Posted by Jed Lewison on Sun Jun 22, 2008 at 10:33 PM Pacific

Chevron CEO Makes Case For Offshore Drilling

Chevron CEO David O'Reilly from yesterday's NYT (emphasis added):

Q. President Bush this week called for lifting the moratorium on offshore drilling. What impact will this have on future oil supplies in the United States?

A. It is a good thing. The president is going in the right direction here. But I would have gone even further and lifted the moratorium with a presidential order. But you also have to remember that the lag time between exploration and first production is still in the range of eight to 10 years. Still, it would send a very strong message to the world that U.S. energy policy is shifting and is going toward a little more supply.

Q. How much more oil can be produced in these regions there?

A. That’s really impossible to know until we have more exploration. But I know the chances are pretty good it would expand our supply. Let’s suppose that we expanded production by one million barrels a day 15 years from now. At over $100 a barrel — remember this is a hypothesis — that would still mean $3 billion a month less in oil imports. That would have a demonstrable impact.

I'd be open to expanding drilling in the context of a credible long term energy policy, but we'd be crazy to do this as a one-off. (O'Reilly's notion that Bush should have done this by fiat gives you a sense of just how much respect he has for the democratic process.)

Chevron CEO Makes Case For Offshore Drilling

Chevron CEO David O'Reilly from yesterday's NYT (emphasis added):

Q. President Bush this week called for lifting the moratorium on offshore drilling. What impact will this have on future oil supplies in the United States?

A. It is a good thing. The president is going in the right direction here. But I would have gone even further and lifted the moratorium with a presidential order. But you also have to remember that the lag time between exploration and first production is still in the range of eight to 10 years. Still, it would send a very strong message to the world that U.S. energy policy is shifting and is going toward a little more supply.

Q. How much more oil can be produced in these regions there?

A. That’s really impossible to know until we have more exploration. But I know the chances are pretty good it would expand our supply. Let’s suppose that we expanded production by one million barrels a day 15 years from now. At over $100 a barrel — remember this is a hypothesis — that would still mean $3 billion a month less in oil imports. That would have a demonstrable impact.

I'd be open to expanding drilling in the context of a credible long term energy policy, but we'd be crazy to do this as a one-off. (O'Reilly's notion that Bush should have done this by fiat gives you a sense of just how much respect he has for the democratic process.)

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