OTHER OPINIONS : Keep on drilling
Posted: October 12, 2009 at 6:07 a.m.
BATON ROUGE — On: Windfall profits.
Remember the cries for a hefty tax on the “windfall profits” of the major oil companies?
As it turns out, the companies were using that money constructively, exploring for new oil supplies in a world that continues - despite efforts to diversify energy sources - to need large quantities of hydrocarbon fuels.
New oil discoveries have totaled about 10 billion barrels in the first half of the year, according to IHS Cambridge Energy Research Associates. The New York Times reported that if discoveries continue at that pace through year-end, they are likely to reach the highest level since 2000.
“That’s the wonderful thing about price signals in a free market - it puts people in a better position to take more exploration risk,” James T. Hackett, Anadarko’s chief executive, said in The New York Times.
Anadarko has a significant new find in Sierra Leone, but one does not need to go as far as Africa to see the fruits of exploration expenditures by major oil companies. BP says it’s got a huge field to drill under the Gulf of Mexico.
BP estimated that the Tiber field holds 4 billion to 6 billion barrels of oil and gas. That’s not as big as some of the giant finds of the 1970s, such as in Prudhoe Bay in Alaska, but it’s still a lot.
“In 30 years I’ve been in the business, the Gulf of Mexico has been called the Dead Sea countless times,” Bobby Ryan, vice president of global exploration at Chevron, told The New York Times. “And yet it continues to revitalize itself.”
But that oil won’t be found unless oil companies have the resources to find it. Nor should the U.S. government procrastinate about opening up more offshore regions for exploration.
We strongly support research and development of alternative forms of energy - solar, nuclear, wind. But oil and gas remain essential elements of the world economy.
Opinion, Pages 6 on 10/12/2009
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