Shortage of Oil and Drilling Equipment Another Wrinkle in Foreign Dependence on Oil
Lost in the hoopla about renewed calls to drill ANWAR is the fact that there is a shortage of oil rigs, ships and other assorted resources to extract that oil even if it were enough to make a difference in our gas prices….
As President Bush calls for repealing a ban on drilling off most of the coast of the United States, a shortage of ships used for deep-water offshore drilling promises to impede any rapid turnaround in oil exploration and supply.
What is striking is that this is yet another economic reason to wean ourselves from oil ASAP - more of our dollars headed overseas to enrich other nations to support our energy habit. When South Korean companies are putting $100 MM premiums on deepwater drilling ships - that shows up in our cost of energy - further strengthening the viscious cycle of deficit spending with regard to oil… This isn’t moving deck chairs around on the Titanic folks, this is selling the lifeboats to buy ice cubes…
Well-stated. I recently articulated the same argument: “Further complicating the supply equation is finding a shipyard with idle capacity to build new deepwater rigs.”
The Question: If there are no rigs availabile, might discussions about opening up more of the U.S. outer continental shelf to offshore drilling prove to be moot?
http://industry.bnet.com/energy/2008/08/04/rig-demand-driving-profit-at-ensco-intl/
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Mark Langner replied on August 19, 2008 2:55 pm:
Well its certain that opening those locations will have no impact on current or even short term (meaning less than 5-10 years) supply - so using the argument of augmenting supply as reason for allowing the drilling is specious. The bigger question is what we should do longer term.
Oil proponents are quick to point out that we can’t shift to renewables overnight - but a 5-10 year timeframe gets into “not overnight” territory - provided we start moving. It may very well be strategically (though unlikely environmentally) sound to consider adding more drilling in the future - but that path only makes sense if its part of an overall shift away from the oil - which isn’t likely given the short term thinking of the policy makers on this issue.
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