RIGZONE - US Pres. Vows to Break 'Addiction' to Foreign Oil, Increase Domestic Prod.

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US Pres. Vows to Break 'Addiction' to Foreign Oil, Increase Domestic Prod.

by Phaedra Friend

Rigzone

Wednesday, January 21, 2009

President Barack Obama
(Click to Enlarge)

US President Barack Obama spared no time in stepping up to energy issues, posting an energy agenda on the administration's new White House website on the day of his inauguration.

Equating US dependence on foreign oil to an "addiction," the plan focused both on alternative initiatives and increased domestic production of hydrocarbons. While in the short-term, the administration plans to pull oil from the strategic petroleum reserve to lower prices at the pump, a major long-term goal is to completely eradicate petroleum imports from both the Middle East and Venezuela within the next 10 years.

The new administration vowed to "crack down on excessive energy speculation," as well as to establish a "use it or lose it" policy for existing oil and gas leases in an effort to "promote the responsible domestic production of oil and natural gas." Additionally, the new energy plan places a high priority on the construction of the Alaska Natural Gas Pipeline.

WHAT DO YOU THINK?

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Pirthpall Sekhon | Jan. 31, 2009

Excellent idea.

Nevin Bates | Jan. 29, 2009

The need for oil in this country will only get worse; it's time now to drill where ever oil can be found and what ever the cost may be. Alaska would be a good start.

Aussie MD | Jan. 28, 2009

Get NYMEX back above $6 an mcf and WTI back above $50 a barrel. That will get confidence back, and the industry will do the rest!

Rick Thomas | Jan. 26, 2009

I did not vote for B.O. We will never be able to drill for oil or any thing else until we can do away with the epa and tree huggers. I am a oilfield worker and find it easier to work internationally

R.A. Coggin | Jan. 26, 2009

Like others out there, I have been in the field for 23 years, and I am looking to go to work in other countries due to the fact that the only real major slow down is here in the states. Personally, I have been through four major slow downs and have never missed a day. I do not plan to start now, but it is sad that I am having to look overseas to do it. I would prefer to stay right here at home in Texas.

Roughneck | Jan. 26, 2009

If Obama wants to use what we have and help our economy, he needs to get with the drilling companies and put our work force back to work. I'm in Texas, and over half of my area have been laid off due to no drilling, including myself. I took a job paying half, and my family is suffering for it. Im a roughneck and proud of it, but can't do what I love to do. These drilling companies are running scared and putting good people out of work.

J Don Calicutt | Jan. 26, 2009

Drill Here, Drill Now. Great Plan.

Al Gallagher | Jan. 25, 2009

I did not vote for Mr. Obama, and I am employed within the oil industry. I think he is addressing many issues at once, I am impressed, however I will have to wait and see what the results are after a few more months.

DJL | Jan. 25, 2009

I see alot of good ideas. Its going to hurt, but at some point we have to get off the foreign oil, there are major reserves we haven't tapped into yet, Pres. Obama. I didnt vote for you , but you are our president. I only hope you can back up all the hype!!!

Let us drill, we'll find it in the great american way, hard work. We in the oil field are so ready to get the job done.

I'm in the middle east right now because my company is forced more and more to come here because there is no where else that you the government will let us drill.

China is drilling off the coast of Cuba, not very far from the mighty state of Florida, who by the way won't let us drill.

We're ready, all you the government has to do is turn us loose.

Good luck and God speed to all you oil field workers.

Edward Konopka | Jan. 24, 2009

During World War II we were fighting against ME109 flying on diesel fuel made from liquified coal. The US Airforce is experimenting with the same technology. US has a lot of coal. Why dont we hear more about hi-grade diesel fuel from liquified coal?? Ed

James Lewis | Jan. 23, 2009

What is the purpose of unloading from the reserve, when when the wti cushing is packed full, and the pipelines going there are packed full and the leases are packed full of oil to the point the pumpjacks won't move? They are probably burning the belts off and twisting out the drives in a attempt to satisfiy the R-O-I to keep the wolves away from the door.

Charles | Jan. 23, 2009

I think we all agree we need to do something. However, I don't think we can change overnight. We need to look at all options, fuel efficient cars, hybrids, electric cars etc. The recession seems to have made the biggest dent in the fuel prices and usage. People need to drive less. We should car pool and use mass transit more. I think if people change their habits we won't need to draw on the SPR.

Stevie Wonders | Jan. 23, 2009

The term "foreign oil" needs to be better defined. Today, Canada is the US's biggest supplier of crude oil. Any eradication of the importation of Middle East and Venezuelan oil can only be done if supplies for Canada are secured. As of right now, they are secured through NAFTA. If President Obama throws out NAFTA, as some expect him to do, there goes a big portion of the US's energy security. Canada may choose to sign supply contracts with China, who is knocking at the door.

Tom Clendening | Jan. 23, 2009

I have worked in the U.S. oil field for the last 28 years & I think it is about time that we get away from foreign oil any way we can. The U.S. has oil & gas but we need to be able to explore for it. It's true that a few people make a lot more money than they need, but it also takes a million or more to drill with no guarantee of any return. Most people in the oil field just go to work and make a living wage. How about some price support for company's involved in U.S. It takes 22 million dollars to build one new Patterson Drilling rig that is stacked due to no demand or prices on oil & gas. We need to change our way of thinking and wake up. Support the U.S or move to the middle east. P.S. I leave for La. tonight to work on a rig.

Peter Golden | Jan. 23, 2009

High priority should be placed on other Natural Gas Pipelines in Colorado, Utah, Wy, and Montana as well. We also need more refinery capacity to reduce the price of Gasoline. Drill Obama Drill!

Kyle Graebert | Jan. 23, 2009

About time we can start ramming and cramming again git-r-done

Peter | Jan. 23, 2009

Welcome to the real world!! Sure. You can BS some of the people some of the time.......... You get what you vote for.

TJ | Jan. 23, 2009

It concerns me "to pull oil from the strategic petroleum reserve to lower prices at the pump" because I do not know the details, how much, how low will he go before the US would be at risk during a crisis. I believe taking out of your savings account is a bad idea; it is there for a reason.

Becoming more self sufficient is an excellent idea, I wish would have stuck to this philosophy our entire US history.

Tim | Jan. 23, 2009

"Cracking down on excessive energy speculation"? More big government, our new President is most certainly on a path of future destruction of our free enterprise system, his view point is big government can correct all problems, wrong and bad for our future.

Joshua Lee | Jan. 23, 2009

Unrealistic!

Pro-domestic | Jan. 23, 2009

There are so many different views on this subject. Can't make everyone happy, but my vote is let,s concentrate on our own back yard for once.

Barry | Jan. 23, 2009

The bridge to energy independence is natural gas. He should push car makers and infrastructure to making it available. Compressed Natural Gas powered vehicles are clean and are PART OF THE ANSWER. America has an abundance of natural gas available. Put it to use in cars!

I am on the cutting edge of deepwater oil exploration. I work out here in the search for new oil. It is here, but difficult and expensive to find. We can continue in the search with an oil price of $75 dollars a barrel. At $30 a barrel, we will be stressed to continue!

Driller | Jan. 23, 2009

I'm a driller and don't want to have to go through the times of the 80s again. Not knowing if we are going to be drilling or collecting unemployment. We need to keep the drilling going on here in the states, and get the cost of energy down where we can afford to live for the day, not pay for the day. I live in the natural gas region of Pa. and would like to stay employed, by drilling for the gas in the Marcellous. Times are hard enough, we don't need to pay through the nose for out of the country gas or oil, when we can drill for it right here in the United States.

Calgary | Jan. 23, 2009

I don't believe abortions have anything to do with the price of oil, Brian. Staying ON topic... I like B.O.s comments, as long as his vision of American protectionism includes NORTH America, especially the Oil Sands here in Alberta. We still have more potential reserves than Saudi Arabia... and I wouldn't mind putting $5.00/gallon gas in my Hemi if it means I can stop laying people off.

Roger P. | Jan. 23, 2009

Lets hope the time-honored tradition that the office of the President tends to moderate the views and policies of the occupant works for this President, too. That being said, I'm not optimistic. As far as pulling down the SPR, the SPR was a ridiculous idea when the Carter administration dreamed it up and it remains a ridiculous idea to this day.

Danny | Jan. 23, 2009

Pulling the reserves is not a GOOD idea at all, but getting away from the Middle East and Venezula is good, should be done sooner than 10 years though. Bad dictatorship down there and we need to stop supportting them with buy crude. The idea of using the reserves is just to try and please peoples wallet and minds, but in the long run will further to hurt America.

Robert Rains | Jan. 23, 2009

The use it or lose it Idea would be a blunder for us. Most of those leases have already been explored and determined not to be comercially viable in todays market. We should wait until some time in the future when Oil is over $200 a barrel, and it may be comercially viable. To make Operators Use it or Lose it will just increase the price now instead of later.

Mike H. | Jan. 23, 2009

What about the lack of sufficient refining capacity in the US? Has he thought about that one? Let's see how he does with the environmentalists on that issue.

Robbie N. | Jan. 23, 2009

Sounds sweet but completely unrealistic. The USA simply does not have the reserves to replace its imports, no matter how much drilling is done. Using the strategic reserve to reduce the pump price will have 2 effects: firstly it will discourage companies from domestic exploration because they can make better profits abroad. Secondly it will encourage motorists to use more petroleum and continue to drive gas guzzling cars and trucks. Making more fuel efficent cars and encouraging people to drive smaller vehicles will make the single biggest contribution to reducing the countrys relience on foreign imports.

rod | Jan. 22, 2009

He has the right ideas but will the old regime stand in his way. Energy will determine the fate of America. The party is over, time to clean up the streets and get back to business. Now is the time to tell the banks and car manufacturing what needs to be done and how to manage money and produce fuel efficient cars. Heck I can even make those ideas.

Pete B | Jan. 22, 2009

He almost got it right. Oil prices are the lowest they have been in about 4 years. We should be buying oil to put in the strategic petroleum reserve, not selling oil out it. If the price of gas goes back up to $4 / gallon, then you sell, and the government would actually make a profit.

abraham | Jan. 22, 2009

This is a very good step.

larry seguin | Jan. 22, 2009

I have worked in the oil industry since 1979. I have worked in most countries in the world. I worked in Qatar on the Shell gas project. (natural gas to car gas and diesel fuel)

The biggest shell refinery is being changed in Texas from oil to natural gas. Most countries in the world have found large reserves on land and offshore. Oil prices will be 25 to 20 bucks a barrel.

Wade | Jan. 22, 2009

My family depends on the drilling. In Wyoming that's how we make our living, the more drilling the better for us working the field. If he ain't blowing smoke, then I like the idea!

perry rederburg | Jan. 22, 2009

Sounds great as long as prices of energy can be kept reasonable for the people and the huge profits that have been rewarding a small group of people end. Oil companys must be fair to all.

ME | Jan. 22, 2009

Gee, another run to the middle -- I seem to recall Obama saying during the election he opposed more drilling because it wouldn't make a difference. But I'm glad he is coming to his senses.

Tom S. | Jan. 22, 2009

This will be good for E&P in the long run. Using strategic reserves at this time is real bad idea, however.

Actually, the whole idea sounds ridiculous and meant only as a political payoff to the whacko environmentalists.

Jerry H. | Jan. 22, 2009

My view is that Obama is Jimmy Carter II who proved to be one of the best friends of the independent oil man with his old oil new oil policy.

Watching the investments that George Kaiser makes (Kaiser Francis Oil in Tulsa) since he is a big backer of Obama will be an interesting indicator of Obama's energy plan.

Watching Warren Buffet and his coal companies react to Obamas Cap and Trade will also be interesting since Buffet is also a big backer of Obama.

K Pinckard | Jan. 22, 2009

I would pay $5.00 a gallon if it means that all the oil and gas came from the great USA and not some other place. Drill man drill. Think off all the people that it would help in the USA. Made in USA and stay here.

RJones | Jan. 22, 2009

The last I heard the Permian basin activity was down 40%, primarily due to the weak price of oil. Sounds like a political statement, with out a viable solution.

Ben Benson | Jan. 22, 2009

OK Robin Hood...... now what!

Jim | Jan. 22, 2009

Equating foreign oil to an "addiction" should rather be phrased a "dereliction" by those who have opposed freedom to drill and produce responsibly in the past and present. "Cracking down" and a new social "policy" doesn't sound like more freedom! Nevertheless, let's hope there is some good that comes of this.

ron jeremy | Jan. 22, 2009

Funny how a discussion about energy policy and drill leases invoke a comment about partial birth abortion.."throw the Bible at that @#$! Liberal! That'll learn em!" Ridiculous...

Vance Whitesides | Jan. 22, 2009

Natural gas potential from shale should be quantified before we spend billions building a pipeline. The problem we have with energy is that we have not quantified what we have or investigated the possible reductions in energy from conservation (efficiency).

Katherine Robertson | Jan. 22, 2009

Honestly, if "in the short-term, the administration plans to pull oil from the strategic petroleum reserve to lower prices at the pump," it will be even more difficult for oil and gas companies to make any money here. Those that can will focus their production and supply in countries that will be more likely to earn them a profit. These companies have a legal obligation to those who own their stocks to turn a profit and make those stock prices rise. Also, if they are not earning money, then the oil and gas companies will not have enough capital to put towards research into cheaper, cleaner, and more cost-effective ways to continue production in existing fields nor to explore new resources in unconvential fields. Why limit the growth of companies that produce something vital to our way of life? Does he want to do to the oil and gas industry what happened to the US auto industry and the banks?

David B. | Jan. 22, 2009

Well this looks really good on paper! This will mean that business in Canada is going to boom! They have to draw the oil and gas from somewhere.

George Wunderlin | Jan. 22, 2009

The new President got the message about Alaska. Hooray for him!!

M.J. Ordoyne | Jan. 22, 2009

Big Pipe dream getting away from imported Crude. Energy Speculation is the Back Bone to the Independent Small Oil Producers, (ROCI), Low Prices will slow this section. Use or Lose, (a Contract is a Contract on leases). Permitting & Regulations are in the hands of Gov. If he plans to release Oil from the reserves to keep prices down and not import Oil,(Is the Tank Half Full Or Half Empty!).I guess we will find out soon. The Gas pipe line would be a Plus.

Larry M. | Jan. 22, 2009

"DRILL HERE, DRILL NOW" Should be the attitude of the new administration!! Support our Independent smaller Domestic Exploration/Production companies and stop the Roadblocks that the Congress is supporting and let's get on with the business of stopping the $7 Bil.+ that we give to support Countries that DON'T LIKE US MUCH!!!

Frank Chamberlain | Jan. 22, 2009

It seems a nice idea on paper, but the US has a fundamental design problem. For example, when I lived in New Orleans the main shopping street had two 4 lane dualled highways passing through it. The only way to cross from one side to the other was - by Car, which nearly clocked a mile in distance or by Ambulance ... walking was never an option.

Still the first GOD completed the building of the world in 6 days, before he rested. I suppose it will take longer to repair the mess we are in ... I suppose we must give the second GOD about a fortnight. After all, our George Brown saved the Banking World in a week, and he is no God.

Dave | Jan. 22, 2009

The fact that he thinks he can exclude regions or countries from supplying the US tells me he does not understand oil is a global commodity and regions can not be isolated from the rest of the world. It is like taking a tea spoon of water from a glass and expecting to be able to see an indentation.

Art Vandelay | Jan. 22, 2009

It will take a LOT more domestic production to be 100% free from foreign oil than this administration/congress will allow.

"...administration plans to pull oil from the strategic petroleum reserve to lower prices at the pump"

What do they want, .50 cents per gallon at the pump??? Smells like a strategic political move. Run the price down for a nice increase in the gov. gas tax.

Kelli Roberts | Jan. 22, 2009

Energy is the core of this nation's economy and it's good to hear that he is listening to his advisers and trying to reach a compromise on all fronts. In order to better understand this news brief, you need to have been following what has lead up to these announcements as far back as last year's campaigning (when oil hit $150 pb); this won't make any sense if you don't go back and do your homework. Also, remember that $700 billion bailout package? - Well go back and read the actual bill that passed and you will have a better understanding of what this is all about.

Energy thinker | Jan. 22, 2009

Let consumers find creative ways to use less. Let producers find creative ways to produce more. Drill now, drill often but respect the environment as has always been the case. Govt policy - stay out of the way.

TEd Johnston | Jan. 22, 2009

Use it or lose it? Perhaps he needs to spend some time offshore and see what it takes to develop these fields.

Bobby N. Hill | Jan. 22, 2009

Long on style, short on substance.

Lionel Linares | Jan. 22, 2009

What you want and what you actually accomplish are two different things with out a proper plan; I do not see details of a plan that will even move toward these goals.

Francis J. Pereira | Jan. 22, 2009

I think the administration is dead right in their thinking. Most of the big 7, because of the money that they have go out and buy up leases to blocks that they have no intention of working, thereby preventing other players from gaining access to those fields and possibly working them and producing oil from them. A sort of dog in the manger. I think it is high time we instituted the policy of use it or loose it so that other oil companies with the willingness to work these fields can extract the oil from these fields and thereby increase the availability of oil from domestic sources thereby reducing our dependence on foreign oil.

Ron | Jan. 22, 2009

Go big Daddy, Go!

Ralph E. | Jan. 22, 2009

I don't really understand the "use it or lose it" idea. I don't know many operators who intentionally carry a large lease inventory without any intent to drill. Why tie up all that capital if you dont want to "use it?"

| Jan. 22, 2009

In order to increase prodution, you will have to increase drilling.

johnny melancon | Jan. 22, 2009

I am a oil field man since 1989. I plug depleated oil and gas wells. I believe that there should be some organization in the industry to push the use it or lose it policy. The condition of the wells today are poor and dangerous. Hope barack obama sticks to his guns and enforces this.

bob | Jan. 22, 2009

I would like to know exactly how we are going to get off foreign oil. It is impossible unless we switch over to nat gas or nuclear.

Brian B. | Jan. 22, 2009

Pull down strategic oil reserves to lower prices. Wont work market is already sloshing in unused oil. Factoring in refinery costs, transportation, and yes federal/state taxes you see gas for what it is +-15%. No Mid-East Oil hmmm I am thinking ANWR, California offshore, and our biggest untapped field offshore Florida before the Cubans/China drain this one for us and sell it back to us. Use it or lose it Federal Leases "already is always has been". Alaska Natural Gas Line already on the way. All sounds great though if you dont know.

RAMADAN | Jan. 22, 2009

Grandiose plans, heavy on rhetoric and very short on specifics. I suspect that if we look very closly at his OTHER cabinet level picks we will find that those folks have a totally different personal and professional agenda than the President. I suspect oil and natural gas prices will become so expensive that they will be crushing to our economy. Why, the parts of the Federal Govt that handle all the permitting will be gridlocked by all the regulations we are about to see along with the new "re-interpretations". That transformation could start in one or two months with no legislation required. At some point in all this "the way he talks and his lack of good sound ideas" will start wearing very thin very quickly.

Fraser | Jan. 22, 2009

Are we reading the same article Lora????

Gabe Galindo | Jan. 21, 2009

I like it "use it or lose it" on existing domestic Leases!! Drill baby drill!!!

Brian Amburn | Jan. 21, 2009

If he would reverse his position on "Pro Choice" (murder), I would be more than willing to pay higher taxes and I would support him... I am one of the owners of an oil field service company, but I would rather go broke than endorse someone that believed partial birth abortions should be legal.

Thanks,

Brian Amburn

Erik | Jan. 21, 2009

that would be nice considering he cost me my job

Frank Shattuck | Jan. 21, 2009

I love the way he talks & like his ideas.

Michael Palasch | Jan. 21, 2009

Amen Brother!

| Jan. 21, 2009

I think he is living in a dream world.

Lora Cantu | Jan. 21, 2009

What does all this mean? Is this saying all the thousands of people that work on drilling rigs will continue to lose there jobs, and drilling in the United States is going to come to a stop? Thanks Lora

bit hand | Jan. 21, 2009

Drill Baby Drill

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