[Note: The statements below are intended solely to stimulate discussion among the Expert community, and do not represent the position of OurEnergyPolicy.org. Text in italics indicates clarification or expansion.]
The main issue here is hedging our bets and securing our oil supply in case of a global war on resources. Why do we need to hedge? We cannot “drill” our way out of the oil problem. Relying on drilling as a solution is like placing a coin bet on the life of our children. It is too risky.
- We cannot be sure that our policy to move away from oil will succeed (or succeed in time). There are too many factors and one successful terror attack can change the world oil balance.
- The world demand in the last 10 years has outstripped all forecasts by a considerable amount. Another error will create oil shortages sooner than expected. Regardless of the timing, oil shortages will arrive soon as world demand from developing countries outgrows supply.
- It will ease the economic burden while we work on moving to alternative solutions. It should help put a temporary pressure on price.
- Many of the products we use are petroleum based. It will take time for chemistry and industry to provide us with equivalents to petroleum based products. We will need that oil. Our main effort is to eliminate oil from the transportation sector. Finding alternatives for the chemical industry is a much longer process.
- We need to increase our strategic reserve for large catastrophe (example – a polluting nuclear device detonated in the Strait of Hormuz). Securing our oil supply until we have alternatives is top priority.
Form an independent committee to re-examine all tax (and other) subsidies to oil companies. Many of them were created when oil prices were low and the global energy market was different. They may not serve their purpose today. If we can eliminate some of these subsidies, we can use the money to finance our energy policy.
Allow drilling in ANWR under the following conditions:
- The amount delivered to the U.S. market will not be higher than the current amount flowing through the Alaska pipeline. The production level of Prudhoe Bay is declining, so the increased production in ANWR will simply replace the declining amount.
- The pipe capacity is 2 million barrels a day – about 1 million are used today. We need to keep the spare 1 million capacity available. As a delivery reserve in case of major oil supply interruption.
- Oil companies must dig two producing wells for each operative one – that way the ANWR field could be used as part of our strategic petroleum reserve (with the free capacity of 1 million barrels a day in the pipe). The oil companies can replace the dwindling Prudhoe Bay capacity while at the same time increasing our strategic reserve.
Allow offshore oil drilling under the following conditions:
- Only Natural Gas could be delivered to the shore using underwater pipes. This will affect drilling decisions with preference to natural gas fields.
- Oil will not be pumped out. That way it will be part of the strategic petroleum reserve, close to our shores. If our efforts to replace oil stalls, we can start production quickly.
Shale Oil – Keep the status quo. Let the oil companies develop in-situ processes in limited trials. Economical production technologies for our shale oil are many years away. The environmental issues are complicated. We have better options at this point.
One observation about high oil prices. The U.S. is far more at risk of an oil embargo or rising oil prices than other industrial countries. We have been subsidizing oil… Read more »
Thanks, Charles. Your point about the US being especially vulnerable to oil price increases was part of what I meant to convey in my earlier email, but didn’t do so… Read more »
Bruce is correct that in the case of oil, the political economy has manipulated the market such that on its own the market fails. But our current political system provides… Read more »
Politically I don’t think we will undercut existing domestic corn ethanol producers. However, I strongly agree that it would be helpful to have a lot more low priced ethanol in… Read more »
Bryan, et al: Politically I don’t think we will undercut existing domestic corn ethanol producers. However, I strongly agree that it would be helpful to have a lot more low… Read more »
Policy is driven by the interests. The question is who would be for it and would they mount a lobbying campaign to begin to educate and sway members of Congress.… Read more »
Generally speaking, guaranteed government subsidies only cause the price to float up to encompass the “free lunch”. From my understanding, the large ethanol producers, such as P.O.E.T, can produce ethanol… Read more »
In a recent interview with Platts Energy ( http://bit.ly/hdwEKU ), John Hofmeister, the former President of Shell Oil, predicted that due to heightened global demand for oil, restricted supplies, and… Read more »
John Hofmeister correctly emphasizes the inevitable trend towards higher world oil prices resulting from growth in global oil demand particularly in developing countries like China and India and restricted conventional… Read more »
The Republicans in Congress deny climate change and defend the fossil fuel industry. My question is: What are they doing FOR the American people to make us more competitive in… Read more »
Tax works well when the goal is to incentivize change. This assumes that there is an alternative and that price signal is the only barrier for entry to the market.… Read more »
The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling has released its final report to the President. The 380-page report ( http://bit.ly/fzjdVP ) provides the Commission’s… Read more »
I am forwarding this article on offshore oil “Before Peak or Beyond Petroleum – BP Oil Limits” Article Summary: BP’s Gulf of Mexico disaster is treated almost daily in the… Read more »
The lead article in the April 25th issue of the New Yorker magazine is “Kuwait on the Prairie” and talks about the Bakken formation in North Dakota. This article claims… Read more »
I only used data provided by the Department of Energy of active development projects. I don’t know how much of this they have there. However, I’ve been told that new… Read more »
I don’t have any position on “the truth”, but you might want to read this http://www.snopes.com/politics/gasoline/bakken.asp
Yossie
Every dollar we send to foreign suppliers is a dollar gone. period. Every dollar we spend on Bakken, Utica, Niobrara, etc. gets reinvested in our economy. Given the choices, domestic… Read more »
The Keystone XL pipeline expansion project, first proposed in 2008, is projected to transport 500,000 barrels/day of crude oil 1,700 miles from Alberta, Canada’s “oil sands” to US refineries along… Read more »
Producing a barrel of synthetic crude oil from the tar sands releases up to three times more greenhouse gas pollution than conventional oil. The Athabasca River winds nearly 1,500 kilometers… Read more »
I have two major problems with the Keystone pipeline project. First, it seems to be presented as another either/or controversy. Either we face enormous releases of greenhouse gases (therefore stop… Read more »
The resource is going to be developed, sold, and used no matter what. So GHG emissions really are not an issue worth considering. The route through Nebraska raises some legitimate… Read more »
With regard to Keystone, it sounds like a trick question, but it’s not. Should you buy a strategic commodity from a neighbor and friend or import it from a cartel?… Read more »
The Alberta oil sands contain about 2 trillion barrels of oil, of which at least 170 billion barrerls are recoverable at current oil prices. It may be the world’s largest… Read more »