RSS Feed MenuU.S. domestic oil production peaked in 1970 and even with the new Alaskan North Slope oil, technological improvements, and a host of other finds, it has marched downwards ever since. This decline did not reverse itself during the huge price run-up in recent years that had everyone with a drilling rig looking for every barrel he could find. Since 1999, the number of drilling rigs has more than tripled without stopping the steady slide of domestic oil production.
Meanwhile, even assuming we wished to drill in Alaska’s Arctic National Wildlife Refuge (ANWR), the estimated size of these resources, (10 billion or so barrels with an extraction rate of less than 900,000 barrels per day of crude oil) are modest given the extensive needs of the American economy, which consumes almost 21 million barrels of oil per day. The U.S. Energy Information Administration has projected ANWR exploration would reduce the cost of a barrel of oil by just twenty-five cents. America imports 62% of its oil and that number is only likely to increase in the face of growing oil demand, demand that has only softened modestly even during an era of extremely high prices in the worst U.S economic environment since the Great Depression. While new fields in the Gulf of Mexico may finally stem this decline over the next few years, the long-term trend is unmistakably downward.
None of this is to suggest that America shouldn’t be expanding domestic drilling for oil. It would be unsurprising that conservatives could have legitimately differing views on the wisdom of drilling for more oil domestically offshore or in ANWR, balancing environmental stewardship concerns with economic and strategic imperatives. But no honest analyst in the industry would ever suggest that domestic oil drilling in ANWR or elsewhere in the U.S. is going to form a core of future U.S. energy policy. At best, it is a moderately-useful supplement. Furthermore, a good deal of the price rise in areas such as gasoline has been to a shortage of U.S. refining capacity rather than crude oil. Conservatives need to recognize this and understand that while domestic drilling for oil and gas may be a political winner, it is not the serious basis for an energy policy.
Instead of focusing most of our resources on the drilling dead-end, conservatives could champion reduced prices for gasoline by demanding greater accountability transparency in oil and gas futures markets, which cost Americans billions of dollars through uncontrolled, opaque, and highly leveraged speculation. Many industry analysts believe that this speculative bubble was a major contributor to the oil price explosion (and subsequent collapse as cash-starved hedge funds unwound their positions). While derivatives markets in oil and gas play an important role in balancing the market, and can serve an entirely useful role in helping companies mitigate price risks, unless conservatives can introduce some regulatory sanity, and acknowledge that a great deal of market gaming has been going on, the use of these markets as a tool can be put at risk. During the bubble, Wall Street speculators played with massive amounts of other people’s money to exploit arbitrage opportunities. Now taxpayers, having given many of these firms billions in profits when their speculative trades worked, are bailing them out for their losses. This is hardly a “conservative” or “free market” victory. Conservative engagement on enforcing proper regulation for these markets is vital to their success.
Mike K // Apr 26, 2009 at 10:01 pm
The point isn’t that domestic production will be the core of future energy production. It is a sign that we are not surrendering to the oil oligarchs. I would rather see 25 nuclear power plants under construction and oil shale production accelerating. Ultimately, what all this is is a transition to fusion or some other future power soiurce; maybe algae making oil, but the present passive posture is a disaster.
barker13 // Apr 27, 2009 at 9:05 am
O.K., Jeremy, I hereby appoint you “Energy Czar;” faster than a speeding bullet, more powerful than a locomotive, able to leap tall buildings in a single bound… and… oh, yeah… given the authority to command both public and private resources and to override environmental and all other laws and regulations with a wave of your hand.Now… your “mission” is to see to it that now, mid-term, and long-term America and Americans have access to cheap, plentiful, clean (as technologically possible balanced against the cheap and plentiful mandate) energy and that while we may not be totally “self-sufficient” in energy terms…. we end up in relatively better shape than most industrialized tier 1 nations.Seriously… Jeremy… forget political reality, forget ideology… YOU have the power to give Americans cheap, plentiful, relatively safe (environmentally speaking while taking into account cost/benefit analysis) and secure energy resources… WHAT ARE YOUR BULLET POINTS?Thanks!BILL
JJWFromME // Apr 27, 2009 at 9:31 am
DRILL, BABY, DRILL WONT WORKYou movement conservative guys are quite comical. Do you think many people outside your movement even gets the reference?http://www.project1968.com/burn-baby-burn-the-los-an.htmlI mean, I wasn’t even born yet. And I’m creeping up on middle age. On second thought. Maybe no one was *supposed* to get it outside of the hard core supporters. It was just an example of dog whistle politics. Stay classy, GOP.One thing about the Internet: We can go around traditional broadcast media–everyone gets to hear the dog whistle as long as they have a modem. Get used to it. ; ).
sinz54 // Apr 27, 2009 at 10:06 am
JJWfromME: “Drill, Baby, Drill” (or the prior slogan, “Drill, Drill, Drill”) was a mantra for many conservatives in 2008. It’s important for conservatives to be told that it’s false and not to use it anymore–because moderate and swing voters already know that it’s false, and it won’t win us many votes among them.The etymology of the slogan is totally irrelevant. It’s even irrelevant for conservatives. Especially since the original formulation in 2008 was “Drill, Drill, Drill.”
barker13 // Apr 27, 2009 at 11:27 am
Re: Sinz54; wrote 57 minutes ago –So… let me get this straight…Exploiting new as well as underutilized domestic energy resources won’t provide more energy?(*SCRATCHING MY HEAD*)Is that your “professional opinion” as an engineer? (What kind of engineer are/were you, anyway?)Hey, Sinz… ever hear of the Omnibus Public Land Management Act of 2009? One provision of the bill created 2 million NEW acres of federally “protected” land now off limits to drilling, taking about 8.8 trillion cubic feet of natural gas and 300 million barrels of oil out of production in the state of California according to the Bureau of Land Management.http://www.ibdeditorials.com/IBDArticles.aspx?id=323305469830589#According to the citation provided above, “the energy resources walled off by this bill would nearly match the annual production levels of our two natural gas production states – Texas and Alaska.”Question: In the land of Sinz where added production… er… doesn’t add to final product…(*STILL SCRATCHING MY HEAD*)…is the “logic” also that the more land you place off limits to energy exploitation the better?BILL
Jeremycarl // Apr 27, 2009 at 1:55 pm
Thanks for the comments– as for my ideal energy plan– I’ve got a few more posts in this series, so I’ll remain mostly silent for now– But generally speaking, I’m against big, ineffective mandates like Kyoto– and I’m against a strategy that makes us more dependent on oil that I don’t think is going to be available to us domestically no matter who is in the White House. I’m for a lot of technology RD&D (Research development and deployment) set up in such a way that leverages a lot of private dollars for every public dollar we are spending. I think the energy/climate problem is either going to be solved primarily by the development of lots of new energy technologies (particularly in energy distribution and storage) or it is not going to be solved at all. There are some attractive aspects of “The Apollo Project” favored by some on the left, but it is too tied up with liberal special interests (especially unions) and I don’t think it does enough to ensure that you don’t just have the government picking winners. I’d love to see a conservative version of this. The tax credits to prime the pump for Hybrid cars were also a good idea.So those would be a good start, but again, I’ll be talking more about a lot of this in future posts. . .
shipwack // Apr 27, 2009 at 2:35 pm
barker13″Exploiting new as well as underutilized domestic energy resources won’t provide more energy?”Well, no, that was never said, at least in the original article. The point is that even with the ANWR drilled and pumping to the limit (which of course would take several, if not more than a dozen, years to accomplish), it would provide less than 5 percent of our -today’s- daily oil consumption! To save you the trouble, the math is: 900,000 divided by 21,000,000 = .043 = 4.3%Oh, and notice how I emphasized the word “today’s”? Oil consumption has gone always gone up, never down. The percentage that this will help us will be even less in the future, unless the congress is willing to push energy saving measure in a big way. Hmmm, considering where I’m posting at, feel free to change that to “every state is willing to push energy savings in a big way without any help or intrusive new laws from the national government”.So the real and honest question is, “is it worth spoiling Alaska’s wonderful ecosystem and scenic beauty to supply less than 5% of our imported oil needs?”Oh, by the way, you do realize that there is no way (currently) to ensure that this “American” oil winds up supplying the United States? It’d go on the open market, and most likely end up in China, fueling their growing industrial complex. The oil companies aren’t for drilling because it will help America… They are for it because it will make them money. Something to keep in mind the next time you see them lobbying for expanding drilling.By the way, it’s articles such as this one that keep me coming back to “New Majority”; the fact that there is some sanity on the right, and that they’ll eventually bounce back and prevent a permanent Democratic majority… Which would be just as bad for this country as a permanent Republican majority.
barker13 // Apr 27, 2009 at 4:38 pm
Re: Shipwack; 2:35 PM –A 5% increase works for me. 10% would be better… 20% better still… 2% not as good… but the point is, more = more.(*SHRUG*)If you have the opportunity to increase your income by 5% do you turn around and say, “Nah… not interested… I don’t need no lousy 5% raise?”As for oil consumption rising… well… that’s all the more reason to increase supplies – from a consumer’s point of view at least as well as from a national security standpoint.As to your pointing out that it takes time – years – from start to finish to get new energy producing/refining capacity up and running, generating fuel… so…??? All the more reason to start gearing up NOW rather than later. You ever BEEN to ANWR – or should I say the the tiny portion of ANWR where the drilling would take place? I haven’t, but I’ve seen pictures. I say drill away!Seriously… you realize Manhattan was once “pristine” wilderness. Me? I kinda like the skyline. (*WINK*) Do you live in a cave? Do you consider your house an “eyesore?” I don’t consider man’s civilization to be an eyesore. Oh… sure… parts of it, but I have faith that here in the United States we can exploit our natural resources in a fashion that I can accept. Shipwack. I don’t know ANYONE who is “pro-pollution,” pro-environmental carnage.” Do you…??? “Oh, by the way, you do realize that there is no way (currently) to ensure that this “American” oil winds up supplying the United States?”(*SMIRK*) Yeah. I’m aware of… er… markets. (*WINK*)”It’d go on the open market, and most likely end up in China, fueling their growing industrial complex. The oil companies aren’t for drilling because it will help America… they are for it because it will make them money. Something to keep in mind the next time you see them lobbying for expanding drilling.”Heavens! God forbid companies make money! (*SHIVER*) Hey… tell ya what… after we get the operations up and running I’ll consider any and all “America First” type policies, protectionist legislation, heck… even partial nationalization. You actually bring up a good point. In the future we may indeed be faced with an energy environment where the U.S. will have no choice but to go to an “every nation for itself, American oil companies owned by Americans (50%-plus).Thing is… regardless of anyone’s initial reaction to this last paragraph… unless we CREATE the productive domestic energy infrastructure of more drilling, more mining, more refining… we won’t have the option of deciding how the capacity might best be “controlled” or regulated simply because they’ll be no capacity to argue about – it won’t have been created!BILL
kroner // Apr 27, 2009 at 9:15 pm
More than just as something nice to look at, our environmental resources have some very real value to us. Destroying wildlife habitat, killing off species and generally knocking ecosystems out of alignment creates ecological problems that tend to have serious consequences for us down the line, often unforeseen. There are many examples, whether it’s climate change causing severe weather, pollutants causing health problems, the decline of resources we depend on, like fish stocks. I know it’s been said so many times that a lot of people on the right have just decided to stop listening. But that doesn’t make it any less true.So yes, drilling in Alaska has benefits, but it also has a price, which is something that needs to be weighed as well.
Stewardship // Apr 28, 2009 at 5:29 am
There is a human cost to drilling in ANWR. North America’s last indigenous people living a subsistence lifestyle, the Inupiaks, would be dramatically impacted by migratory changes caused by blanketing the coastal plain with infrastructure. The Arctic National Wildlife Refuge is an incredibly beautiful place…sometimes referred to as America’s Serengeti…and is one of the largest contiguous wilderness areas in the world. I’m willing to pay the half-cent to two cents extra per gallon of gasoline to preserve that place for future generations of Inupiaks and my own kin.Wind, solar, nuclear, natural gas…we can ramp up, create jobs, and solve our energy, economic, and national security issues in the coming decade. My understanding of oil shale (which, admittedly, is not much) is that it takes so much energy to extract, oil prices need to be in the three figure range to make it work. Technology can improve and become more efficient–but it seems we have easier, better options to pursue right now.My major pet peeve about politicians–be it the city council, county commission, state legislature, or Congress–is that their definition of “our future” ends at the next election. We should be asking, “What’s in the best interest of our children 25 years hence?” and set policy accordingly.
barker13 // Apr 28, 2009 at 9:04 am
Re: Kroner; 9:15 PM –”So yes, drilling in Alaska has benefits, but it also has a price, which is something that needs to be weighed as well.”Exactly. That’s what I’ve been saying! (*GRIN*) The problem is… directly prior to being reasonable, YOU wrote:”…a lot of people on the right have just decided to stop listening.”(*SIGH*) So on the one hand you advance the politically correct (which in this case actually is correct!) notion that it’s reasonable to factor in cost/benefit analysis…YET……you only do so after making it abundantly clear that there’s only one possible rational verdict.(*SHRUG*)Re: Stewardship; 5:29 AM –”Wind, solar, nuclear, natural gas…we can ramp up, create jobs, and solve our energy, economic, and national security issues in the coming decade.”We agree. Certainly we’re in agreement if you’re agreeing with me that the fact we’re not already in the process of building dozens of new nuclear reactors to add to our domestic energy production base is lunacy. Natural gas? I love natural gas!!! (*GRIN*) Make that another point of agreement!Wind… solar… hey… if and when the technology is there to make economic sense count me in. The cleaner energy the better energy. And unlike Ted Kennedy I’ll happily submit to a few “eyesores” if need be.(*WINK*)”We should be asking, “What’s in the best interest of our children 25 years hence?” and set policy accordingly.”(*NOD*) (*HANDSHAKE*)BILL
Carney // Dec 16, 2009 at 12:11 pm
We need to adopt former NASA rocket scientist and nuclear engineer Dr. Robert Zubrin’s plan as laid out in his book “Energy Victory” and his website at EnergyVictory.net.
The most important energy problem is petroleum, because it not only contributes to conventional and global warming pollution (like coal and natural gas), it also funds our enemies in the War on Terror (unlike coal, and mostly unlike NG). Nearly no electricity is generated via petroleum (only 3% in the US), but 97% of our transportation fuel is petroleum based. Last year we spent $600 billion on foreign oil, more than our defense budget; and half of that went directly to OPEC, more than the combined expense of Iraq and Afghanistan (and OPEC is also enriched indirectly by any oil purchase; see below). Because of oil, we are funding both sides in the War; thus, our top priority is and should be petroleum.
“Drill Baby Drill” won’t and can’t work because oil is a fungible commodity. Every drop of oil we drill on our own soil, refine here, and sell here takes that oil off the world market, making the remaining oil available that year for international sale that much more scarce, and thus enabling Iran, Saudi Arabia, Venezuela, Russia, and the rest to charge, and make, that much more. In short, any oil from any source, no matter how seemingly benign (US, Canada, Norway) enriches our enemies, whether directly or indirectly, in a real and world-affecting way.
The only way to end the stream of riches flowing to these world malefactors is to switch to a different fuel. The most affordable and practical alternate fuel is alcohol, because adding alcohol compatibility to a car model costs automakers only about $130 per car, without losing gasoline capability. The transition is thus easy, and we should make alcohol compatibility (flex fuel) a required standard feature in all new cars, like seatbelts. Since 10% of cars on the road are new that year, within about 3 to 4 years there would be a critical mass of alcohol compatible cars such that gas station owners would begin routinely setting aside at least one pump to sell alcohol, if only to avoid being undercut, since methanol in particular is so cheap.
There are various alcohols, such as propanol and butanol, but the most important are ethanol (familiar to Midwesterners) and methanol.
Ethanol is made from the starchy or sugary portions of a wide variety of plants – primarily corn in the US and sugarcane elsewhere. Because both it and its feedstocks are edible, ethanol gets unwarranted criticism as wasting food or causing hunger. In reality, the world is awash in food, and the US and EU restrict food production to avoid prices falling further and bankrupting their own ag sectors. Hunger is caused by poverty, war, corruption, and socialism, not biofuels, which, by mitigating fuel prices, help reduce, not increase food costs. Switching to ethanol would give 1st World farmers all the business than they could want and more, allowing us to drop our production limits and drop tariffs on cheap 3rd world produce, reducing food prices and growing 3rd world jobs.
Methanol can be made from coal and natural gas, as well as any biomass without exception, including crop residues (like corn cobs, stems, leaves, etc., multiplying per-acre alcohol fuel yields), as well as woody detritus, invasive weeds with enormous footprints like kudzu and water hyacinths, and even trash and human and animal sewage.
With ethanol being able to be made from more than 17 crops and methanol from just about anything, no one can “corner” the alcohol market a la OPEC and thus prices will be permanently stable and affordable.
Greens should be happy to know that alcohol burns much more cleanly. No smoke, soot, or particulate matter (so no smog), no sulfur (so no acid rain), far less NOX (so less ozone smog), no carcinogens or mutagens, and finally it’s water soluble and biodegradable, making it no threat to the water table or oceans (no Exxon Valdez). Bio-methanol (not made from coal or NG) and ethanol merely return CO2 to the atmosphere that was already part of the carbon cycle (fossil fuels throw additional CO2 into the air that had been sequestered), thus helping on global warming.
What to do with the electricity shortfall from diverting coal and NG to methanol? Make it up with expanded nuclear fission, and generously fund fusion, which could transform our lives in ways we cannot imagine.
That’s the plan. The most basic and essential element is the mandate that new cars sold in America no longer be pointlessly locked in to petroleum-only, but instead be flex fueled, able to also run equally easily on any alcohol fuel. The technology for this has existed since the early 90s but has had problems breaking through the “you go first” standoff between automakers, gas stations, and consumers. The bill that would break through this is the Open Fuel Standards Act, truly bipartisan and cross-ideological. It’s HR 1476 and S 835.