[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 â€“ 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.