Breaking: Man paid by oil companies says no rush on alternative fuels

I'll take incredibly unpersuasive and irresponsible op-eds for $1,000 please, Alex.

I wish the New York Times elaborated a bit on "energy consultant" as this Michael Lynch guy's title. He's not an MIT professor whom policy-makers consult on energy matters, he's a professional consultant to energy companies.

I'm not a hardcore "peak oil" guy, and I was hoping to be reassured by this flack's arguments against it, but they're laughably thin. Basically, technological wizardry is going to come up with a way to cost-effectively access the unconventional oil plays that producers have had to resort to, so $30 a barrel oil will be back to stay soon. Not buying it.

The last graf makes abundantly clear what this guy's motives are, too. Rather than focusing on his theoretical point (i.e. Peak oil is bunk), he tells us the country can't afford any more alternative energy "schemes," what with the recession and all:

This is not to say that we shouldn’t keep looking for other cost-effective, low-pollution energy sources — why not broaden our options? But we can’t let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times.

Oh he's an "energy consultant," all right. The API pays good money for credentialed academics to write stuff like this.

My but he is limber

Good. This whole argument about offshore drilling is ridiculous, so don't even let McCain use it as an issue.

Obama's basically saying to the American electorate: "Look, I've seen the polling. I realize you've been sold on this stupid idea. So fine, if it makes you happy, I promise I'll give it a serious look."

This is small potatoes. The oil companies already have plenty of relatively promising prospects that could be developed profitably at these oil prices. What's preventing them from drilling everywhere one might reasonably expect to find oil isn't regulation as much as the scarcity of rigs. More are being built, but for the forseeable future they are extremely costly. The basic ones run about $80,000/day and the more sophisticated (deep water) ones run about $400,000/day.

Here's a chart of rig dayrates going back to '05 (by which time they had already gone up a lot). You can still see the dramatic increase in the last 3 years:


That's utilization on the right axis of the graph, and you can see the red line steady around 100%. If the areas off Florida were especially promising, you could make the argument that the highest use of the rigs was being prevented by federal regulation. But the most active markets right now aren't near the US Gulf. The're in places like the Indian Ocean, offshore Brazil, the North Sea, West Africa... and of course the Middle East. That's where the really big projects are. It's not like producers are going to suddenly swarm en masse to the U.S. when the restrictions are lifted, just because it will make Bob in Toledo feel more "energy secure."

So go forth and pander, BO. Do what you gotta do. It's a completely phony issue.


Chart via Energy Current