A quarter-century ban on offshore oil exploration expires next week but don't expect to see any oil rigs going up in the near future. It will take a couple years before the government even awards any leases for offshore exploration and another couple years before the first exploration well is drilled. If oil is found it would take another 5-8 years before oil in any quantity made its way to U.S. refineries.
This has been the claim of the democrats as they sought to block the ban from expiring. "If we are not going to see any oil for ten years then why end the ban. It won't help us now!" The easy answer is if you don't start the process it could be 20 years before we see any oil from offshore. We may not need it right this minute but I guarantee that by the time any OCS oil arrives onshore it will definitely be black gold. With peak oil estimated to arrive at the earliest around 2010-2011 and the latest by 2015 those OCS barrels could be $500 each by 2018 and the earliest expected production date.
The government thinks there is 18 billion barrels of oil and 75 trillion cubic feet of natural gas available on the outer continental shelf. We will not know for sure until the government establishes a leasing plan and oil companies begin running thousands of miles of 3D seismic surveys. Democrats are already saying they are going to try and carve out sections for special bans and republicans are going to fight any broad bans. Both agree the states have the power to ban drilling off their coasts.
Mexico shut down its second export port due to bad weather taking almost all of their export capacity offline. Mexico also had to halt production on 250,000 bpd of oil because they had nowhere left to store it until exports were restarted.
Crude oil was off -1.07 Sunday night to $105.82.