Pipe Dreams Set to Become Reality

C'mon, now oilcompanyhaters, shouldn't Venoco just have been forced to stop producing oil?

I am not going to ask them to stop producing...not at least until the oil companies take their hands off the throat of government and regulations...otherwise they will just squeeze harder. Besides, I cannot afford an electric car yet...waiting for the wires to be installed under the freeway for smaller batteries and long distance travel.

Hmmm...the oil companies take their hand off the throat of government? I know, I know - it's all a big dark conspiracy. The fact that most transporation and many products that EVERYONE consumes require oil has absolutely nothing to do with it. If only the government could regain its throat, it could cut the price of oil, thus ensuring much higher demand and an even earlier exhaustion of supplies.

Wires under the freeway? Now THAT is a truly breathtaking construction project. Wonder how much that would cost. More to the point, what would it accomplish? Magical recharging of batteries while driving? Little metal strips on the bottoms of cars that would contact the wires?

Yes, the oil companies with huge profits get govt. subsidies. Renewable does not

Talk about "socialism".

Ah John Locke, you know that Venoco produces oil from publically owned resources i.e., State Tidelands Oil, just as ExxonMobil, PXP, and POOI produce the publically owned oil. That oil belongs to you and me and everyone else, but we allow these companies to make an obscene profit to take it out of the formations under the sea and sell it back to us. What a racket. In Norway, the public never loses ownership of their resources. That is a better way. The oil companies fight every attempt by the public to regulate their behavior. They hire consultants to lobby the state and local agency boards that have been established to regulated them, they fight every restrictive condition on every permit. The irony is that they are producing our oil.

Yes, and the companies pay big bucks for the leases and drilling rights on these properties - where do ya suppose that money goes?

Norway's way sounds interesting, but simply regulating and taxing properly would go a long way to help here. For example, California could levy an extraction tax like every other oil-producing state does. So tell me, why in a state governed by the Left, are the oil companies paying no extraction tax?

Our governments at all levels are mostly populated by venal, incompetent fools, owned by the highest bidders, whether corporate or union, and more interested in preserving their elected position, or salary and pension, than in governing properly. That's why I have no faith in government solutions. Hell, they can't even spin off a function properly. Look at the Post Office - responsible for itself, but can't set its own prices, must provide free postage to Reps and Sens, and governed by Civil Service labor rules. Now why do you suppose the USPS was spun off that way? Hint: it was not with any concern for their future economic viability. No wonder they're bankrupt.

tabatha,

You claimed: "Yes, the oil companies with huge profits get govt. subsidies. Renewable does not"

Do me a favor. Google "renewable energy subsidies." Tell me what you find out. Count all of the state, federal, and local subsidies you find.

Then check Wilipedia's entry. It says: "In the US, the federal government has paid US$74 billion for energy subsidies to support R&D for nuclear power ($50 billion) and fossil fuels ($24 billion) from 1973 to 2003. During this same timeframe, renewable energy technologies and energy efficiency received a total of US$26 billion."

Would you agree that your comment was false?

Extra credit if you can name for me these energy subsidies. What are they for? Can you even define what a subsidy is?

Obviously, you haven't considered a solar installation for your home, and haven't considered buying a hybrid or electric car. Had you done either of those things, you would have seen that both are subsidized: you would have qualified for cash back. What this tells me is that you aren't willing to make any personal commitment to reduce fossil fuel consumption.

Eckermann,

Are you suggesting that someone should produce that oil for you free of charge? It takes a huge amount of capital and expertise to get it from under the ocean to your car, and it's very risky. I could make all the same charges you just did for copper, coal, and a number of other extractive industries. That copper in Utah belongs to you. So why shouldn't you get it for free? This is like whining about the auto mechanic fixing your car and then charging you for the service. What a racket! It's your car!

What value does a mineral in the ground have if no one has the expertise or capital to bring it to you? It's really worthless isn't it? It has no value at all until someone can figure out how to bring it to market. So someone develops this expertise through years of training, and is able to raise the capital and assume the risk of a dry hole to bring it to you, and you criticize him for wanting to make a profit on it. Does your company make a profit? Why don't you give your expertise away for free? I suggest you go to your CEO tomorrow and tell him that he should aim for zero profit on his investment this year.

As for "obscene profits," I'd expect that any industry that was able to set its prices at will and made obscene profits should have a pretty high p/e ratio, wouldn't you? Why not go to this page, which shows a listing of over 200 industries and their 2010 profitability performance:

http://biz.yahoo.com/p/sum_peed.html

Tell us where "Major Integrated Oil & Gas" ranks. Then where it ranks in "Profit Margin." Then where it ranks on "Return on Equity." I don't think you know the difference between a profit and a profit margin, do you?

Then you say "In Norway, the public never loses ownership of their resources."

False. Many multinational oil companies operate in Norway. While the Norwegian government does have a relatively large stake in its oil industry through its operating arm Statoil, its industry is not nationalized. Considering all of the nations where oil is produced, very few have completely nationalized industries.

Your view of industry economics is really quite naive, as if you believe oil companies are like some evil organization out of a James Bond movie. Proceeds from produced oil does not just go straight into CEO wallets. Oil companies must buy the leases (these leases generate billions per year, typically). They pay royalties of 20% or so straight off revenue to the feds. They pay state and federal income taxes and sales taxes. They pay employees, who in turn pay taxes and then reinject their income into local economies. They buy goods and services from other companies. Exxon, for example, made a profit of $31 billion last year. You think that's obscene. But their cost of goods sold was $234 billion: how many jobs do you think that supports?

But maybe I'm wrong about you.
Please list your years of industry experience here ----> _____
And your relevant technical degrees here ----> ____

Sadly there is a whole lot more to this story than is presented here. Venoco proposed a plan that could have used their existing platform Holly to drill new wells that would have reduced long existing seepage of oil and gas from the Ellwood oil field. There was an opportunity to move the existing onshore treatment plant from it's present location close to neighborhoods in Goleta to the Exxon facility in rural Gaviota. The oil could have traveled along the seabed where it would not be subject to the threat from impacts that an onshore pipeline will be. The County would have collected more revenue, air pollution and beach tar greatly reduced, threat of oil spills reduced, and a dangerous oil facility removed from proximity to Goleta homes. Yet EDC, GOO, CPA, and others killed this proposal. It is a shame when hatred of all thing oil clouds good judgement.

I'm more interested in swimmer 's industry experience and technical degrees. I have none. Having been born here, I have experienced oil and tar on the beach, in the water, breathed the fumes in the air, in fact why is it that you can walk the beach in summerland and get a headache from the smell of oil fumes? Is that natural? If oil companies are so industrious, they should be finding ways to use this 'natural' seepage. I mean, all that lobbying has paid off. They made more profits than any business in the history of the world this year and they continue to receive subsidies while the country is in a 'recession'. Think of all that money they could have made had they not spilled all that stuff into the gulf of mexico. They figured out how to extract it from tar sands in Canada.... but they still use 1970's technology to clean up. Bounty towels have even gotten stronger since then.

Much of what swimmer mentions are basic finance and economics, which should be understood by anyone presuming to criticize our free enterprise (or any other economic) system - unfortunately such is not the case. Much easier to confuse profit with profit margin and rage incontinently against the obscene profits of whatever one's target is.

I grew up on the beach, too, although not in SB and many decades ago. Got tar on my feet at the beach on occasion. Cleaned my feet and moved on. Big deal.

Solutions have been proposed. The environazis propose cessation of oil prduction which, of course, would lead to MORE seepage; funny how the findings of our own UCSB regarding the reduction of seepage are ignored by that crowd. The proposals to reduce seepage, consisteny with the findings from UCSB, have come from the oil companies which, as any good Santa Barbarian knows, are the progeny of Satan and not to be trusted - their proposals, therefore, are not considered in any rational way and are rejected.

Spacey,

Why do I need to defend myself and post my resume? I'm not declaring anyone guilty of anything. You are. If you're bringing charges, you ought to have a case. You don't. But that doesn't stop you from airing your prejudices for the world to see. It's almost as if you're proud of your economic illiteracy.

" in fact why is it that you can walk the beach in summerland and get a headache from the smell of oil fumes? Is that natural?"

Yes. The tar was used by Chumash Indian to caulk their boats. Seeps were reported in Juan Cabrillo's logs. Seeps can be observed on the ocean floor on camera and by seismic detection equipment. Seeps can be observed coming out of rock at Carpinteria Beach. Seeps were known before there was any production in the Santa Barbara area. How do you think many of the early oil fields were found?

"If oil companies are so industrious, they should be finding ways to use this 'natural' seepage."

They are. In the 1980's Arco installed large pyramid structures capping some seeps in the Coal Oil Point area. You place natural in quotes as if you don't believe there is natural seepage. How ignorant. Why don't you check all this stuff out before making thinly veiled and snarky accusations? Go to the UCSB geology department, you know, that hotbed of conservatism, and ask them if they believe natural seeps are plentiful. Go ahead and do it.

"I mean, all that lobbying has paid off."

How do you figure? As far as I know, the Santa Barbara Channel is still closed to exploratory drilling. Do you have new information? I guess your position is that the oil industry is the most powerful force in the universe... except for the California Coastal Commission.

Top 10 industries by lobbying expenditures, 1998-2011:
Pharmaceuticals/Health Products: $2,204,027,124
Insurance: $1,577,725,579
Electric Utilities: $1,487,339,178
Business Associations: $1,232,513,899
Computers/Internet: $1,206,517,827
Oil & Gas: $1,150,840,111
Misc Manufacturing & Distributing: $1,010,365,149
Education: $1,002,954,368
Hospitals/Nursing Homes: $947,933,537
Civil Servants/Public Officials: $910,330,244

www.opensecrets.org

Let's hear your rant against insurance and internet companies too OK? And those teachers and nursing homes! They are spending well over 80% of what the oil industry is spending! I mean, I wonder how politicians give every lobbyist everything they ask for!?

(cont.)

"They made more profits than any business in the history of the world this year"

http://biz.yahoo.com/p/sum_peed.html

This gives profit rank by industry for 2010.
"Major Oil and Gas Integrated" (i.e. Big Oil) ranks:
#166 out of 215 in p/e ratio
#112 out of 215 in profit margin (income divided by revenue)
#94 out of 215 in return on equity

In terms of absolute profit, AT&T made more than all but one of the nation's 14,000 oil companies. Microsoft, Walmart, IBM, Apple, Johnson & Johnson, Berkshire Hathaway, Procter & Gamble, Wells Fargo, Coca-Cola, General Electric, and Intel made more than all but two oil companies. Do you hate these companies too? What industry are you in?

Your comment shows that you don't know the difference between a profit and a profit margin. A pretty impressive thinker you are, Spacey.

"and they continue to receive subsidies while the country is in a 'recession'."

Define for me 1) what a subsidy is, in your words, and 2) what amount in subsidies the energy industry receives in absolute terms, and then as a percentage of capital investment.

You have no idea. You're just throwing out a slogan here. You read it somewhere and it fits with your ideology.

"Think of all that money they could have made had they not spilled all that stuff into the gulf of mexico."

Sure. But your point? That the industry should have decided to sell the oil instead of spill it? This is the general idea, Spacey. What a silly non-sequitur of a comment.

"They figured out how to extract it from tar sands in Canada.... but they still use 1970's technology to clean up."

This is the only point you make that has some merit, although 1970's technology is a bit of a stretch. BP was guilty of complacency, I believe, but it was surely not an intentional or malicious event. Since BP was at fault, you believe all the other 13,999 oil companies in the US are also guilty. Do you make similarly sweeping hostile claims against the airline industry whenever a plane crashes?

Also, this is another mindless variation on the theme "We can put a man on the moon, so why can't we....?" As if all engineering challenges are equal. As if a few dollars can solve any problem. I wonder if you've ever considered why we have no cure for cancer or the common cold? After all, we've figured out how to produce oil from tar sands.

I would be embarrassed posting such easily refuted and unsupported nonsense as you do. Why do you bother?