"Unless Members are willing to accept gas prices at today's painful levels -- or even higher -- our nation must produce more oil. And we must start now. So this morning, I ask Democratic Congressional leaders to move forward with four steps to expand American oil and gasoline production."
-President George W. Bush, June 18, 2008
"Drill Here. Drill Now. Pay Less."- Petition campaign led by American Solutions for Winning the Future, an organization founded by Newt Gingrich
"I will vote to increase U.S. oil production to lower gas prices for Americans."- Petition circulated to other members of Congress by Rep. Lynn Westmoreland of Georgia's 3rd District
With the recent increase in gas prices, many have begun calling for more domestic oil exploration and production, the thought being that an increase in supply of oil will bring prices down. This idea seems to make sense, and the policy has gained a large degree of support.
But is it true?
There are at least two problems with the idea that drilling will lower gas prices. The first is that any new domestic oil projects will take years to start producing. Even advocates of drilling readily admit this.
The second, more significant problem, however, is that those projects, even if all of them are pursued, are unlikely to bring prices down significantly, if at all.
There are three major areas where new oil development is proposed.
1. Arctic National Wildlife Refuge. An analysis performed by the Energy Information Administration, an agency within the Department of Energy, concluded that, if this area were opened to oil production tomorrow, oil would not begin flowing for at least ten years, that even at peak production the area would supply less than a million barrels per day, and that production would lower the world price of oil by at most $1.44 per barrel. See an analysis here
2. Offshore Drilling. Again, any offshore drilling projects awould take years to start producing. A New York times article cites a 2007 DOE study that says it would be 2030 before offshore projects started adding to domestic production. Current estimates are that ANWR and offshore projects together probably would not produce more than 2 million barrels per day, and this level would not be reached until sometime after 2020.
3. Oil Shale. Ignoring the manifold environmental problems this type of production would cause, the fact is that oil shale could not significantly impact U.S. oil production for 20 years. The RAND Corporation, hardly a mouthpiece for environmentalists, estimates that it would take this long for oil shale production to supply 1 million barrels of oil per day.
While the amounts of described above are not insignificant, they are not huge. The world currently consumes 85 million barrels of oil per day, so all of the projects above together, if they were producing today, would supply only about 5% of world demand. Any effect that increased domestic production would have on the price of oil (and therefore gas) is very likely to be swamped by other factors in the long term, including declines in the production of existing oil fields, increasing demand from the developing world, and moves by OPEC to prop up the price of oil by moderating its own production. More domestic production might dampen further increases in gas prices but is very unlikely to overcome these other factors and actually reduce gas prices.
The current drive by Republicans for more drilling therefore misleads by playing on the current hardship that we are experiencing at the pump. Of course, using current fears and misleading information in order to promote a policy that (a) is near and dear to conservatives but (b) does not actually address the cause of the fear has been a successful tactic of conservatives in recent years (costly, tragic and unsuccessful Middle Eastern war, I am thinking of you).
When one compares the fervor with which drilling is promoted with the lip service paid to other measures such as energy-efficiency and renewable energy sources, it is hard to avoid the conclusion that the Republican strategy is a political ploy. Renewable energy and efficiency measures have the potential to permanently reduce our need for oil, whether domestic or foreign, but one looks in vain for conservative petitions and Rose Garden speeches. Westmoreland has stated repeatedly that we need to conserve and to develop wind and solar energy, but he voted against a measure that would have extended tax breaks for efficiency and renewables projects. He also voted against the bill raising fuel-efficiency standards for vehicles.
There are good reasons to consider domestic oil projects. We do need to reduce our reliance on foreign, insecure supplies. And the transition to a different energy economy is itself going to take a lot of energy, much of which must necessarily come from fossil fuels. There are good reasons not to drill as well- feeding our "oil addiction" may distract us from developing other energy sources, and oil projects, particularly oil shale, do produce environmental problems.
But when deception works, why bother with honest debate?
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5 comments:
I just realized that Newt Gingrich has made an appearance in the last two blog postings now! Wow! That's as many as the number of Newt's ex-wives!
The one substantive comment that I would like to make-- which is, of course, conspiracy-laced-- is that Mr. Green Boy did not discuss the motivation for the apparent contradiction of pushing a future project (opening up more land for drilling) that clearly does not address a present need (lower gas prices). It seems clear to me that the motivating influence originates from those who stand to gain immensely: oil companies. Prices are high, demand is rising; the more oil or access to oil one has, the more money-- a lot of money-- one is likely to realize.
The motivation, which is pure profit-seeking, is clear. Profit-seeking is not alone a bad thing, but profit-seeking at tremendous cost to the environment is horribly immoral.
It is important to the oil companies to open up these various, previously inviolate areas now, while the prices are high (and the Bush-Cheney team are still on the take). Otherwise, it just might never happen.
I would like to see a tracking of where the Big Oil lobbying money is going. I think that would confirm my conspiracy quite soundly.
How difficult to comment when I agree on all points...
But perhaps I could make some confused crypto-Marxian point by noting how the Republican propaganda line resonates oddly with the populist propaganda one hears out of "communist" Venezuela - ie, our natural resources belong to the people (state), so let's nationalize the extraction industries and reap the benefits from exploitation ourselves! Here is the party of Big Capitalism (as opposed to the party of big Capitalism) getting its propaganda lines crossed up, with one melody clashing against another, as it pseudo-promotes a populist response to the recent oil price increases. Such irony proves once again that politics under capitalism as a whole is a mere shadowplay of lies and trivia serving only to distract the proletariat from its dreary alienation, and preserve its sequacious march off to the daily moil of insipid wage-earning. To buy someone's soul, you first have to convince a person the soul does not exist.
Yea! So I suppose that blanket crack on all politics under capitalism applies to your blog, too, and now we have the lifeblood of a blog, pointless squabbling.
Yep, I agree on the "pointless squabbling" The end discussion with energy is conservation, conservation and conservation.
All the papers I read; The Wall Street Journal, Chicago Tribune, and a few others all agree that drilling will have no effect on prices at the pump right now. The only reason the line from the government is, "drill to get gas price relief" is that it is easier to sell that to the public then selling energy security and economic losses. From what I understand the "real" reason for the drilling is to try to reduce some of the 700 billion dollars that we are sending each year to despotic regimes that control 70% of the proven oil reserves in the world.
Plus those who say it would effect the price at the pump may actually be correct as allowing drilling in the States would act as an economic stimulus that combined with conservation, and alternative energy technologies would strengthen the U.S. dollar and thus reduce the price of oil since a weak dollar has contributed to these record prices.
But Amory Lovins on Charlie Rose speaks much better about the economics of oil drilling. I believe one of his points was that even if these new areas were opened the oil companies themselves would not chose to drill there as it is still bad economics for them. So I don't know who the %*&@ to believe all I know is all these energy discussion are distractions from the hard truth of!!!... Conservation, conservation, conservation. There is more oil to be found in Detroit each year than all that we import from Saudi Arabia in a year!!!
http://www.charlierose.com/home then hit on the Amory Lovins interview.
It is about half an hour but really is a good overview on the current, and future state of energy.
"I'm not worried about America being respected throughout the world I'm worried that it be thought competent"
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