The real case for drilling is not one that any advocate (no matter how thinly veiled) of the oil companies will be willing to talk about.

Right now, the biggest oil producers are:

1. Saudi Arabia

2. Russia

3. U.S.

4. Iran

5. China

6. Mexico

7. Norway

8. Venesuala

9. Nigeria

10. Kuwait

and the countries with the greatest oil reserves are:

1. Saudi Arabia

2. Iran

3. Iraq

4. UAE

5. Kuwait

6. Venesuala

7. Russia

8. Libya

9. Nigeria

10. Mexico

11. Kazakhstan

12. Angola

In less than 10 years at current production, the U.S., Norway, and at least 30 other countries will have completely consumed their current known reserves (obviously this won't truly be the case because each of these countries is constantly reducing their production)... which will put ENORMOUS power in the hands of Saudi Arabia, Iran, Russia, China, Venesuala, and Nigeria... all of which we need to fear for various reasons.

If China decides they need to start siphoning oil off for a much larger-scale strategic petroleum reserve... or Iran gets pissed and reduces their production by 30%, or a terrorist blows open a major pipeline in Saudi Arabia... the price of oil could spike to 500+ dollars/barrel, and we are completely fucked.

The true case for tapping these supplies, ~11 billion barrels all told including ANWR, is national security.

The reason some oil industry shill won't tell you that is that the only way these resources work for national security is if they are tapped but not utilized: ready to pump in the case of a national emergency but controlled by the government and reserved ONLY for a national emergency.

The joke that we call a strategic petroleum reserve will offset our inports for about a month and a half. If we tap these resources but do not waste them, then we have a little more than a year's worth of genuine national security.

Of course, no-one from either party has the courage to lay out something like nationalizing oil reserves... no matter how logical. *shrug*

BTW, hydrogen is a complete farce if not a complete fraud. It's time we left that pipe dream behind where we left cold-fusion. Both are equally likely, which is to say not-at-all.

The People's Oil - That's what George Bush calls the oil in Iraq - and that's what we should call the oil left in the US. Most of what is left is beneath public land, which certainly makes it, indisputably, the people's oil. You said "Of course, no-one from either party has the courage to lay out something like nationalizing oil reserves... There is truly no need to nationalize it because it has been nationalized, by default, since the country was founded.

But there will still be no-one to advocate the U.S. government being in control of its production and distribution.

Then we will be giving in to burglary.

So we've got a huge public debt and a government which "owns" the rights to significant untapped reserves of a valuable needed resource. How about we (in a public sense) "sell" that resource (by charging royalties to whoever does the drilling, as the current prices will make paying those royalties still profitable) now that prices are quite high and use the proceeds to pay down the debt we've run up?

The combo of paying down our public debt and potentially reducing oil imports, which make up the bulk of our trade deficit would even start to re-strenghten the dollar which would bring down the prices we pay for oil in the long run.

Obviously this is a short-term fix (both for the debt and energy issues) in some ways, and would require an increased level of responsibility on the part of those who make our public spending decisions (and acceptance of that responsibility on the part of those who make the "hiring" decisions), and politically it could never be done by the current administration since some oil company would make money in the deal (which seems to rank just past what's going on in Darfur on the scale of unforgivablility in the minds of their political opponents).

Let's say you invest in a commodity, and that commodity is increasing in value by ~25%/year. What argument could you possibly have to sell it all off as quickly as possible? Why wouldn't you hold onto it and wait until it was more valuable.

Oil averaged ~25%/year between 1998 and 2007, and it's grown more than 5%/MONTH in the last 16 months... Why sell now?

Why does everyone want to sell our oil off down to the last drop so that we are completely and utterly dependent on foreign entities that don't like us very much?!

"Why does everyone want to sell our oil off down to the last drop so that we are completely and utterly dependent on foreign entities that don't like us very much?!"

That is an excellent question to ponder. If peak oil is here, and we have supposedly vast resources in the OCS, perhaps it makes sense to leave it there for a "rainy day". But isn't the OCS defined as 50 to 200 miles off shore, and doesn't that make it international waters? Aren't the Chinese, clamoring to drill in the OCS between Florida and Cuba? I've gotta stay away from those peak oil sites, I'm getting paranoid.

If there are large reserves that are known and untapped, then by definition our arrival at "peak oil" is by deliberate choice rather than the result of our having reached the limits of actual existing reserves as the malthusians would like everyone to believe.

Peak Oil is described as the time when the supply rate which is the highest that will ever be achieved is reached. It doesn't depend on the size of reserves. It was noticed that, for US domestic oil extraction, Peak Oil occurred when half of the reserve had been extracted. It has somehow been assumed that that is some sort of model to be applied to the world's supply. In fact, there is no analytic connection between the two.

I'm not saying that sucking our owm oil reserves dry is necessarily the best path, but it would provide an avenue to address the combined issues of a degree of public debt which limits options when it comes to dealing with economic issues (and nobody with any authority seems inclined to consider the more responsible ways of dealing with it) and dependence on foreign energy imports, especially if the remaining reserves would be considered public property.

While oil price growth will doubtless contine as a long term trend, there is currently a premium added by speculation (another "bubble" if you will) which will eventually deflate like any other. In Feb 2000, Cisco stock had increased in price by 700% over the previous 2 years, and many people thought those who were selling their shares were crazy, but I'd bet that anyone who held it for another year wasn't exactly proud of their judgement in doing so. I know there are many many flaws with that analogy, and it's highly unlikely that oil will ever fall all the way back to $20/barrel until petroleum products are no longer widely used, but my central point is just that the assumption that the current trend will continue indefinitely is spurious and frequently disproven throughout history.

Besides, if we never extract it then it doesn't matter if crude goes to $10M/barrel, reserves we're comitted to never tap will never be worth more than the value of the real estate they lie underneath, and will never reduce our dependence on foreign imports which satisfy demand for something which is usable right now.

Also since it's inevitable that we will someday replace most or all fossil fuel use with whatever comes next (as electricity replaced candles and kerosene lamps), then keeping those reserves untapped forever means they will eventually lose much of their current value.

If the rate of production is decided more by government policy than by the availability of reserves to extract, then whether or not "Peak Oil" is reached will always be a matter of deliberate choice, not a result of happenstance or of unalterable objective facts.

Obviously oil is a finite resource, and there is a theoretical point at which a natural peak oil situation would be reached, but as long as drilling is restricted by anything but lack of natural reserves then we won't really be at that point.

tundra:

#1-#2 supplier to the US and the second largest reserve of oil if you believe Saudi Arabia is #1. Any reason you have left them off the list?

I was looking at conventional oil, not tar sands.

Tar sands production cannot be scaled up quickly, nor can it be scaled up to more than double its current production - which is only a few million barrels/day.

I guess I feel that would be the same as if someone placed the U.S. at the top of the list because of all the kerogen trapped in shale deposits in Utah... It isn't oil, and though it will work to replace some of the oil supply... scale up isn't as simple as drilling another well.

Not U.S. suppliers. Canada would be between Norway and Venesuala, not number 2.

In a completely fungible market, who traditionally sells to whom wouldn't matter at all if there was a sudden supply crimp (which warrented tapping the SPR).

tundra:

Tar Sands are conventional supplies of oil and Canada is the #2 supplier, and often times the #1 supplier, to the US. What wasn't conventional as late as 5 years ago is very much conventional today. They have the 2nd largest supply of oil after Saudi Arabia if you believe the numbered reserves for Saudi Arabia.

The Canadian Production is already scaled up and China and France are investing heavily in them while we sit on our hands. That they supply a large portion of the US's thirst for oil is significant. That oil/barrel has zoomed over $100/barrel will certainly bring on line more oil from tar sands sooner. I think you are being too conservative in your approach to the outlook.