Short version - October, 2008
America faces great challenges, all linked to energy: reviving our economy, restoring our national security, and reversing climate change. Everyone agrees that we’re in the midst of an energy crisis, those who act without understanding the basis of that crisis will only make matters worse. Advocates for more oil drilling would have us futilely prop up old choices that can’t work and are already failing. We must end our dependence on the oil and other carbon-based fuels of the past. Unveiling three energy secrets, now hidden in plain sight, will help us make the right choices. The future belongs to those who harness the clean, permanent power of wind, sun and water. America can either lead this progress, or be left behind. Here’s some background.
- The world uses around 86 million barrels of oil every day.
- America, with less than 5% of the world’s population, uses around 25% of that amount. That’s nearly 21 million barrels of petroleum per day, or 7.5 billion barrels per year.
- Of the crude oil consumed in the U.S., 66% is imported.
- The U.S. is on track to spend over $500 billion on petroleum imports in 2008.
- U.S. oil production now comes from onshore in the lower 48 states (2.9 million barrels per day (mbd)), offshore (1.4 mbd, mostly in the Gulf of Mexico), and Alaska (0.7 mbd).
- Total U.S. proved oil reserves are estimated at 21 billion barrels—less than a 3 year supply at the current rate of consumption.
- The U.S. Geological Survey estimates that 10.4 billion barrels of oil are technically recoverable in the Arctic National Wildlife Refuge (ANWR)—less than one and a half years of consumption.
Secret #1: Offshore drilling has been debunked - by the Bush Administration
The claim that more domestic drilling can be our salvation has already been debunked – by the Bush Administration’s Energy Information Agency. Its report, “Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf,” is available online at www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html. No one knows about it. A study of 267 television and cable news programs this summer found the study was mentioned exactly once.
- It would take at least 10 years before any new oil would come to market.
- Maximum Outer Continental Shelf (OCS) output would be 200,000 barrels/day.
- 200,000 barrels/day is 1% of our daily 20 million barrel consumption.
- Here's a chart that shows just how little that really is.
- EIA says new OCS production will have no effect on prices.
- The real production is likely to be much lower. We’re not certain where that oil is and how much we could get.
- States have veto power for offshore drilling. About half of OCS resources are off the coast of California, where both Governor Schwarzenegger and the State legislature oppose offshore drilling.
- OCS areas already open for drilling have quadruple the oil and gas potential of the moratorium areas.
Secret #2: the world’s oil supply is dropping faster than new oil can be found
- Oil is not a renewable resource.
- Oil fields reach a peak of production, then decline.
- Around 1970, 40 years after discovery peaked, US oil production peaked and began to decline, which is how we became hooked on ever larger quantities of imported oil.
- Decades of increasingly high-tech exploration have not affected the steady drop in discovery of new oil fields since the world oil discovery peak in the 1960s.
- World oil production is expected to peak around 2010, and begin decline soon after that.
- Our top five sources of oil imports are Canada (1.960 mbd), Saudi Arabia (1.661 mbd), Mexico (1.2 mbd), Venezuela (1.187 mbd) and Nigeria (0.741 mbd).
- Because of geological depletion, political instability, or both, oil imports from each country are at risk.
- Any potential new US production is dwarfed by falling production from other areas.
- In the last year, production from Mexico’s Cantarell, the world’s third largest oilfield, dropped 34%. Between July 2007 and July 2008, Mexican imports to the US dropped more than 250,000 bpd - more than domestic offshore drilling will give us in 20 years.
Secret #3: CNN: oil price shocks and supply disruptions are on the way
- Matt Simmons, Republican CEO of an energy investment banking firm, told CNN that the recent drop in oil prices is an illusion, and it will climb to $200, $300, or even higher.
- Simmons wrote a book predicting that Saudi oil supplies were headed down. He foresaw oil heading over $100 a barrel back in 2005, when it was only $58 a barrel.
- Many observers agree, including the US Army Corps of Engineers and the US Governmental Accountability Office and independent geologists.
- Even before oil production declines, disruption of supplies from a major oil exporter, whether through terrorist attack or natural disaster, would cause a rapid price spike.
- Straight talk about future constraints will motivate everyone, even global warming deniers, to adopt conservation and efficiency initiatives politically impossible today.
- Neither McCain, Obama nor Mayor Bloomberg have said a word about the need for contingency plans for fuel supply disruptions.
- When these factors are understood, it’s clear that we must completely transform our society around new 21st century energy choices. Although we must move beyond oil as quickly as possible, it will still be an important resource. Used carefully, oil will enable the transition to clean sources of power.
The green way forward: conserve, evolve, transform
- Conservation and efficiency offer the fastest opportunities. Energy efficiency retrofits of homes and buildings will save money and create jobs.
- The increase in U.S. automobile fuel economy standards to 35 miles per gallon of gasoline that passed in 2007 is projected to save more than 1.1 million barrels of oil per day in 2020 - roughly half of current U.S. imports from the Persian Gulf. We have the technology to raise standards higher and faster. We can rebuild Detroit, lower transportation costs, and clean the environment, all at the same time.
- We can scale up solar, wind, biofuel, tidal and geothermal power to replace fossil fuels and create clean, cheap energy here at home.
- Electrifying the U.S. transportation system and restructuring urban transport could cut petroleum consumption by over 50 percent, nearly eliminating the need for imports.
- Wind-generated electricity could power plug-in hybrid cars, such as GM’s prototype Chevy Volt, at the equivalent of less than $1 per gallon of gasoline.
- Targeted investment will restore domestic manufacturing and create millions of green jobs that can’t be outsourced.
Stuck in the past: outdated strategies that won’t work
When these factors are not known or denied, the natural tendency is to stick to the old answers, and obsessively pursue oil wherever we think it may be located. The gap between declining oil supply and still rising demand will grow, increasing economic and military competition for what’s left. Countries with large remaining fuel supplies, such as Russia, Saudi Arabia, Iraq, and Venezuela, will gain power over those still reliant on fuel imports. Their leaders must be delighted to hear some Americans demand continued dependence on fuels of the past, instead of leading the world economy toward a clean tech future. Regardless of any moral questions, or opinions about the current conflicts, trying to gain military control of world oil supplies won’t work.
- We’re already fighting in those areas, at tremendous cost.
- We haven’t gained political stability for the region.
- We haven’t increased or secured oil supplies.
- Our involvement has weakened America’s standing in the world.
- Pursuing this strategy will drive us to pick fights we can’t win – and can’t afford
Neither Obama nor McCain are as green as they claim. Both misleadingly blame speculators for the rise in oil prices and support the fiction of clean coal, but there are vast differences. On renewable power, McCain’s words and record don’t match. He deliberately avoided voting on all eight attempts to pass a bill extending tax credits and subsidies vital to expanding our wind and solar industries, and has voted 50 times against clean energy in the Senate. Despite the windmills in his ads, McCain has said that he doesn’t think that clean energy like wind and solar can work. McCain likes to talk about global warming, but picked a running mate who doesn’t believe in it. "John McCain is energy illiterate," Matt Simmons told CNN. "As a lifelong Republican, I'm supporting Obama."
Delaying the inevitable transition beyond oil will only make it more costly. For their own reasons, Obama and McCain aren’t addressing the energy secrets, but we can. Only by acknowledging the full scope of our energy dilemma will we be able to generate the broad public support needed to implement a 21st century energy policy – and to buckle our seatbelts before we hit the potholes ahead of us. In this case, knowledge is literally power.
Click here for an expanded version of this article, with links to references.
beyond oil
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