How long will it take for off-shore drilling to affect gas prices and why?

Question

How long will it take for off-shore drilling to affect gas prices and why?

Answer 1

I think you'll find that the cost of the new off-shore oil will be just slightly under the then-current cost of foreign crude.  The price of gasoline or crude oil is no longer tied to the availability or production cost of the product.  Until we address the price gouging by oil and gas suppliers we are not likely to see more than a token decrease in prices.

Answer 2

Off shore drilling is very costly so it will take about a year before you recognize a substantial difference.  The price has increased 200% in the last 10 years per barrel and you can keep up on the cost of oil per barrel on your local news channel.  It will get worse before it gets better.

Answer 3

Effect is felt immediately upon reaching a decision about any changes in a resource. As soon as OPEC decided to produce an extra million barrels a day I saw prices go down and still dropping. Not much but some and it is continued. It isn't so much that they are but that they will. By the time any production increases are actually seen other factors will determine prices and that may not necessarily be good for the consumer. The handful of rigs would mean nothing if there are other problems somewhere in the system. But as long as things stay positive then prices will fall a bit.

Answer 4

Not likely to drop unless demand drops, which will immediately shrink the reserves and supply again.

One point is that the quoted price is just a spot price and not a real market price (it matters)

The other is that extraction costs expressed in dollars hide real resource economics.

Extraction costs should be expressed in barrels of oil expended against barrels of oil returned.

During the 1950s it was close to one barrel of oil in exploration and extraction returned 40.

Now it is 1 barrel returns 4 or less.

When that gets to a 1 barrel return for one barrel invested it is finished.

The price and the amount of reserves no longer matter at that point.

Answer 5

With the bunch of paid for elected officials it will never happen .

Answer 6

All the easy sources of oil in the world are being depleted and therefore, as the price of oil rises, it becomes economically feasible to drill in difficult places such as offshore and to extract oil from difficult sources such as tar sand. It is highly unlikely that offshore oil supplies will decrease the cost of oil. The world is running out, the cost will go up and up and people will drill in more and more difficult places.

Answer 7

5 years and need for refinerys

Answer 8

If they decide to increase oil drilling off shore and in areas that have large deposits of oil, then you would see an immediate drop in oil prices, even though we might not actually see the oil for a couple of years. This is because the price of oil is set by investors and speculators on Wall Street. If they know that we are going to increase the supply, prices would go down at once.

Answer 9

Up to 10 years. To drill offshore is dangerous and costly (in the millions of dollars) It takes special people with expertise and is a risk. And that would be the Big Bad Oil Companies,who by the way make about 8 cents a gallon on gas.The idea of the U.S getting it's own oil or the potential of it may bring prices down.Investor's not oil companies have rigged up the price of a barrel of oil (futures)on the idea that there will be short supply in the future.If there is potential that we can produce our own oil that would flood the market with millions of barrels the investor's would sell out like rats on a sinking ship.Of course the Saudi's and Oil Sheiks are afraid of this too.Just as the housing market were investments(not homes)it reached it's peak and now you see the result when everyone bailed out.Right now as we speak,China is drilling off the coast of Fla.in international water's.Democrats are so concerned with Global Warming that they are not concerned with the price of fuel,thinking people will be forced to ride the subways.That's fine for city worker's but leaves tradesmen,farmer's and many rural people out.I don't think they allow chain saws,2x4's ,ladder's and bales of hay on subway's.There is a No More Excuses Energy Act HR3089.sponsored by Rep.Mack Thornberry (Republican)that needs backed by the people.If you want to back this bill up get on your state Congressman's web site or the one below. As of now our "leader's" are getting ready to go on their July 4th,vacation, and ignore the needs of the people.I feel that this is another time in History that "Let them eat cake" is applied.Some clown had the idea to Nationalize the Oil Companies,imagine that quagmire.