We are not addicted to oil, but we are dependent. So is the rest of the world.
There’s a new book, A Thousand Barrels A Second, by Peter Tertazkian, that paints a very scary scenario about the oil industry and energy options in the future. When I read such books or the daily headlines in newspapers or in news magazines, I keep reminding myself that bad news sells.
Tertazkian’s book is actually quite interesting and appears to have been well researched from open sources. The author is the chief energy economist and director at ARC Financial Corporation, identified as “one of the world’s leading energy investment firms.” His book is devoted to the concept of “peak oil,” that indeterminate day when the world’s known reserves of oil begin to decrease and the view that there will be few others to replace them.
The “peak oil” concept is a fallacy. On at least five occasions in the past, the world has been informed that it was running out of oil. Tartazkian’s book asserts that, “We’re on the verge of a tipping point in oil…a break point.” However, the author does say, “We’re not running out of oil, but the oil we need is getting harder to find.” This is true.
A case in point is a new field near Sakhalin, a remote island off Russia’s east coast. American, Japanese, Indian, and Russian oil companies funded the project which now taps a field that will yield some 250,000 barrels of oil a day by the end of this year, along with some 60 million cubic feet of natural gas. Additional fields in the pipeline include Chayvo, Odoptu, and Akutun-Dagli. Overall, more than five billion oil-equivalent barrels of energy are anticipated.
Here’s what most people still don’t understand. It took some ten years to make this happen and involved “slant-drilling” for 20 miles to tap the Sakhalin field. This is an extraordinary technological achievement and a very expensive one. If we began today to drill in Alaska’s ANWR, it would take about the same time frame before Americans could benefit from their own oil. So far, the U.S. Congress has managed to stymie this effort for decades!
Civilization has gone through various stages of dependency on different forms of energy. Domesticating animals like oxen and horses was the first breakthrough. People burned wood for a very long time, then coal. The British Empire was built on the availability of coal. They were, for a relatively short time, “energy independent.” Then in 1859 came oil. Middle Eastern oil discoveries in the early part of the last century transformed whole economies and launched an effort by Western nations to secure control of it.
The President, in his State of the Union speech, said America was “addicted to oil” and urged that we undertake more research to achieve “energy independence.” What he didn’t mention is that America imports oil from sixty different nations, not just the Middle East. His solutions, too, left me less than thrilled. Can you imagine how many acres of land we’d have to plant to produce enough corn to make ethanol as a gasoline additive? This is a boon to farmers, but does little to address the need for oil.
It is true that Americans and the West send billions of dollars to the Middle East, enriching a few despotic governments who use that money to finance a global jihad. Getting control over a crazed and volatile Middle East might account for why U.S. troops are in Iraq. If you want to gas up your car, you might want to think about the benefits of having some influence over a nation with the second largest reserves of oil in the region.
The concept of “peak oil” has been around since the 1950s when it was first proposed by a Shell Oil geologist. New oil fields have been found since then and the effort to find others continues in order to meet the anticipated world demand of 120 million barrels per day in 2025.
As noted, bad news sells. Americans need to keep in mind (1) that all the oil that exists around the planet has not been found, (2) that new technologies will make its extraction possible and (3) will greatly improve the use of what exists. Our national energy concern should be focused on oil in terms of the essential role it plays in transportation. Failure to keep our cars and trucks on the road would imperil our economy. Ultimately, all goods move on wheels.
The world is filled with some really unpleasant people; some of them are in charge of nations like Iran, Venezuela, and Nigeria, where the government controls production. However, the minute they stop exporting to us and other nations, they are in big trouble. They need us as much as we need them. And governments change.
The largest supplier of oil to the United States is none other than Canada. The discovery and development of oil-tar fields has enabled this. While the U.S. is home to vast shale-oil reserves, the cost of its development and extraction is still too high for the large oil companies to contemplate. That day, however, is coming and, when it does, trillions of barrels of oil trapped in that rock will continue to fuel our energy needs.
It doesn’t help when President George W. Bush, an oilman and son of an oilman, says during his State of the Union speech that America is “addicted to oil.” We are not addicted, but we are dependent. So is the rest of the world. And, remember, it’s an election year. The President’s advisors study the polls.
James K. Glassman, writing for Tech Central Daily on February 2, called the President’s statement “dangerous.” I agree. Telling Americans that solar or wind technologies can take up the slack in our need for energy is nonsense. These heavily subsidized technologies represent about one percent of all the energy we use. That’s because they are astonishingly ineffective.
Telling Americans we can “conserve” our way out of our dependency on oil is absurd. The President’s suggestion that hydrogen will magically become an energy source has no basis whatever in reality and is little more than a cruel hoax. Hydrogen is not an energy source; it is an energy carrier, and a very costly one at that. It may, at some point, however, become useful for hybrid car production on a larger scale, thus reducing the use of gasoline as their only fuel source.
The scary news purveyors are having a field day. In the March edition of The American Enterprise magazine, Robert Zubrin says that the only way to “liberate ourselves from the threat of foreign economic domination, undercut the financiers of terror, and give ourselves the free hand to deal with Middle Eastern extremists” is to devalue their oil resources. “We can do this by taking the world off the petroleum standard and putting it on an alcohol standard.” An essential step, says Zubrin, is to “simply pass a law stating that all new cars sold in the U.S.A. must be flexible-fuel vehicles capable of burning any combination of gasoline and alcohol” in the form of either ethanol or methanol.
Ethanol is made from agricultural products. Those products have to be grown somewhere in the world and are subject to all kinds of problems such as drought, grasshoppers, weeds, and plant diseases. Methanol can also be made from biomass, as well as from natural gas or coal. This is the kind of beguiling notion that sounds great on paper but doesn’t work in the real world.
Whoever becomes the next President of the United States is going to have to make some major decisions to insure that this nation remains the superpower it is, economically and militarily. Insuring that America has enough energy for the foreseeable future, however, is going to be the single, most important decision of all.
Alan Caruba’s article contains a great many truths. However there are several points he makes that I dispute. First of all, I am not a tree hugger and am not convinced that any global warming is directly related to human activities. For example, what human activities caused the Middle Ages warming period and then what human activities caused the Little Ice Age of 1350 – 1850? Currently many people maintain human activity is causing the Earth’s atmosphere to heat up due to the burning of fossil fuels. This thinking has concluded the United States must change how the nation uses energy. The environmentalists further claim we have to switch to alternative energy sources, i.e. wind and solar because such power production methods don’t produce carbon dioxide emissions. The proposed solutions, solar and wind, are not yet practical except for small scale applications and ignore real life realities. For example, one website, http://www.hydrogencommerce.com, laments that Big Oil is out to stifle renewable energy development. Conversely, an article by Gene Bylinsky in Fortune posted on hydrogencommerce.com’s web site states wind is not being used because it is currently uneconomical to transport the wind-generated electricity to population centers. REF: (Bylinsky, Gene “How GE Captures New Energy Markets” Fortune December 12, 2005.)
Furthermore, environmentalists short-sighted actions have prevented oil companies from searching for oil on United States territory. I support the removal of such obstacles to developing oil and natural gas resources on United States territory and offshore holdings. I support drilling in the Artic National Wildlife Refuge. In today’s war on terrorism, we can’t afford to ignore an available resource merely because it is a “pristine wilderness.” That being said, the reality that we can’t drill in those locations is not going to change any time soon. We should then develop alternative fuels that can be produced here in the United States of America. Such fuels should be produced merely to offset certain geopolitical considerations. The observation was made the oil producing nations would suffer if they didn’t sell any oil. However, conditions may arise that could lead to certain nations to stop selling petroleum either by choice or due to conditions that were forced upon them. First, what if Al Quida should successfully mount a coordinated attack on oil fields throughout the Middle East, or only in Saudi Arabia. What would that do to the world price of oil and what would be effect on the American economy and the overall world economy. Demand for oil is at an all time high and is not going to diminish if the status quo is maintained. The overwhelming majority of proven reserves are located in the Persian Gulf, a volatile portion of the world. Should Saudi Arabian and/or the Persian Gulf oil be removed from the world market, the rest of the world will be competing with the United States for the remaining reserves. Secondly, OPEC has at least once successfully embargoed the U.S., during the 1973-1974 time period causing significant domestic problems. OPEC attempted an embargo in the 1967 Arab-Israeli Six Day war, but American oil imports were not large enough for the embargo to cause an economic disruption. Should the Iran-Israel situation escalate to dramatic proportions, it is possible for elements of OPEC to unite against the United States for an embargo or Iran could blockade the Persian Gulf on its own because it has nuclear capability, paid for by petro dollars.
The multi-prong effort President Bush has proposed goes far to address our oil dependency. But in all cases, the technology is not yet ready. It is still some years off. For example, efficient ethanol production needs time to develop. Current ethanol production comes from corn. The President proposed the development of technology whereby ethanol would be produced from cellulose derived from crop and forest waste. The U.S. Government has estimated that there exists a billion tons of crop and forest wastes which could be used to provide 30% of the nation’s yearly gas needs. REF: (Http://news.yahoo.com/s/nm/20060224/sc_nm/bizfeature_energy_et)
The author’s argument that we shouldn’t research hydrogen fuel cells because the research is doomed to failure is willfully short-sighted, or at best ignorant of history. One hundred twenty years ago, the cry was: Who needs horseless carriages? There are steam engines and horses to move goods and people. It was also questioned as to the practicality of heavier than air machines. Besides what is the need for heavier than air machines? There are lighter than air vehicles that can move cargo and people. Then when airplanes came into existence, it was said airplanes carrying hundreds of people and tons of cargo across the oceans were wholly visionary. To paraphrase Mark Twain, the person with a new idea is a Crank, until the idea succeeds.
To say the research is doomed to failure is refuted by a survey of technology websites. One company has developed a catalyst made of inexpensive materials that can replace the platinum used in fuel cells. REF:( http://www.qsinano.com.) And the hydrogen technology is not just being developed in the United States. A team of researchers at the Technical University of Denmark has developed a hydrogen fuel tank that is no bigger than the standard gasoline tank and gives the car a 300 mile range. REF: (www.fuelcellworks.com 06-September-2005). Another emerging possibility is the methanol fuel cell. However, the methanol fuel cell is still in development. Like hydrogen, methanol is not a source of energy. It is a means to store energy. Yet, if one has water and carbon dioxide, electrical power can be used to chemically reduced the water and carbon dioxide to produce methanol. REF: (www.fuelcellworks.com 02-March-2006). The new nuclear power plants proposed by the President could provide the electricity to make methanol. Overall, hydrogen/methanol fuel cell technology is still not ready for mass marketing, but that should not stop us from trying. After all, then President Nixon declared war on cancer in the early 1970s. Should we stop because the war is still not won.
Petroleum will be an important fuel for many years to come. Petroleum took about 50 years to replace coal as the primary fuel, and that process was accelerated by two world wars. It will still be a number of years before fuel cell/cellulose ethanol technology is widely available. In the interim we should develop all the oil resources available on U.S. territory. However, the author’s argument that the status quo in energy technology should be maintained is untenable. Technology marches on in a natural progression. The steam engine replaced the horse, the internal combustion engine replaced the steam engine, and the fuel cell will replace the internal combustion engine. The author argues technology does not need to be advanced due to the fact there actually is an ample supply of oil and if only if we are not self-restricting, there would be oil supplies for years to
come. I am not prepared to argue the supply is finite. What I am saying is we should diversify our fuel supply rather than depend solely on one commodity. Several nations that produce this commodity are hostile to our way of life. Countries having large populations also desire that commodity. And they in turn buy petroleum from those hostile nations who turn around and use the sales proceeds to further their own self interests. This nation’s dependence on foreign oil is a weakness that can be used to our detriment. We should diversify the energy supply to minimalize the potential impact from world market disruptions. Development of every potential oil field in the U.S. as well as improving enhanced oil recovery from depleted fields and developing alternative fuels should be accomplished.
I am not trying to scare people. I am attempting to describe what the state of things is. I am offering a hopeful alternative.
Finally, as a historical note, the rulers of the Middle East have been reduced to irrelevancy once before. Prior to 1500, the trade routes to India and China went through the Middle East lands. The inhabitants extracted a high price to transverse their region. Why not? There were no other ways to get the goods. When an all-water route around Africa to Asia was discovered, the Middle Eastern inhabitants became irrelevant. Develop alternative fuels, and other oil consuming nations will also adopt the alternative fuels. Once again the Middle Eastern governments will become irrelevant. They will be loaded with a product that has little demand.
gee – back in the 70′s that ole p-nut freak started us on a road to non oil energy independence. problem was, it involved a long term commitment and showed precious little short term profit potential. we don’t cozen to the long term sort of tinking, however. so when reagan got elected, and iran and iraq got into a bloody war, thereby precipitating an oil cost undercuting that temporarily brought oil prices down, we kind of stopped planning for an oil free future…the lie is that we could not be virtually oil free now if we had not acted like a bunch of silly grasshoppers. the truth is we chose short term windfall gains and to hell with the next generation.