The Oil Drum

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

Comments can no longer be added to this story.

LeGorfou on October 3, 2005 - 2:31am

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.

Comments can no longer be added to this story.

Davidh on October 3, 2005 - 3:09am

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?

Comments can no longer be added to this story.

baloghblog on October 3, 2005 - 6:51am

"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!

Comments can no longer be added to this story.

TJ on October 3, 2005 - 8:01am

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.

Comments can no longer be added to this story.

wkwillis on October 3, 2005 - 1:58pm

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.