Oilsands is very profitable. The actual cost is around 70$ a barrel for production.
Keep in mind Saudi oil is $5. a barrel.
Local representatives have a large sway in American politics. Senators and congressmen in Florida and California have a hard getting elected when they talk about oil. The whitehouse can't control that.
http://www.instituteforenergyresearch.org/2008/05/13/top-five-actions-your-federal-government-can-take-to-lower-energy-prices/Top Five Actions Your Federal Government Can Take to Lower Energy Prices
Congress Must Face the Law of Supply and Demand. Oil, gasoline, fuel oil, and heating oil and diesel fuel commodities traded in the world market and, therefore, their prices reflect the fundamentals economic principals of supply and demand. While much has been done to reduce demand for energy (CAFE, energy efficiency requirements in buildings, etc.) and US energy intensity has declined significantly, Congress has failed to increase domestic supplies of petroleum resources in Alaska and the Outer Continental Shelf (OCS), and has refused to provide authority to the Department of Interior to issue leases for the development of unconventional sources such as shale oil. In fact, it has restricted access to known supplies of domestic petroleum resources.
The Top Five Steps Your Federal Government Can Take to Increase Supplies and Lower Prices:
1. Lift the Presidential and Congressional moratoria on deepwater outer-continental shelf (OCS) energy exploration and production. The US is the only developed country in the world that restricts access to its offshore resources. Currently, 97% of America’s 2 billion acres of OCS are not being used for their energy potential. The U.S. Minerals Management Service (MMS) estimates that the outer continental shelf contains nearly 86 billion barrels of oil and 420 trillion cubic feet of natural gas. (The U.S. consumes roughly 7.5 billion barrels of oil and 23 trillion cubic feet of natural gas annually) The MMS estimates are conservative due to the fact that “true knowledge of the actual volume of oil and natural gas resources can only come through the drilling of wells,” and in many places in the US, exploratory wells have not been allowed to be drilled. Simply put, the government does not know exactly how much energy lies beneath the OCS because it has been illegal to look.According to MMS, it has been more than twenty years since any exploration activity has been conducted on the Alaska and Atlantic OCS, and “no meaningful” exploration offshore Central and Northern California, offshore Oregon and Washington and the South Florida Basin, has been conducted since the 1960’s.
2. Repeal the Congressional prohibition precluding the production of oil shale leases on taxpayer-owned federal lands.As part of the Energy Policy Act of 2005, Congress directed the U.S. Secretary of Interior to develop a program to enable the production of America’s oil shale resources - the largest oil supply in the world – for American consumers.The United States has 2 trillion barrels of oil shale. This is more than 7 the amount of crude oil reserves found in Saudi Arabia, and is enough to meet current U.S. demand for over 250 years. According to the U.S Department of Energy (DOE):
“Once developed, U.S. oil shale resources will be similar in extent and energy potential to Alberta’s tar sand reserves. When oil shale and tar sands are considered together, the United States and Canada will be able to claim the largest oil reserves in the world.”However, in 2007, Congress adopted a rider that prohibited the Department of Interior from completing the task it was assigned in 2005. Consequently, the United States is still without a program to bring this massive resource to market for American consumers.
3. Open the “1002 Area” of the Arctic National Wildlife Refuge (ANWR) for oil and natural gas development. In 1980, President Jimmy Carter and the Congress set aside 1.5 million of ANWR’s 19 million acres for potential oil development, subject to Congressional approval. This area is often called the “1002 Area” because it was set aside in Section 1002 of the law. It is located on Alaska’s Northern Coastal Plain. According to U.S. government estimates, the mean estimate of the oil beneath ANWR’s northern coastal plain is 10.4 billion barrels, or, nearly half of the total proven reserves of the entire United States. At peak production, ANWR could produce approximately 1 million barrels of oil per day, which is roughly equal to the amount the entire state of Texas produces each day, and about as much as we currently import from Nigeria. Moreover, the Congressional Research Service (CRS) recently estimated that ANWR energy production would generate about $180 billion in federal tax and royalty revenue.If approved by Congress, ANWR would be the single largest producing oil field in America and the entire Northern Hemisphere.
4. Appoint the U.S. Commission on North American Energy Freedom as mandated by the Energy Policy Act of 2005 (Sections 1421-1424). As part of the federal government’s national energy policy, Congress established the 16-member Commission on North American Energy Security, and directed the President to appoint representatives from the United States. The President has failed to do so. North America’s energy resource base is enormous. It includes the world’s largest oil shale deposits, the world’s largest coal deposits, and the world’s largest oil sands reserves. Combined, these resources are sufficient to power North America for centuries, giving us plenty of time to transition to new energy sources as they become affordable. Meanwhile, all of North America would benefit from more indigenous energy production. A coordinated effort between the United States, Canada and Mexico – as envisioned by the law – would facilitate the development of a comprehensive North American energy policy that seeks to achieve energy self-sufficiency by 2025 within the three contiguous North American nation areas of Canada, Mexico, and the United States.
5. Repeal Section 526 of the Energy Independence and Security Act of 2007 which prohibits federal contracting for “nonconventional” sources of petroleum. Section 526 of the Energy Independence and Security Act of 2007 prohibited U.S. federal agencies from contracting to procure non-conventional or alternative fuels that may emit higher levels of greenhouse gas emissions than ‘conventional petroleum sources.’ Investment in non-conventional fuels will play a critical role in reducing America’s dependence on foreign sources of energy. Advanced fuel technologies, including coal-to-liquids, natural gas-to-liquids, fuel from oil shale, an fuel from Canadian tar sands are specifically targeted by Section 526. Strategically, Section 526 was especially unwise, given America’s massive coal and oil shale resources, and the fact that Canada is America’s largest supplier of imported oil. Arbitrarily preventing the U.S. Government from procuring advanced non-conventional fuels could have negative impacts on the military, and therefore, our security. In the event of a national emergency, the U.S. military could be forced to obtain a greater percentage of petroleum from unstable regions of the world.
http://epw.senate.gov/public/index.cfm?FuseAction=Minority.Blogs&ContentRecord_id=5bd920d2-802a-23ad-4c9e-42e22ddc8680&Issue_id=Democrats' Attempt to Shut Down Energy Debate Fails
Inhofe Says It's Time For the Senate To Get to Work On Lowering Gas Prices
Get the Facts on Energy and Gas Prices
WASHINGTON, DC - Sen. James Inhofe (R-Okla.), Ranking Member of the Environment and Public Works Committee, today voted against a motion to proceed to final passage of S. 3268, the Energy Speculation Bill saying that he will work with his Republican colleagues to ensure the Senate works to provide real and meaningful solutions to rising energy costs. Senate Democratic leadership had attempted to block all Senators from offering any amendments to the bill.
"Today's vote shows that Republicans are willing to stand up and fight to ensure the Senate stays focused on providing solutions to rising energy prices," Senator Inhofe said. "When Democrats allow the Senate to reopen for business on the issue of bringing down energy costs, I am ready to put forward amendments to encourage the development of natural gas vehicles, prolong the feasibility and production from our marginal oil and gas wells, address the market distorting subsidization of fuels in other countries, and repeal federal prohibitions on importing fuels from the Canadian oil sands.
"Republicans in the Senate are serious about providing solutions to rising energy costs. I will continue to stand with my Republican colleagues to ensure the Senate holds a fair and open debate on the need to increase energy supplies. I believe a large majority of Senators will vote in favor of amendments to open responsible access to America's plentiful energy resources. Democratic leadership knows this as well. That's why they're blocking a full and open debate."
Background Information:
Amendments on S. 3268
The Drive America on Natural Gas Act - This amendment (S. Amdt. 5177) encourages auto manufacturers to produce bi-fuel vehicles, streamlines EPA's emissions certifications, and establishes a natural gas vehicle research program. It promotes the use of a proven alternative fuel and sends a market signal to manufacturers to consider compressed natural gas as a cost competitive alternative. Natural gas is domestic, plentiful, affordable, and clean. The promise of natural gas as a mainstream transportation fuel is achievable today -- not 15 or 20 years from now.
The Marginal Well Production Preservation and Enhancement Act - This amendment (S. Amdt. 5178) streamlines and clarifies government regulations, prolongs economic feasibility, and enhances production volumes from the nation's 719,000 marginal wells. In 2006, marginal wells produced more than 335 million barrels of oil. That's equivalent to more than 61 percent of the oil we currently import from Saudi Arabia. In my own state of Oklahoma, it is the small independents, basically mom-and-pop operations, producing the majority of oil and natural gas, with 85 percent of Oklahoma's oil coming from marginal wells. These statistics testify to the importance of America's marginal well production. With gasoline prices at record highs, Congress must ensure that government policies don't discourage and instead prolong and enhance production from these low volume wells.
The Foreign Removal and Elimination of Energy Subsidies Act - This amendment (S. Amdt. 5176) addresses the global market distorting subsidization of fuels in other countries. While the current national average of gasoline is $4.02 here at home, in China it's just $2.84 per gallon, in Indonesia it's $2.44, in Mexico it's $2.65, and in Venezuela it's just 20 cents per gallon. While demand for gasoline has dropped more than 3 percent in the U.S., worldwide demand continues to increase despite record high prices for oil. This increased demand is largely due to the market distorting policies of foreign government. My legislation implements an aggressive U.S. foreign policy to investigate and engage foreign governments subsidize the price of their fuels.
Repeal of Section 526 - This amendment (S. Amdt. 5175), offered with Senator Domenici, repeals Section 526 of the Energy Independence and Security Act of 2007. Less than three years ago, in Section 369 of the Energy Policy Act of 2005 (P.L. 109-58), Congress found that "United States oil shale, tar sands, and other unconventional fuels are strategically important domestic resources that should be developed to reduce the growing dependence of the United States on politically and economically unstable sources of foreign oil imports." The Canadian oil sands contain 179.2 billion barrels of proven oil reserves. Section 526 of the Energy Independence and Security Act prohibits federal agencies from procuring an alternative or synthetic fuel, including a fuel produced from nonconventional petroleum sources, for any mobility-related use, other than for research or testing, unless the contract specifies that the lifecycle greenhouse gas emissions associated with the production and combustion of the fuel supplied under the contract must, on an ongoing basis, be less than or equal to such emissions from the equivalent conventional fuel produced from conventional petroleum sources. We need to repeal this section, allow imports from Canada, and not prohibit U.S. military fueling options. Section 526 also seeks to bar the U.S. Department of Defense from using coal to liquids and natural gas to liquids fuels. Currently, the U.S. Air Force has certified B-52's, B-1's, and C-17's on these types of alternative fuels. In fact, B-52 aircraft at Tinker Air Force Base have been tested with natural gas to liquids fuels developed by Tulsa based Syntroleum Corporation.
Cosponsored
Senator Coleman (S. Amdt. 5137): opening offshore production and encouraging use of hybrid automobiles which are both part of the Republican Gas Price Reduction Act of 2008.
Senator Craig amendment (S. Amdt. 5153): increases our domestic oil and natural gas production by opening up the Eastern Gulf of Mexico to within 50 miles off Florida's coast. Conservative estimates done by MMS in 2000 indicate that between 1.57 and 2.78 billion barrels of oil exist in this area. In 2008, average U.S. production is projected to average 5.1 million barrels of oil a day and average U.S. consumption is projected to be 20 million barrels of oil a day. We have a long history of successfully drilling for natural gas and oil in the Eastern Gulf of Mexico. Increasing domestic production would stabilize retail gasoline prices. Today, 7 countries (Vietnam, India, Spain, Norway, Malaysia, Canada and China) are leasing and exploring for oil 45 miles off the coast of Florida in Cuban waters.
Related:
Democrats Turn Out the Lights - July 23, 2008 Excerpt: "As American families continue to suffer from high gas prices, Democrats once again denied Senators the ability to debate and offer amendments addressing our crucial energy need, which proves they are not serious about addressing gasoline prices," Senator Inhofe said. "As the most important issue facing Congress, Democrats are dictating a closed process in an effort to deny votes on real solutions. We need to have votes on off-shore drilling; Rocky Mountain oil shales; promoting domestic natural gas as a transportation fuel; repealing section 526 of 2007's energy bill - which would preserve America's ability to import fuels from Canadian oil sands. America demands more from Congress." Read More...
Inhofe Welcomes Senate Debate on Bringing Down Gas Prices - July 22, 2008 Excerpt: Sen. James Inhofe (R-Okla.), Ranking Member of the Environment and Public Works Committee, today voted in favor of the motion to proceed to S. 3268, the Energy Speculation Bill, with the understanding that Senators will be allowed to offer and debate amendments to the bill. Through his leadership position on the EPW Committee, Senator Inhofe has been working with his colleagues to find ways to bring down rising energy costs. Last week, Senator Inhofe introduced the "Drive America on Natural Gas Act" as well as a comprehensive energy proposal, the "American Affordable Fuels Act," to address insufficient refining capacity, increase energy supply, and promote the use of future transportation fuels. Read More...
