Wednesday, January 6, 2010

California needs to save it's own behind

California needs to save it's own behind

California can start out by selling its tremendous known oil reserves

California needs to establish a new way of leasing its oil reserves. Deep see oil can be obtained for about $22 per barrel so leasing at royalties 100% over acquisition costs is an adequate profit. A additional corporate gain until start-up costs are covered could be negotiated. That would be $44 a barrel going to drillers. Leaving $35 plus for California and federal royalties.

Facilities in British waters alone. Such operating costs places production costs for one barrel of oil at $22 per barrel, which is nearly the highest in the world. These costs are rising rapidly.

The federal government estimates that California's coastal waters could hold 10.13 billion barrels of oil. That's almost the same amount believed to lie beneath the Arctic National Wildlife Refuge which the Bush administration has pushed hard to open to exploration.

10.13 billion barrels times $35 is $354 billion dollars. Over 20 years that rounds out to $18 billion a year for California. Plenty enough to get California healthy.

"You know, I want to add though, to this idea of drill, drill, drill," Moore said. "Jane, I really think the only way out of this crisis is for Californians to realize if they want to raise the revenues to pay for all these social programs, they got $8 billion of revenues they can tap by developing their own resources right offshore. And, at some point liberals are going to have to decide in California - do they want all these social programs or are they not going to drill to get the money to pay for them."

I think there should be a whole lot more than $8billion. If need be, start a state owned oil project, Brazil and others do ok and hire out what expertise they need.

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