Wednesday, June 18, 2008

Oil is a Harsh Mistress

Bringing a friendly disagreement from a bar, where both sides can fling manufactured facts without consequence, to the satisfaction of all, onto the Internet, where both sides will waste time looking up ever-more dubious references that will never convince their opponent, is a contemptible practice. Nonetheless, I feel driven to add this analysis from the Energy Information Administration to a recent off-blog discussion of the effect of opening the Arctic National Wildlife Refuge to oil drilling.

The conclusion of that notoriously left-wing hippy environmentalist 5th column in the Department of Energy is that by 2025 Americans will be able to reap the windfall of ANWR black gold to the tune of a savings of $0.76 per barrel. Assuming that we successfully invade a new oil-producing state in the Mid-East every 6 years, we should be able to prevent EIA's expected scenario, that "the Organization of Petroleum Exporting Countries (OPEC) could neutralize any potential price impact of ANWR oil production by reducing its oil exports by an equal amount."

It's true that the American people are ----------1, but I doubt any positive psychological impact of opening ANWR would persevere through 17 years of absolutely no impact on prices.

1 Word suppressed to prevent misuse of quote.


jjv said...

ANWR is merely a piece of the puzzle. What would happen to oil prices if we cut off Prudhoe Bay right now? The point is the environmental impact is very low and the gains high. The fact that Saudi Arabia, to offset ANWR would have to lower its production and thus get less money is a good thing. There is ANWR, there is off shore and their is shale, coal and nuclear. Together they could make a difference and lower our dependence on the Middle East. All are blocked by a liberal coalition.

The link on this study did not work but even if it did, isolating every oil well in the world and saying they wouldn't make a difference to world oil production is foolish. We are trying to get Saudi Arabia to increase production by 500,000 barrels, ANWR would produce that much without us begging sheiks.

The mindset that blocks ANWR blocks any realistic plan to adress the bind we find ourselves in.

Dave S. said...

DOE is notorious for being stocked with Carter administration holdovers who are actually breeding new mid-level functionaries as we speak.

From this discussion it sounds like the ANWR oil would go straight to Asia for transportation cost reasons.

I actually agree with JJV that we need to increase nucular energy production. In his rush to make his point he appears to have left out wind and solar but I am sure that was an oversight.

Finally, for the secret word are we talking about the common clay and/or the salt of the earth?

CRH said...

Fixed the link in the post (which was also available in the title).

The addition of the offshore reserves might be able to lower the per barrel cost by as much as $2.25 by 2025. That's not going to be more than a few cents at the pump.

US companies already hold plenty of leases on land with oil-bearing shale. They prefer to let the land sit and rot because the oil is too expensive to extract.

Neither ANWR nor offshore drilling are part of a "realistic plan" to address our energy problems, because even combined they don't make the slightest difference to the big picture.

In 4 of the past 7 years we've had a President and Vice-President whose ties to the oil-industry could hardly be stronger, a Republican controlled Congress whose center of gravity was found in Texas, and a significant minority of Democrats who proved themselves willing to cave to the Republicans at the slightest pressure. If expanding drilling was really so important to a sound energy policy, they would have gotten it done. Instead, ANWR is dragged out in election years as a symbol, then dropped.

Nuclear energy might have been important, but it takes over a decade to bring one online, we would need dozens of new ones, fuel is turning out to be a potential problem, we still haven't solved the waste issue, and energy companies tend not to want to build plants because they are so damn expensive and there's lower hanging fruit. Other than that, I agree that nuclear is better than coal.