Deepwater Drilling Offshore of the US yields oil at $57 per barrel (see note 1) and, according to Forbes, the Break-Even price is $65 per barrel. It makes no sense to drill deepwater wells offshore of the US with WTI crude oil under $35 per barrel And given that the costs to produce a barrel of oil in the Middle East, range from $8.50 in Kuwait to $9.90 in Saudi Arabia, to $12.60 in Iran WE CAN’T COMPETE!

But we shouldn’t bother. We should move to a post fossil fuel economy.

According to Visit NJ . Org, here, Tourism in New Jersey was a $42.1 Billion industry. Do we really want to sacrifice $42 Billion per year to LOSE $24.00 per barrel on oil while contributing to climate change?

NJ Senators Cory Booker and Robert Menendez and NJ Representative Frank Pallone say “NO!” Most recently, Sunday, January 31, 2016 on the Boardwalk at Asbury Park, NJ. (Asbury Park Sun, here).

As noted above, Deepwater Drilling off the United States costs $57 per barrel. According to Helman (4) and  McMahon (5), writing in Forbes, the Breakeven price is between $65 and $80 per barrel, well below the current price for West Texas Intermediate Crude, WTI. This is pictured above and described in table 1, below.

Therefore it makes no sense to drill deepwater wells off the coasts of the US, as is currently being debated in Washington, DC.

The low price of oil reflects oversupply. The Arabs and Iranians are simply pumping all they can because they can still make money at current prices.  It makes no sense for Americans to drill for oil off the Atlantic, Pacific, Alaska or in the Gulf of Mexico.

The future of energy is solar, wind, and the kinds of batteries being developed by Tesla, Ambri, and Aquion, as described by Martin in Bloomberg Business, (7)

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Notes

1. Knoema, Cost of Oil Production by Country, updated, 1/21/16,
2. Petroff and Yellin, Money.cnn.com, “What It Costs to Produce Oil,” 11/23/15,
3. Petroff, Money.CNN.com, “The Cost to Produce a Barrel of Oil,” 11/24/15,
4. Helman, Forbes, “Bad Timing? Chevron Christens New $8B Deepwater Oil Platform”, 12/2/14,
5. McMahon, Forbes, “Low Oil Price May Stifle Deepwater Drilling And Oil Sands But Not Fracking”, 3/1/15,
6. NASDAQ, Crude oil price history, checked 2/3/16,
7. Martin, Bloomberg Business, “The $5 Billion Race to Build a Better Battery”,  4/14/15.
8. Napoliello, NJ Com, Offshore Oil Drilling In Atlantic Threatens NJ Tourism, 1/31/16.
9. Gladden, Asbury Park Sun, “Pallone, Menendez, Booker Lead Charge Against Off-Shore Drilling,” 1/31/16.

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An analyst with Popular Logistics, and a free-lance writer for Seeking Alpha, I hold an MBA in “Managing for Sustainability” from Marlboro College, and a BS in biology. I am not an epidemiologist or a statistician. I also have over 20 years experience in Information Technology. Available as a speaker and consultant, I can be reached at “L Furman” at “Popular Logistics . com”.