Oil now and oil tomorrow
By Alan Caruba
Between January and this month, the cost for filling my car tank has doubled. People ask why. The answer is that years of effort by environmental organizations have finally paid off, placing so many restrictions on this nation's ability to keep pace with its energy needs, that everyone will now pay more and maybe, in the process, figure out who to blame.
You cannot "conserve" energy by simply not using it or using less. The ultimate "conservation" would to stop mining coal and stop drilling for oil and natural gas. The modern world runs on these sources of energy. Cutting back on their use means less electricity, less fuel for automobiles, trucks, and planes. The United States is a powerful economic machine because that machine runs on energy.
Despite the naysayers, there is ample evidence that vast, often as yet undiscovered, reserves of energy exist.
On Earth Day, two New Jersey politicians held a press conference to announce they would re-introduce legislation to make it more difficult for States to permit offshore drilling for oil. There are unknown, but presumably vast reserves of oil off the coast of New Jersey and, of course, we know that such reserves exist off the coasts of California and Florida, two States that have resisted drilling, although some does exist.
You can't get around any State without a car. A huge highway system is testimony to the nation's reliance on autos for personal transportation and trucks to move the bulk of all food and other goods on which we depend. All of this requires a lot of gasoline and diesel fuel. Where are we going to get it if we do not drill for the oil that exists throughout the nation except to import more and more oil from other nations?
For example, we import oil from Canada that is derived from shale deposits. Canada has invested heavily in tar sands technology to reap oil from Alberta. Clearly it has paid off, but did you know that Utah, Colorado, and Wyoming "sit on a massive fortune in untapped oil—maybe more oil than in the Middle East"? An April 13 news article in the Deseret Morning News reported that the Senate Energy Committee held hearings on the "vast reserves of oil found in tar sands and oil shale located in eastern Utah, western Colorado, and southern Wyoming. ‘The amounts of oil,' said Sen. Orrin Hatch, R-Utah, ‘are mindboggling', but this oil is not regarded as part of our nation's oil reserves because it has not yet been developed commercially."
The reason for this is the cost. However, as the cost of a barrel of imported oil reaches $50 and is likely to stay there, an investment in the technology to extract it from shale begins to look feasible and sensible. I once sat beside an oil company executive on a flight and never forgot his comment that, "If we were ever to begin to run out of oil, we'd be sucking it out of telephone poles." We don't have to do that. The world is not running out of oil. We have oil offshore. We have capped oil wells that are not in use. And we can import from reliable suppliers.
The energy bill that was passed by the House of Representatives is seriously flawed in many ways, but it does provide $8.1 billion in energy tax breaks, including $2 billion, to increase research into drilling in the Gulf of Mexico for oil and gas, and $2 billion to the manufacturers of MTBE to help defray the coast of phasing out the product, a gasoline additive, that is now known to contaminate drinking water.
Right now, the oil refineries in the United States are running at 95 percent of capacity. A succession of "environmental" regulations has succeeded in reducing the nation's capacity to refine oil into gasoline. Among them is the requirement for more than forty different "blends" of gasoline. Today, only 149 refineries produce 16.8 million barrels of gasoline. In 1981, there were 321 refineries producing 18.6 million barrels.
The National Petrochemical and Refiners Association forecasts that eight to ten new refineries are needed to keep up with current and future demand. Each refinery is estimated to cost $2.5 billion and take up to seven years to build and complete. There's a catch though. Environmental regulations would require as many as 800 different permits. The NPRA estimates that regulatory costs over just the past decade reached $47 billion.
You can have gasoline for your car or you can leave it in the garage because this nation has failed to authorize access to known reserves of oil and has foisted a matrix of regulations that make it too costly to refine it. Remember, too, oil and natural gas is used to heat homes and as fuel for many manufacturing facilities. Our reserves of coal are so vast as to meet our needs for centuries to come and there are processes that can transform coal into gasoline.
Our politicians in Congress seem oblivious to this. Instead, a gaggle of midwestern lawmakers introduced a new ethanol mandate that would require that eight billion gallons of gasoline use this corn-derived fuel additive. The bill may not pass, but if it does, big ethanol producers will benefit, but everyone who drives will find the cost of gasoline has increased for no good reason.
Sen. John McCain (R-AZ) and Sen. Joe Lieberman (D-CT) have introduced the Climate Stewardship Act that would restrict the total amount of petroleum and other fossil fuels that can be used in the US. This is nothing more than the rejected UN Climate Control "Kyoto" protocol. It is based on the belief that global warming is occurring. It is not. The Earth is not experiencing any kind of significant warming. We are in an interglacial period and, if any weather change occurs millions of years from now, it will be the return of an Ice Age that nothing will deter. The Earth is 5.4 billion years old and has gone through warming and cooling cycles for all of that time.
Restricting or "conserving" energy use will only serve to plunge the whole of humanity into an era the modern mind cannot even conceive. Current efforts to deny Third World nations to modernize keep more than two billion people without electricity. Their populations die young from disease and starvation. It is all preventable.
It is totally irrational to ban access to known reserves of energy anywhere on the face of the Earth. It is totally irrational to thwart the building of facilities to extract and refine it. It is totally irrational and yet it is happening here and elsewhere around the world. It foretells the collapse of economic systems. That is the goal of those for whom the decimation of the human race is the only logical way to "save" the Earth.
Alan Caruba writes a weekly column, "Warning Signs", posted on the Internet site of The National Anxiety Center. © Alan Caruba, April 2005
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