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May 01, 2005
Treating an Oil Addiction
John Cole's got a sensible post on the need for a new energy strategy, but I think he forgets that he doesn't have a sensible party:
It never ceases to amaze me how silly many on the left are about the prospect of drilling in ANWR. Any reasonable solution to our dependence on foreign oil should include:
1.) Domestic drilling
2.) Research for alternative fuel sources
3.) Increased Cafe standards
4.) Radical improvements to clean Coal
5.) Nuclear plant construction and research in storage of nuclear waste
6.) Tax credits and incentives for fuel efficient vehicles, energy efficient appliances, energy efficient homes
7.) Increased refining capacity
8.) Increase oil exploration and smart extraction policies
9.) Conservation campaigns
Exactly right. But here's the problem -- Bush's energy strategy doesn't include that. If Bush stepped forward with that energy strategy -- particularly an increase in CAFE standards -- I'd kill the goddamn caribou myself to help it pass. But he's not. There's been no increase in CAFE standards, no effort to promote conservation, no coherent effort to construct an incentive structure that values fuel-efficient vehicles over inefficient ones, and not enough money to research alternative fuels.
Our addiction to oil is a problem that gets worse the longer we keep it. So the worry of many liberals, myself included, is that ANWR is just another attempt to delay the energy reckoning, and in so doing we'll be make that inevitable day much harder. To complete the addiction comparison, if my friend's terribly addicted to cigarettes and wants to quit, buying him another carton so he can smoke a reduced number each day, if I do it in addition to counseling and gum-chewing and nicotine patches and whatever else, might make sense, but simply buying him another carton of cigarettes without any of the treatment aids that'll help kill his addiction makes no sense at all. ANWR, on its own, doesn't make sense, it's simply a way to feed our addiction. That doesn't mean I couldn't support it as part of a better package, but it does mean I can't support it now.
Update: To be clear, I don't think we should drill ANWR, and in a perfect world I'd prefer we didn't. But despite my opposition, I do realize that a workable energy package will need to satisfy those who believe we should still be drilling towards independence, not only those who argue for the end of fossil fuels. As such, I'd support ANWR in order to pass a larger, more visionary package. That package, however, has not materialized, and until it does there's no good reason to support drilling the ANWR.
May 1, 2005 in Energy | Permalink
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Comments
Oh, the caribou!
ANWR is mostly not about more oil in the dim future. It is about fucking the conservationists and others (like John Cole) who are rational about changing the energy equation.
Why do dogs lick their tender parts? Because they can.
Why does Bush talk oil nonsense? Because he can!
Just count up the issues, national and global, where our policy can be explained by:
"It's the oil, dummy!"
Posted by: JimPortlandOR | May 1, 2005 4:15:10 PM
I would like to remind your readers that the drilllng in ANWR amendment that passed in the House budget resolution only allows for drilling in the 2,000 acres that were set aside for this very purpose in 1980.
So what's new?
Posted by: Robert Zimmerman | May 1, 2005 4:17:55 PM
Ezra, another thing worth noting is that the heavy, sulfurous crude oil that will come from the ANWR is more expensive and difficult to refine into useful fuel than the lighter, sweeter crudes that the market has tended to rely on. So is a lot of the remaining oil supply, all of which is going to have both an economic and environmental impact of its own. Here's one analyst's take on the economic side.
Posted by: nolo | May 1, 2005 4:21:13 PM
There's been no increase in CAFE standards.... Suggestion: If the gummint doesn't want to enforce gas efficiency standards by fiat, allow the manufacturers to make guzzlers but just tax them more. Say, a federal excise tax of $300 per city-miles-per-gallon under 25 mpg on the purchase of all vehicles. So you can have that 10 mpg Hummer, but it'll cost you an extra $4500. Increase the mpg threshhold by 1 mpg and tax $100 every other year, and see if that pushes the right behavior.
Posted by: David Weigel | May 1, 2005 5:27:38 PM
Bush pushing for the drilling of oil in ANWR is like a junkie turning over the sofa cushions to see if he can find enough quarters to buy another hit -- futile and pathetic.
Meanwhile, fastfood restaurants all over the country are paying to have their waste vegetable oil disposed of. Oil that could be fueling diesel cars with very little modification. No, I'm not saying that french fry by-products are the answer, but what we are doing is throwing lots of energy away in all sort of places.
Lefty scientists or just people more knowledgable than I should start using "the ANWR" as a unit of energy. Such as, "if Americans improved the fuel efficiency of their vehicles by X%, we would be saving x ANWRs worth of energy in 10 years."
Posted by: battlepanda | May 1, 2005 5:37:52 PM
Well, we all know the ANWR drilling thing isn't about solving our oil crisis. Its about Bush's venture capitalist buddies getting rich. Just like pretty much every policy Bush has ever pushed hard for. If privatized social security ever does come to pass, I'm willing to bet at least one of the people put in charge of it was somehow involved with the S&L scandals of the early 90s.
Posted by: Regault | May 1, 2005 6:04:29 PM
I would allow drilling in ANWR so long as oil companies pay for it themselves. No "National Energy Independence Tax Credits" or anything like that to help them set it up. Somehow, I suspect that that's not how it would work in the Bush administration.
Posted by: Julian Elson | May 1, 2005 6:14:27 PM
The fight over ANWR is less about its oil and more about beating down environmentalism and making the GOP's goals appear inevitable. Republicans beat this bill through Congress more for appearance's sake. Oil companies aren't exactly clamoring to drill in ANWR because it's damn cold, in the middle of nowhere, and the oil reserves are comparatively negligible. Drilling in ANWR simply doesn't have a particularly good cost:benefit ratio.
Posted by: Eric | May 1, 2005 7:59:35 PM
I have to agree with Eric, the ANWR game is much more about smacking down the environmentalist left while the smacking is good than it is about reducing our reliance on foreign oil.
What it does do is reinforce the idea that the answer to our energy issues is to simply go out there and find more oil. "Don'tcha worry 'bout that there SUV's milage, honey, we'll just find us some more of that Texas tea!" Not such a good idea, really. First of all, we're already in a pretty uncomfortable position re: foreign oil, and if our consumption continues to increase, that'll only get worse. Secondly, we're about to see major competition in our thirst for oil, China. As China's consumption and needs grow, we'll need to reduce our needs, or pay a premium to have the same access to the market we do now.
Of course there's another option - find another energy source, preferably one that's domestic, and even better - one that's exportable. Wouldn't it be just great to not only not be importing oil, but be exporting it? How? Every fly cross country? There's a LOT of farmland out there, and a lot of energy bearing agricultural products - many which we already subsidize. So why not throw some money at finding smart, energy and environmentally conscious ways to converting some of that into fuel.
Posted by: Brew | May 1, 2005 8:54:12 PM
I could understand trading some limited exploration and drilling in ANWR as part of a comprehensive package including all of the conservation efforts listed by Cole. As it stands now, we are probably going to get the drilling without the conservation. Unfortunately, too many of our politicians have been bought by the oil and auto lobbies. The real scandal in congress is all the legal ways to bribe representatives. Cole's package would represent the "best" deal possible for the next several years. Expect worse.
Posted by: marvyt | May 1, 2005 9:04:25 PM
RZ...I followed your link to the Milwaukee Journal Sentinel article. I would caution against accepting it uncritically. For one thing it is not a fact piece, it is an opinion piece that verges on being a polemic and came from a rightwing thinktank
For a factual approach – and that should be the standard, not political bashing, there are good analyses around, but I found Scientific American’s April 2001 weighing of expert opinion pro and con to be sound and unbiased. Yes, it is four years old, but there has been little or no new physical data to alter it considerably.
To the best of my recollection (salient points still check), the conclusions I drew from the data were these:
• The 2,000 acre area was for exploration. Production would be considered later, although slant drilling beyond the area would be acceptable.
• Because of the formidable difficulties of access, initial production is expected to take at least 10 years, and peak production 20-30 years after that.
• Output was realistically expected to be one million barrels per day at peak – a long time to wait for relief. Remember we currently consume 21 million barrels per day and growing.
• All movement of machinery, supplies, equipment and personnel has to be trucked in on ice roads and only during winter months. Trucks are unable to move the rest of the year. The water to construct ice roads is pumped into tanker trucks from sources deep under the ice that are still free-flowing, which are then transported to the construction site. The previously developed oil fields were built where such river water was economically close and plentiful.
• ANWR has no river. It has only isolated pools deep enough to supply liquid water. Amounts are limited. The water would have to be trucked from those scattered sources to the road sites quickly enough to arrive unfrozen. There is no guarantee that taking water every year from the pools won’t drain them down beyond nature’s ability to replenish.
• Consider the points made above with the logistics of constructing miles of pipelines from the oil fields to the (elderly) main pipelines.
• Consider, too, that the only thing making ANWR oil feasible is by keeping gas prices at the pump as high or probably higher than they are now. You will also be paying a hidden price out of your tax dollars in government subsidies. FYI, the current budget already awards oil companies several billion dollars for ANWR’s first year. Expect more every year.
One last: raising CAFE standards 13mpg by 2015 would reduce oil demand 2.5 million barrels, twenty years ahead of ANWR’s possible million barrels a day. It might be smarter to offer the auto makers that subsidy to raise CAFE standards.
Apologies for the long post. It came out much shorter when I first thought it over than it did in real time on the keyboard.
Posted by: The Miller | May 1, 2005 10:03:57 PM
Thank you Mr. Miller. Your point has been received.
I agree with you that CAFE standards should be raised, but I would still would not rule out ANWR.
Posted by: Robert Zimmerman | May 1, 2005 10:26:56 PM
TM--one of the big reasons I am not overly concerned about the environmental effects of drilling in ANWR (even though I'm a hardcore environmentalist--I habitually climb into dumpsters to pull out recyclables) is that drilling had a negligible impact on the North Slope drilling on Prudhoe Bay, and drilling technology has only improved since. Are there any circumstances in ANWR that are different from the North Slope?
I think the delay in when the oil will get here is a good thing. We don't need it now--we need high prices now to help reduce our dependancy. Ten years from now, we WILL need it. Indeed, the fact that it will take so long in order to get production started seems to me like a reason to get started sooner.
But everyone knows this is not the solution. It's just one field, how could it be. But that's quite besides the point. No single field, anywhere, could single-handedly get us out of the mess we're in. If we were to follow the logic of "this field won't solve the whole problem, so it's pointless to drill it" then we would never drill ANY fields.
I completely agree that it's stupid that this oil drilling will be subsidized (and nearly all subsidies are stupid and wasteful, but this one is egregiously so) and will give juicy profits to Bush & Co. I wouldn't mind if we were able to stop it from being drilled. What bothers me is that Democrats are wasting so much time and effort, "political capital" if you will, on something so ridiculously insignificant (an arctic tundra, for crying out loud) while ignoring the dozens of far more important environmental problems.
The absolute best thing we could possibly do at this point, and I'm disappointed it did not even make the list, is to dramatically increase the gasoline tax. $1/gallon would be good.
This is the most direct way to attack the problem. It increases the price of the gas, creating an incentive to conserve more and invest in alternative energies. Demand is reduced. The money goes to the government, instead of lining the pockets of oil companies. The increased funds can be used to build more public transportation, and invest more in the research and implementation of alternative sources.
It should NOT be used to help states fund highway construction, as the majority of the current gas tax is used now. That's STUPID. The increase in highways only increases the incentive to use them. This is why cities like Dallas and Houston, with the two most expansive highway systems in the country, also have among the top five most congested highways in the country. More highways encourages people to live further and further from where they work and shop etc. It creates huge urban sprawl, suburbs.
Which is one more reason not to spend more money on highways. It's the rapid expansion of suburbs that has given the Republicans so many gains in the last decade. Look at a county-by-county map of the presidential election. Cities blue, rural areas red, suburbs purple, but leaning red.
My theory is this (and it's just mine... but I think it's pretty solid): the type of environment you live in has a huge effect on your political views. Urban areas liberalize people in two ways. 1) Urbanites are more dependent upon the government, for things like transportation, safety, and sanitation, and poverty control. People in rural areas, however, drive their own cars, own their own guns, burn their own garbage, and are often closely-knit and rely on each other for assistance in time of need. 2) Cities are the coalescence of countless different religions, ethnicities, and political beliefs. Constant exposure to them makes urbanites more tolerant of them, makes them ponder them more frequently, and makes them better informed. Rural areas are overwhelmingly homogenous in these respects and are not exposed to nearly as many different people and ideas (the internet helps, but the difference is still quite clear.)
Suburbs are inbetween. They are more dependent upon the gov't than rural citizens, for safety and sanitation, but not transportation or poverty control. Far more importantly, they still live in overwhelmingly homogenous communities. They get more exposure to different people and ideas than rural people do, but not nearly as much in their isolated neighborhoods.
The scales tip in the favor of Republicans, which if I remember correctly won around a 3/5 ratio of suburbs.
The proportion of both rural areas and urban areas in our population are both decreasing, mostly cancelling each other out. The phenomenon is the growth of the suburbs, giving the Republicans the advantage.
The suburbs are still growing rapidly. That's a big part of the reason I don't see better times coming for the Democrats anytime soon.
So... that's why we should increase gas taxes (discouraging people from travelling long distances to work etc.) and not use the increased funds for more god-forsaken highways.
My, how I've gotten off topic.
Posted by: Chris Meyer | May 1, 2005 11:48:32 PM
Your update (which I agree with) immediately put an image of John Kerry in my head. I'm not saying that's a bad thing, just that it made me chuckle a bit.
Posted by: Pill | May 2, 2005 3:02:26 AM
Some websites to add to your daily routine:
www.worldchanging.com
www.greencarcongress.com
Posted by: Mikhail Capone | May 2, 2005 4:26:45 AM
Oh, and www.grist.org I guess
You can bookmark the Daily Grist at
http://www.grist.org/news/daily/
Posted by: Mikhail Capone | May 2, 2005 4:27:11 AM
Argh, sorry if my last two comments kinda look like spam at first glance. I was trying to give links to websites that I adore on subjects of sustainable development, which itself is directly related to peak oil and the Wildlife Refuge drilling.
Posted by: Mikhail Capone | May 2, 2005 4:28:00 AM
Regarding the North Slope:
"There is no getting around the fact that oil development and production activities create industrial sprawl.
At present, the oil industry sprawls across more than 1,000 square miles of the North Slope, an area roughly the size of Rhode Island. This huge industrial complex, which literally can be seen from space, includes production pads and facilities, gravel roads, airfields and pipelines, and emits huge amounts of pollution."
That's a quote from the Arctic Wilderness League, but whatever their bias, the facts they state are true. The myth of an untouched North Slope has been made possible by the fact that so few of us go there. I have been there, less than a decade after they started pumping oil, and despite the overwhelming impression of whiteness, cold, and space, there was evidence of exactly this kind of industrialization everywhere we went.
The reason that there are subsidies in the energy plan is because the oil companies aren't that interested in ANWR anymore. This is a right-wing and Bush obsession - a poke in the eye of environmentalism as others have suggested, but also a stalking horse for drilling in other previously sacrosanct areas - off the California coast, for instance; I assume Florida is safe until Jeb Bush is no longer Governor.
Ezra, I wouldn't be quite so ready to trade off an inheritance like the Arctic. Remember, ANWR was and is a compromise already.
If any of you want to get a sense of what we'll be trading away, you might want to take a look at this essay by Terry Tempest Williams; it's fairly long, but she's an extraordinary writer. The article also has a link to some equally extraordinary photographs of the Refuge.
Posted by: Leah A | May 2, 2005 5:02:49 AM
On drilling in ANWR, I just read a very interesting report defining the extent of "economic rent" in the world oil market. Rent is defined as the difference between the market price of crude oil ber barrel and the economic cost of getting the oil out of the ground and to the refinery. In the Middle East, the economic cost is less than $5 a barrel. In other places, it may be as high as $15 a barrel. ANWR? $25 a barrel. So let's say Lawrence Kudlow is right )OK, I just had to bite my tongue) and the market price will soon plummet. Why in the world would we want to drill in ANWR where the cost of production might exceed the expected future price of oil. Negative cash flow economics from the radical right?
Posted by: pgl | May 2, 2005 1:14:42 PM
Oil will never go back to $25/barrel. Never.
The oil won't be coming out of ANWR until ten years after drilling has begun. I guarantee that the price of oil will be far higher than the $50 we have today.
The oil companies did not stop putting so much effort into opening ANWR because it somehow became insufficiently profitable. They stopped because it's one god-forsaken field and it's not worth the public relations effort. ANWR is insignificant, not unprofitable. And again, any individual oilfield is insignificant. Even though the expected reserves in ANWR would easily make it the second largest oil field in North America, second only to it's North Slope counterpart, it is still just one field. Trust me, people, profitability is not the issue here.
Leah--did any animal populations suffer in the North Slope? I've never heard any such evidence whatsoever--most animal populations actually expanded rapidly. Were you aware that there is not a single endangered, or even "threatened" species on the Coastal Plain of ANWR (where the oil is--the Coastal Plain region is around 1/12, 1/11 of the ANWR reserve as a whole.)
Yes, certainly, there is industrial sprawl in the North Slope, which will likely occur again in ANWR. The whole "it only affects two thousand acres" was always bullshit and I think both sides always knew that. The size of Rhode Island is an accurate comparison to how much land has been "affected" by oil development on the North Slope. Now, look at a map. Look at Rhode Island, look at Alaska. Better, try and find a map that shows the areas of Alaska that are open to drilling, and those reserved for parks and wildlife refuges. More than seventy-percent of all the natural parkland is this country is in the state of Alaska. Shouldn't we attempt to balance industry and environment?
The oil in ANWR is concentrated in a smaller area than in the North Slope. It is actually rather deceptive to refer to this debate as opening ANWR for drilling, because it is only the Coastal Plain of ANWR, or the "1002 area" that we are talking about. This area was put in limbo status by the congress in the '70s. It was made neither available to drilling or a as a wildlife preserve. The rest of ANWR, the vast majority (11/12 or 10/11) is permanent wildlife refuge--never to be touched, ever. And this Coastal Plain region we are referring to is considerably smaller than even Rhode Island.
You are absolutely correct that people never see the industrial sprawl of the North Slope. And that's the point. You're going to get such sprawl no matter where you drill. That's why, even though we're going to need to drill everywhere, it's better to drill where people don't live. Better in Alaska than off the coast of Florida or California.
If you want to try and stop oil drilling everywhere, fine. But if you're going to admit that we'll need to open new fields somewhere, we may as well prioritize where, and the Arctic Turnda is at the top of the list.
Posted by: Chris Meyer | May 2, 2005 2:04:13 PM
All of that still doesn't convince me we ought to drill there considering the economic impact will be negligible. In short, whats the point? The advantage? Pointing out environmentalists' exaggerations doesn't make irrelevant proponent economists' exaggerations.
Posted by: Adrock | May 2, 2005 5:13:14 PM
Adrock--the most important thing I'm trying to get across is that this issue is insignificant for both sides. It is not worth the political capital being put into it. If that has come across to you, then I am content.
But for shits and giggles I'll go through the economic reasons for doing it. Oil drilling will create tax revenue, improve the regional economy, and provide an additional source of domestic oil that could be helpful in times of crisis.
The federal taxes do compensate for the subsidies (making the subsidies even dumber--why not just get rid of them and lower the taxes? Or just get rid of them and keep the taxes, that works too.)
Alaska has the highest unemployment rate in the country. A big part of the reason is their ludicrously high minimum wage, which is $9.50/hr, well above the equilibrium of supply and demand. But another reason is that the oil coming down the pipelines from the North Slope has been diminishing. Since the pipeline structure is already in place, it can be extended to ANWR with less effort than it took to construct the original system. The oil coming from ANWR may not be a significant development for the nation or world as a whole, but it is absolutely huge for Alaska. The federal government controls huge chunks of Alaska. Again, 70% of the nation's natural parkland is here. It's an unfair burden on the state, don't you think? To have so much regulation of their land imposed on them? In every poll I've seen, more than three quarters of Alaskans support the drilling. For Alaskans, the people that might actually be affected by any environmental damage, unlike most of you, this is an obvious decision.
Drilling won't avert an oil crisis, but an additional domestic field can help dampen the blow, regardless of how significantly it will dampen it.
Now for the environmentalist's case. It's simple. Oil drilling will harm an environment. Any environment. An environmentalist should seek to reduce the harm oil drilling causes. This means drilling where there will be the smallest environmental harm. Deserts are at the top of the list. Then tundra. Then plains. Then temperate forests, then tropical forests, then oceans. Why do environmentalists do so much bitching about ANWR and not, say, Wyoming, the Gulf of Mexico, or some of the most environmentally disastrous oil drilling in the world in Venezuela and Indonesia? True, there will be some environmental damage, but not more than if we were to drill anyplace else. If you're going to bitch about drilling for oil in ANWR, you ought to bitch about drilling in every other ecosystem that oil drilling causes greater harm to first.
Posted by: Chris Meyer | May 2, 2005 6:36:31 PM
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