Drilling for Oil is about Rigs

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Wednesday August 06, 2008 · 6:31 AM PDT

2008/08/06 · 06:31

We all know the debate around drilling for new oil offshore, but I have been troubled about how the MSM has not called out McCain on his statements that we could be receiving benefits in a "matter of months". I have heard him say that he had been advised in a meeting with"oil industry executives" that this is possible, that "these are the people who are in the business", as opposed to the "experts" that say the benefit horizon is more like 10 to 20 years.

Who were those executives? How do they justify such comments?

Besides the fact that there are 67 million or so acres already leased that are not being drilled on, the real problem in drilling today is the accessibility of rigs. No rig, no drill.

THis recent editorial covers the ground pretty well: http://news.yahoo.com/...

Offshore rig utilization rates are effectively 100% right now. As of 8/1/08 there were 549 rigs utilized out of a total of 613, or an 88% utilization rate. http://rigzone.com/...

This does not account for the fact of rigs that are in need of servicing or are being overhauled. In addition, building new rigs takes years. Between 2004 and mid 2007, the worldwide rig total increased by only 19 rigs! This during a time of risong oil prices and demand. http://drillingcontractor.org/...

Now it is also critical to note that the rig lease market is a world market. Spot prices for rig leases are currently in excess of $500,000 per day. With offshore fields in South America (Brazil), Africa (Nigeria) and Asia dwarfing the oil deposits we know of off our coasts, the competition for rigs will continue to outstrip available and planned supply.

McCain is just playing a shill game here.

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