Friday, February 22, 2002
6:24 PM LINK
Alaskan Discontent
From Wednesday's John Balzar, an Alaskan, a diatribe in the LA Times about his home state:
More than the oil companies
themselves, more than labor
unions, more even than
George W. Bush, Alaskans are
desperate to get some fresh
crude flowing out of the
wilderness here. That's
because there is a threat on
the horizon...Without new oil,
..., Alaskans might be
asked to pay taxes.
3:02 AM LINK
The False Petrodilemma
Why is the New York Times anti-ANWR rant in their Monday editorial so phony?
Basically, their argument rests on the following assumptions:
1. Petroleum is going to form the basis of the U.S. energy supply for many decades to come.
2. It is very important to our vital national interests to maintain the percentage of the petroleum consumed by the U.S. that is domestically produced at as high a level as possible.
Both these assumptions are explicitly mentioned in the editorial. One of the conclusions of the piece, and a mantra one hears in naive petroleum discussion, is that "we don't need ANWR oil, because we can save the equivalent amount of oil by proper conservation." Often you hear this expressed along the lines of "if we just inflate our tires correctly, we don't need to drill in the Arctic."
e.g., from Lieberman's web site
Increasing the fuel economy of traditional cars by just 3 miles per gallon saves the same amount of oil over the next 10 years as what we could expect to get from the Refuge.
(i.e., let's eke out our oil for as long a possible)
If this were a logic class, we could correctly label this proposition a classic false dilemma. Conservation vs. Arctic drilling. But who ever said that we shouldn't both drill for as much petroleum domestically as possible and make great strides in conservation?
In fact, given the two assuptions above it follows that the sanest energy policy would be to drill for every drop we can get, and also conserve as much possible.
Just how much petroleum does the U.S. have? Of the almost exactly 1000 billion barrels in the accepted figure of proven world-wide reserves, how many are in the U.S.? 100 billion? 50 billion?
Try 22 billion, according to the latest OGJ estimate, about 2% of the world total, and about one-tenth of Saudi Arabia's reserves.
How much petroleum does the U.S. use, in a year. Answer: about 7 billion. So if we lived on our own supply, we can last about three years, if no more domestic oil were found.
But that 22 billion does not include ANWR, since it's not recoverable by existing wells, according to the definition of a "proven reserve."
So how much is in ANWR. Low estimates are about 7 billion barrels ultimately recoverable (the 3.2 billion barrel figure you hear is quoting the lowest of the low estimates). High estimates put the figure at about twice that number (you hear numbers up to 20 billion, but not all of it would be recoverable).
A "nice" reasonable number, based on statistics from the geophysical data, is probably around ten billion barrels. This would be slightly less than the Prudhoe Bay field, the largest-ever find in North America, which will have yielded about 13 billion barrels all-in-all (about three billion barrels are left).
Ten billion barrels is not a lot in the global picture. In the Persian Gulf, ANWR would be a nice little field worth drilling someday, when they got around to it.
But considered the U.S. proven reserves are only 22 billion barrels, adding 10 billion more to that is a nice chunk of hydrocarbons.
But according to the logic of the Times, patriotism demands that we get all the oil we can domestically (like I said, they are perfectly happy advocating Cheney's "technology will discover more oil for us" dream). Yet according to them, drilling in ANWR, with its 10 billion barrels should be off limits.
From my understanding, there is very little possible that technological advances and Gulf of Mexico drilling is going to add ten billion barrels to the U.S. reserves.
So in other words, we are going to squeeze ourselves through conservation in order to free our foreign policy, but we are supposed to tie our hands behind our backs by declaring ANWR off limits?
If every drop of oil really does count towards our national independence in the decades to come, then it would seem that putting ANWR off the table borders on treason. So what if the oil there is going to take ten years to get to market? Are we still going to need it then or not? And if so, won't every drop count?
It's probably one of the most fuzzy-headed editorials I've ever read in the Times. But then, I don't read many of them.
2:17 AM LINK
Corporations.org
Interesting site, to go along with "Methanex/Horrors of NAFTA" discussion last week
Wednesday, February 20, 2002
3:54 PM LINK
Cheney's Company Hand-in-Glove With Iraq
It's hardly big news, really that Haliburton is in on the Iraqi oil game. Iraq has been wide open for business with the world petroleum companies for several years now, with production having returned nearly to pre-sanction levels (see graph below).
And you thought the U.S. oil companies weren't in on this action?
Cynic's interpretation of Bush's Iraq policy: "It's just getting too inconvenient to do business with Iraq through non-U.S. intermediaries. If we get rid of Saddam Hussein, we can do what we're already doing now, but out in the open."
Here's the U.S. DOE's own graph of Iraqi petroleum production levels over the last few years. Not what you might have expected, is it? Didn't you know the Iraqi oil embargo was over?
from this site
2:59 PM LINK
The Times Tries to Have it Both Ways
The basic thesis of the Times editorial I mentioned included the following points:
1. Atlhough it won't solve all our problems, the Bush administration's desire to look for more domestic oil is a good thing (see previous post).
2. We should, however, concentrate much more on conservation than we are (the editorial mentioned the one-line throw-away about conversation in Bush's State of the Union address.
3. Also, we should revive the Carter Administration's efforts to develop alternative energy sources.
About point number one: the writers of the editorial seem to have drunk the
Cheney kool-aid that "technological advances" will bring us a great deal more petroleum. Deffeyes, and others, think this is bunk.
The points they make sound nice, especially the touchy-feeling part about conservation and alternative energy, but then the editorial turns around and spends a great deal of its emotive thrust arguing that ANWR should definitely be off-limits from oil drilling.
Holy mackerel! This anti-ANWR-drilling diatribe just comes out of the blue. In my opinion, the editorial writer is trying to have it both ways, big time. On the one hand, finding more domestic sources is very important and downright patriotic (the Gulf Coast fields are mentioned in particular). On the other hand, ANWR should be off-limits.
My response: either domestic petroleum sources are important or not. You have to choose. The U.S. doesn't have that much oil left in reserve, from a global perspective, but all in all, ANWR would be a huge percentage boost in that figure, possibly increasing it by as much as 50%. If it were in Saudi Arabia, ANWR wouldn't be a big deal, but since it's in the U.S., it is a very big deal from the standpoint of total U.S. reserves (that's how small of a player the U.S. has become).
To follow Cheney's lead by asking the oil men to do their patriotic duty by squeezing out more oil from Florida and west Texas, but then taking the sweet pie of ANWR right off the table just doesn't make sense.
Either increased domestic petroleum production is important, or it isn't. You can't have it both ways. To argue that we indeed need more home-drilled oil, but then taking ANWR out of the equation (even if it will take ten years to get to market) just doesn't make sense.
This kind of phony anti-ANWR-drilling argument coming from the "the Liberal media" must make the pro-petroleum conservatives drool. Such a fat easy target to shoot down. By the Times' own standard, to be against ANWR drilling amounts to being against "the war on terrorism."
Tuesday, February 19, 2002
11:59 AM LINK
The New York Times Flies the Flag
The two articles in the Times that I mentioned were a Sunday front section feature on the Mexican oil industry, and an unsigned ending "Ending the Oil Addiction" in Monday's edition about the U.S. national energy policy.
I'm going to look at the editorial first. The piece takes Bush to tast for his national enegy policy, on the grounds that it does not address the U.S.'s "crippling reliance on imported oil, especially petroleum from the Persian Gulf" (italics mine).
The editorial proposes the following benefits from such a reduction of dependence:
1. greater flexibility in the "war on terrorism"
2. greater flexibility in foreign policy in general
3. important technological gains
4. decreased greenhouse gas emissions
I call this the
red,white, and blue argument for decreasing petroleum dependence.
The editorial's main point is that whereas seeking increased domestic petroleum reserves is certainly helpful, this alone can never end the U.S.'s dependence on foreign petroleum.
This point is absolutely true. There is no way to crunch the numbers, even in the most optimistic scenarios of domestic discovery, that would give the U.S. anything near "oil freedom."
The editorial makes a second good point that you don't hear very often: although it is impossible (under current consumption patterns) for the U.S. to eliminate it's dependence on imported petroleum, it is actually quite feasible to imagine that the U.S. could temporarily eliminate its dependence on Persian Gulf oil almost completely (I emphasize the word temporarily here).
This could perhaps be achieved through the following:
1. increased domestic production
2. increased production from Canada and Mexico
3. increased production from West Africa.
The last of the three may sound odd to you. You may know that
Nigeria has quite a bit of oil. The reserves there are not anything near to the scale of the Persian Gulf (I'll put up some hard number later), but the fact that the oil is, so to speak, just down the block from us, means that they ship nearly all the oil they produce to the U.S.
But the editorial makes another very interesting point that doesn't get much air time: even if the U.S. eliminated its dependence on Persian Gulf petroleum (presumably allowing America to finally tell the Saudis what we think of them with a free hand), this would do nothing to change the world geopolitical equation, since Europe and the Far East (most notably Japan) would still be getting much of their oil from the Persian Gulf.
1:25 AM LINK
Back to the Oil Supply
I detoured into talking about NAFTA and the Methanex case last week. Like I said, the highest NAFTA Ch. 11 cases seem to be coming from petroleum-additive companies. Now back to oil...
In the last two days the New York Times has published a couple interesting articles on the world oil supply There is some interesting information (and disinformation) in both. I'm going to spend the next couple days dissecting them, based on what I've learned so far from my slow reading of Deffeyes' book.
