Nero's Fiddle
A View From The Handbasket

Tuesday, April 29, 2008
The 5% solution (Updated - now 3.75%. Or maybe 0.2%)
Posted by neros_fiddle at 2:37 PM
As the grumbling from the SUV-driving masses gets louder, and the media start talking about $10 a gallon gas, President Bush was drug into the Rose Garden this morning to announce his bold plan for averting energy-based economic catastrophe: blame Congress.

Americans are concerned about energy prices, and I can understand why. I think the last time I visited with you it was like -- I said it was like a tax increase on the working people. The past 18 months, gas prices have gone up by $1.40 per gallon. Electricity prices for small business and families are rising, as well.

I've repeatedly submitted proposals to help address these problems. Yet time after time, Congress chose to block them. One of the main reasons for high gas prices is that global oil production is not keeping up with growing demand. Members of Congress have been vocal about foreign governments increasing their oil production; yet Congress has been just as vocal in opposition to efforts to expand our production here at home.

They repeatedly blocked environmentally safe exploration in ANWR. The Department of Energy estimates that ANWR could allow America to produce about a million additional barrels of oil every day, which translates to about 27 millions of gallons of gasoline and diesel every day. That would be about a 20-percent increase of oil -- crude oil production over U.S. levels, and it would likely mean lower gas prices. And yet such efforts to explore in ANWR have been consistently blocked.

A million barrels a day? Whoopee! The US uses about 20 million barrels a day, so ANWR represents a whopping 5% increase in supply (assuming we don't export anything). That'll break the back of the problem, yes sir. We could probably cut consumption by that much if everyone made sure their tires were properly inflated.

And that million barrels assumes you could bribe any of the oil companies to go drill for oil there in the first place. They don't seem particularly interested:

A Bush adviser says the major oil companies have a dimmer view of the refuge's prospects than the administration does. "If the government gave them the leases for free they wouldn't take them," said the adviser, who would speak only anonymously because of his position. "No oil company really cares about ANWR," the adviser said, using an acronym for the refuge, pronounced "an-war."

Wayne Kelley, who worked in Alaska as a petroleum engineer for Halliburton, the oil services corporation, and is now managing director of RSK, an oil consulting company, said the refuge's potential could "only be determined by drilling."

"The enthusiasm of government officials about ANWR exceeds that of industry because oil companies are driven by market forces, investing resources in direct proportion to the economic potential, and the evidence so far about ANWR is not promising," Mr. Kelley said.

But who cares about that? The President has decided that ANWR represents the solution to high gas prices:

And yet this is a litmus test issue for many in Congress. Somehow if you mention ANWR it means you don't care about the environment. Well, I'm hoping now people, when they say "ANWR," means you don't care about the gasoline prices that people are paying.

(At least I think that's what he's saying. Even after eight years, his mangled syntax still flummoxes me.)

An extra million barrels of oil a day (which is an optimistic figure in the first place) isn't going to matter when the world consumes 80 million barrels a day and demand from India and China will drive it to 100 million or more soon. (Assuming the supply is there -- most people who know about these things don't think we'll ever manage to produce even 90 million barrels a day.)

Anyone who claims the solution to high energy prices is to be found in expanding petroleum production isn't being serious. At best, you can maintain the status quo. At worst, you're squandering resources that should be used for developing non-petroleum energy sources.

Telling people that gas prices can be brought back to turn-of-the-century levels is pure and simple negligence of duty. People should get used to the idea that cheap oil is over, and their lives are going to change in ways they're not going to like. The longer we live in denial, the worse the wake-up call will be.

Later edit: It's even dumber than I thought. According to this analysis, even if ANWR had been opened up in 2002, we wouldn't be getting anything out of it until 2011 at the earliest, and even then it would only be a measly 40,000 barrels a day. (Or about 0.2% of current consumption.) By 2020 we'd get a rip-roaring 780,000 barrels a day, only 3.75% of the *current* US consumption of 20 million per day. (This would slash our import dependence from 62% all the way down to 60%.)

That oil will be useless in 2020, for one of two reasons. Either (a) we'll have successfully cut our consumption (either via science or non-catastrophic economic collapse) thus making that trickle of oil unnecessary, or (b) we'll have collapsed so hard under the weight of oil shortages that there's no economy left to fuel, and the additional oil will get exported to the capital in China.

Housekeeping note: Over the next few weeks, I'll be dropping the ISP that provides my current web hosting, so many of the pretty pictures will go away temporarily. I'll move some/most of them to new digs and change the links as I can. I know you read for the articles anyway (at least, that's what everyone says).

0 comments on this post