Commentary: Sensible Energy Policy Must Include More than ‘Just Say No!’
Consumers recognize that energy supply really matters as attitudes shift toward pursuing domestic sources.
President Bush’s recent decision to lift the 18-year-old executive order on offshore oil development is a welcome sign that America may be prepared to make better and more complete use of its domestic energy resources. His decision has started an important national dialogue that recognizes energy supply really matters.
During this 18-year period, our nation and the world grew and prospered at unprecedented rates, fueling a strong increase in energy demand.
The result has been an increased dependence on foreign imports that today provide 60 percent of our daily petroleum needs. These imports come largely from foreign governments that control close to 80 percent of the world’s oil reserves. Many of them are subject to political upheaval and some are hostile to U.S. interests.
Concern about disruption of energy supplies from volatile regions of the globe is one of the reasons experts say crude oil costs have increased dramatically. With crude oil costs currently making up about 75 percent of the average price of a gallon of gasoline in the United States, consumers are paying record prices at the pump.
We at the Western States Petroleum Association believe bringing additional supplies to consumers — especially from areas that are reliable and firmly within the control of the United States — will send an important message to global energy markets.
No one can say for certain more oil supplies will lower crude oil or gasoline prices. But history, logic and economic fundamentals suggest that adding reliable supplies of energy to an uncertain market where demand is outpacing supply would be welcome news for consumers.
Having said this, do we believe more of America’s offshore resources will be opened to new energy development in the near future? Perhaps not. Americans, especially those fortunate to live on our beautiful coastlines, have very strong views on this issue and have made those views clear to political leaders.
Recent polls suggest American consumers are beginning to change their thinking about the benefits of making better use of all our energy resources. If and when they decide to support new exploration and development of the large oil and natural gas reserves off our coasts, the petroleum industry has the experience, the technology and the trained people to bring those vital energy supplies to consumers safely and with environmental sensitivity.
Our industry today operates offshore facilities with extraordinary care and attention to safety. We have developed sophisticated technologies and equipment that monitor activities and give advanced warning if anything is awry.
Proof of this commitment to safety and the environment is our record in California over the past 38 years. According to the Interior Department‘s Minerals Management Service, since 1970 oil facilities in U.S. waters off the California coast have produced nearly 1 billion barrels of oil and spilled just 850 barrels into the marine environment.
Granted, that’s 850 barrels too many. Our goal every day is zero oil spilled.
But put into perspective, it’s 28 barrels a year. In comparison, a network of natural oil seeps just off the coast of Santa Barbara introduces about 55,000 barrels of crude oil into the ocean every year — more oil every week than has spilled from offshore activities in the last 38 years.
Advocates of the “just say no!” energy policy argue there isn’t much oil offshore and that it will take years to reach consumers.
According to the MMS, the area off our Pacific Coast alone contains as much as 13 billion barrels of oil and 22 trillion cubic feet of natural gas. And those estimates are based on a 1999 assessment.
If it were to be developed, that’s enough oil to replace all the crude we import from Saudi Arabia every day for the next 20 years. And, experience in other rich fields of energy has shown that initial assessments are usually significantly underestimated.
It’s true offshore oil and natural gas resources can’t be developed overnight. Typically, it takes five to 10 years to fully explore and characterize a field and to secure the permits, equipment and capital necessary to bring its oil and natural gas to consumers.
And it’s clear we can’t just drill our way to energy security. That’s why oil companies are spending billions to develop unconventional petroleum fuels and alternative fuels and technologies to augment our petroleum-based supplies. It’s why we encourage all consumers to conserve energy and use it as efficiently as possible.
There are no quick solutions to get us out of the energy supply hole it took us decades to dig. If we are serious about improving U.S. energy security and providing adequate, reliable and affordable fuel to consumers, we need to start making better use of our own energy resources. The sooner we start saying “yes” to domestic energy supplies, the better.
Joe Sparano is president of the Western States Petroleum Association. The Sacramento-based organization represents the petroleum industry in California and five other Western states.
» wrote on 08/13/08 @ 10:05 AM
Our dependence on Middle Eastern oil means more U.S service men and women killed in wars for oil. It means a weaker America.
Freedom from Middle Eastern oil means keeping our troops here at home. It means more of our money staying here ( on the order of $400 billion or more) versus going to terrorist sponsoring countries.
Lois Capps, Janet Wolf and Salud Carbajal all prefer dead Marines over oil rigs off our coast. On August 26 the County Board od Supervisors will conduct a public meeting to discuss the future of oil and gas development in the county and offshore. Capps, Wolf and Carbajal will voice their opposition to expanded oil and gas development. Their words will sound the death kneel for thousands of American troops if heeded.
» wrote on 08/13/08 @ 03:44 PM
I agree with Mr. Sparano’s conclusion that it’s good to get these ideas into public debate.
I do take issue with some initial, straw dog claims. “America’s informal energy policy has been to ‘just say no!’ to safe and sane development of much of the nation’s vast oil and natural gas resources.”
Mr. Sparano, this is the point. There are very few anti-oil advocates lobbying against “safe and sane” oil and development. The safety to our environment and our children’s environment is a more pressing issue to that side of the argument. Oil drilling and transportation is not safe enough. If it was safe enough, there would be very few detractors.
Also, claiming the defense that oil companies are spending significantly on alternative energy development by mentioning they are spending billions also misses the point. If the oil companies were plowing a significant amount into alternative energy developments, they too would have more on their side. However, profit reports underscore that their alternative energy investments are minor compared to their profits.
Conservation is the single most important weopan we have to deploy self-sufficient energy policy. The second best is renewable energy sources...and I don’t mean gas guzzling corn-based biofuels which use more energy to produce than they provide.
There are a number of studies that show dramatic energy savings just from passive solar water heating...not very high tech...or speed limit reductions.
More unsafe drilling of a scarce resource is a losing game.
P.S. Great commentary excerpted from some pretty wild and crazy lefties at Forbes:
“Check out John Tamny’s masterful analysis on the meaning of oil’s four-week decline:
Last month, gold rose at one point to nearly $1,000/ounce, and oil hit an all-time high of $147/barrel. Since then, oil has fallen roughly 23 percent against a 17 percent drop in gold. So as is always the case, a large reason for oil’s current weakness has to do with a dollar that currently buys 1/827th of an ounce of gold, as opposed to nearly 1/1000th a month ago.
Still, oil has fallen further, and while rumblings of greater supply reaching the market due to presumption of liberalized drilling rules might explain some of the disparity, another realistic explanation lies in the aforementioned gold/oil ratio.
As of last month, the ratio was roughly 6.8/1, so if history is any kind of indicator, oil was and is due for an even greater fall versus gold given the longstanding relationship between crude and the yellow metal. Looking ahead, no matter the direction of gold, oil has room for further weakness given a ratio that as of this writing is roughly 7.3/1.”
» wrote on 08/13/08 @ 08:27 PM
The business of the oil industry is oil, not alternative energy. If and when the industry sees it to their advantage to diversify their investments in other energy areas, they will. To suggest that they do this to make friends with their detractors is ludicrous. As far as the safe and sane argument goes I want those who say the oil industry isn’t safe and sane to prove it with hard facts. An oil spill might dirty some beaches and kill a few birds, but where is the data that shows it really injured or killed human beings? The Exxon Valdez oil spill, as horrific as it was to see, did what permanent damage to the environment? What was the injury or death caused by the 1969 oil blowout? People treat oil as though it were some poisonous substance from another universe for God’s sake. It is a naturally occurring organic substance. It degrades in the biosphere quite fine all on its own without dig bat humans wasting tons of material and energy trying to “clean” it up. No, I’m not advocating we go back to the “black gold rush” days. Just be a wee bit more reasonable and get more done. Now don’t get me started on Al Gore’s new religion.