailing domestic production.

The current economic downturn has forced people to do what they would not do voluntarily, reduce fuel consumption. It takes time to ramp down production and that resulted in an oversupply of oil and natural gas.
That surplus will eventually draw down if the economy recovers.
If things get better sooner then it may result in a shortage that will drive prices higher. It takes time to ramp back up again.
We already import 70% of our oil supply (the majority coming from Canada and Mexico, not OPEC). A few more percentage points isn't going to have much of an impact.

The domestic producers will continue to produce domestic sources. As long as it is financially feasible to do so. There comes a time when prices get so low that it is not practicle to keep on producing some wells. A well is an ongoing expense. The expenditures don't stop once it is drilled. In that scenario wells are capped to await a time when the price increases enough to make it profitable to produce those wells again. It has nothing to do with "driving up the price".

Here are some recent news stories that will show that drilling and production continues in the Gulf and will do so as long as we can keep this administrations hands out of our domestic operations.

Republican lawmakers push for offshore drilling
House Republicans have called on Interior Secretary Ken Salazar to allow a proposed five-year offshore oil and natural gas leasing plan to proceed. In February, Salazar suspended the plan to gather more public comment and expand its scope to include renewable energy. "The proposed plan is appropriately expansive and provides maximum flexibility to properly utilize all of our country's resources," the lawmakers said in a letter to Salazar. Oil & Gas Journal (8/3)
　
Anadarko posts quarterly loss on lower energy prices
Anadarko Petroleum swung to a net loss of $226 million in the second quarter, citing weak energy prices. This comes in the wake of the natural gas producer's recent announcement of another deepwater find in the Gulf of Mexico. Houston Chronicle/Bloomberg (8/3)
　
Marathon raises cost estimate for Louisiana refinery expansion
Marathon said equipment constraints have pushed the cost of expanding its refinery in Garyville, La., to $3.7 billion, 10% over an earlier projection. However, the Houston-based company said the project remains on schedule to be finished by the end of the year. The expansion will increase capacity from 256,000 barrels of crude oil a day to 436,000 barrels a day. Houston Chronicle (8/3)
　
Chevron boosts production forecast: Chevron increased its production outlook for the year to 5% over 2008 levels, citing strong results in oil and natural gas ventures in the Gulf of Mexico and Nigeria. Full-year output will be about 2.66 million barrels of oil equivalent a day, up 30,000 barrels per day from the last estimate, said company executive George Kirkland. Chevron is also "very close" to obtaining environmental approval for its Gorgon natural gas project in Australia, Kirkland said. The Wall Street Journal/Dow Jones Newswires (7/31)
　
Auction of Gulf oil leases remains on tap for August
The Interior Department plans to move forward with next month's auction of oil leases in the Gulf of Mexico while it waits for a federal court to clarify whether the sale can proceed. Earlier this year, the court ordered the department to rewrite the leasing plan, saying environmental issues were not properly vetted by the Bush administration. The Washington Post/Reuters (7/16)
　
U.S. demand for petroleum drops to decade-low level
U.S. demand for petroleum products in the first half of the year dropped to a level not seen in more than 10 years, reports API. "It reflects an economy that clearly is struggling right now," says John C. Felmy, API's chief economist. "Demand is down, even though prices are significantly lower than they were a year ago." Oil & Gas Journal (7/16)