High Time For Oil Conservation


In the time it takes you to read this sentence, the people of the United States will have used up (forever) 100,000 gallons of oil.

The most important well ever drilled was in a remote section of northwestern Pennsylvania in 1859 by “Colonel” Edwin Drake. This may have been the first successful well ever drilled for the sole purpose of finding petroleum, and began the international search for oil that eventually changed the way we live.

Today hydrocarbons power our economy. They provide the raw material for fertilizers to put food on our table and for the plastic containers that we drink from. They also drain our funds, enrich our enemies by bankrolling terrorism, corrupt our political system and foul our environment. Much like the whale oil of old, petroleum is a depleting resource. Petroleum, coal and natural gas (the “fossil fuels”) are forms of stored energy from trillions of plants and animals that were buried before dinosaurs roamed the Earth. Of course, new oil is still being formed today in some parts of the world, but you might have to wait another 150 million years to turn it into something you could use in your car.

Oil is only worth something when its final value is more than what it costs to produce it. As we drill deeper, the costs of extraction go up exponentially. In the case of deep offshore drilling, very little of the difference between revenues and costs accrues to our benefit. Unlike countries that have already nationalized their petroleum industry (like Mexico, Saudi Arabia and Libya) only a relatively small portion goes to our government in the form of royalties and taxes. The rest accrues to the benefit of largely foreign shareholders who often recycle that money back into our own economy by buying even larger interests in American assets like other oil properties, real estate and shares of American banks.

Many of us have heard that the U.S. is sitting on enough domestic reserves of gas and coal to last centuries. We are not told that much of the gas is too deep and the coal too remote to produce it without heavy subsidy. Natural gas development requires substantial investment in infrastructure spending. And, after centuries of mining, our shallow coal resources have been heavily exploited. The recent Massey Energy explosion in West Virginia brought renewed focus to the dangers of deep coal mining.

Deep water provides its own set of challenges. Typically below 1700 feet, offshore platforms cannot physically rest on the sea floor and instead must float on the surface. By now, we all know what problems can be created when things go wrong thousands of feet below.

Whenever we suffer through an oil boycott, a fall in the value of our currency, a terrorist attack or a disastrous oil spill, we must again remind ourselves that we have to act now to conserve. Alternative forms of energy such as solar and wind are simply too undeveloped to have an immediate impact, though efforts in those directions must be encouraged. Nuclear energy is burdened by its own set of problems — exorbitant costs, the risks of an accident or terrorist attack, the threat of proliferation and the challenge of disposing of the nuclear waste to name but a few. A nuclear accident will make the Gulf spill look tame. Unlike oil pollution, deadly radiation cannot even be seen or smelled. Then there is the issue of uranium depletion. The best ores of uranium have been mined, leaving mainly low-quality ores left to exploit. And with a country the size of ours (compared to the size of France, which has an active nuclear program) it would take a massive investment in many dozens of new plants taking many years to make even a small dent in energy availability. Some experts think that hydrogen will form the basic energy infrastructure that will power future societies, replacing today’s fossil fuels, but that vision probably won’t happen until far in the future.

There are obvious things we can do personally to save energy by changing our habits. Others, such as increased mileage standards and light rail systems, can only be accomplished though government mandate. Higher taxes on energy will spur a better allocation of resources. The higher cost of gasoline in Europe has led to the widespread use of lighter fuel efficient vehicles and greater utilization of public transportation. Higher taxes on energy use might be acceptable if offset by tax cuts elsewhere. Higher prices for petroleum products will inevitably curb consumption. Would it not be better that the proceeds from higher prices be directed to our own treasury rather than to foreign entities?

The unemployed are another wasted resource. As a temporary measure during the Great Depression, FDR created the Civilian Conservation Corps (CCC) to provide jobs to millions while providing natural resource conservation on public lands in every state. During that time, volunteers planted nearly 3 billion trees to help reforest America and constructed more than 800 parks that would become the foundation of our state parks today.

We can and should vote for candidates who promise to do something to promote conservation and the environment. We have all heard the mantra “Drill Baby Drill” from the likes of a certain political figure (I won’t embarrass her by mentioning her name). How many times must we be reminded? The U.S. today consumes a fourth of the world’s supply of oil, almost 3 times that of number two contender, China. As the populations of the developing world continue to trade in their bicycles for cars, the price of oil is certain to rise. Comprehensive climate and energy legislation must be given top priority — now.

There are no easy solutions. Wrenching lifestyle changes are going to happen anyway. Perhaps these can be greatly lessened by our immediate attention.

The author, a former oil industry analyst for a major mutual fund company, is a frequent contributor of photographs to The Georgetowner and The Downtowner.

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