<GCC: House Committee OKs New Refinery Legislation The Oil Drum Two short items to note>

88 comments on And it begins...the government says (more deeply this time, and with feeling): 'CONSERVE!'

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LeGorfou on October 3, 2005 - 3:31am Permalink | Subthread | Comments top
The lost rigs and platforms can never be replaced, not with an existing backlog already extending to 2009. Oil and gas fields, which were close to the end of their useful life but that, were producing some oil or gas will anyway simply not be worth redrilling if the wellheads are damaged.
"Supply will be up and prices will come down in six months" will join "Yes, I'll respect you in the morning" as a meaningless promise.
Soon, as a temporary fix of course, look for a 55mph limit on highways and solar hot water to be re-installed on the White House roof.
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Davidh on October 3, 2005 - 4:09am Permalink | Subthread | Parent | Comments top
Do you think the combination of hurricanes (damage/destruction of drilling/producing equip), peak oil (increasing prices, but also increasing scarcity/production costs) and a society certainly in decline (maybe not in totally collapse) could actually prevent "us" from extracting a decently significant part of the deep water oil in GOMEX? While there is no doubt people would drill for some near-the-surface light crude on land, going deep water might end up being impossible before too long? Or just financially unsound?
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baloghblog on October 3, 2005 - 7:51am Permalink | Subthread | Parent | Comments top
"Supply will be up and prices will come down in six months" will join "Yes, I'll respect you in the morning" as a meaningless promise.

This should be the quote of the day!

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TJ on October 3, 2005 - 9:01am Permalink | Subthread | Parent | Comments top
Also, anything that's older than about ten years probably has a book value close to the salvage value.  That means any replacement will be treated by the corporations as a new investment.  There will be a big temptation to just take whatever insurance money and run.
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wkwillis on October 3, 2005 - 2:58pm Permalink | Subthread | Parent | Comments top
Not really. In World War Two the price of used cars zoomed (even with gas rationing) because they stopped building new ones and converted to war production.
The value of the oil rigs is greater than the insurance because the insurance was written when the price of oil was much lower than it is now, and rigs are far more valuable when the oil is more valuable.
The only way the value of the rigs would go down is if the oil companies expected that the price of oil would go down in the future, when the oil would be produced by the oil rigs. IE, that the oil company executives do not believe in peak oil.
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88 comments on And it begins...the government says (more deeply this time, and with feeling): 'CONSERVE!'

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