Sunday, July 20, 2008

There is No Energy Shortage—There is a Shortage of Legislative Will

This interesting piece was passed on to CARE by one of our members. A version had been published as an editorial in the local paper. The CARE Member knew it was something that would catch our attention. He was correct.

Not only is this posting insightful, we believe it to be accurate in pointing out where the true shortage is and where the surplus is: special interest groups who are killing energy production.

There are several elements to this commentary that we found to be especially helpful. First, it caused us to identify a new source of information—the author Donald Wolberg, Ph.D., a geologist and an adjunct professor at New Mexico Tech. Another asset in our new association is that he has vast expertise in coal—something that we have been lacking in our panel of experts. We hope you’ll enjoy this new source and we hope to have additional posting from him in the future. Let us know what you think!

Fuzzy Facts and Fuzzier Logic
I frequently enjoy the astute comments of Dr. Charles Krauthammer, whether delivered via the local paper on Sundays or his televised appearances. However, I suggest that some facts may have escaped his research regarding matters of energy pricing and availability, "U.S. Can Tax Itself Off Oil Addiction," Sunday June 8. Of course the U.S. (and all of the industrialized and industrializing world) has an oil addiction. Oil and its refined products offer the most efficient sources of energy available in quantity, safe when used properly, available in the market place, and is an efficient provider of "energy" for certain uses. Petrochemicals are an additional set of products needed by the entire world. The recent spike in cost of fuel and other products is complex, involves much speculation, but can be remedied by increasing, not rationing supply.

There is really no shortage of energy in terms of reserves available for development and production. There is a shortage of legislative will. There is also a surplus of special interest and agenda pleading without concern for the socio-economic impact on the lives of real people.

North American tar sands and oil shales hold somewhere between 800 billion and 1 trillion barrels of oil 1,000 billion barrels), more oil than is present in the entire Middle East, combined. This oil can be recovered. The mid-continent Bakken Formation has another 3-4 billion barrels of recoverable oil, sitting largely untapped. Apart from the overly abused mention of ANWR, where the total footprint of development would be equivalent to a few football sized areas in the state of Indiana, there are untapped mega-reserves on all our continental shelves, the Western Interior and Gulf coast.

The only development of oil platforms and drilling off of Florida by the way, are likely to be operations by China and other nations via permits issued by the Cubans. Most "cartel" oil in the world is now state owned or controlled (at least 80%) and American or other "Big Oil" actually produces a very small share of the oil pumped in the world--size and supply matters in the oil industry. It still costs the Saudis less than $2/barrel to pump oil. It costs American companies the same $30-40/barrel to pump American oil as it did before the oil price spike. The difference is that most American oil is old oil, since it is almost impossible to gain access to new fields because of the bizarre actions of a less than motivated Congress and the pressure of elitist and mostly urban special interest alarmist groups.

The pricing of oil is complex but it is obvious that expansion of production will cause the price to decline greatly, no matter how long it takes to bring the increased production on line. More importantly, oil is a strategic necessity, and I suggest that those who prevent the expansion of a domestic production strategy are guilty of a "fuzzy logic" that threatens our economy and society.

U.S. oil consumption has actually stabilized at about 20.6 million barrels/day. This consumption rate has not changed much since 2000 and actually decreased compared to 2004 and 2005. In truth, we do not "over-consume" given the diversity, geography and needs of our economy and social structure. New England homes tend to use oil for heating and that is not likely to change. Railroads use oil to move trains since there are very few corridors for overhead or third rail power in the U.S. Trucks use oil. One truck with 200-300 gallons of diesel capacity--1500 mile range--may need 3-4 refills on transcontinental runs to haul what we all need.

Interestingly, there is sufficient available known U.S. and North American untapped oil reserves for perhaps the next 500 years or more at present consumption. There is sufficient coal to be used as coal for 500-600 years with enhanced uses as coal or modified products. New Mexico has significant undeveloped coal resources in the San Juan and Raton basins. New Mexico can and should be a major participant in nuclear energy development and together with reactor technology, these resources can provide nuclear power of virtually infinite duration. In the end, significant development of these resources will reduce energy costs to a more reasonable and marketplace driven level.

What is required immediately is an expression of legislative will, especially by Congress to free this nation from the increasing burden of reliance on foreign oil sources and the dangerous transfer of dollars abroad. At stake is our economy and the welfare of Americans, as well as national security. There is nothing magical about an immediate solution, except perhaps the will of elected representative who have forgotten that they serve all of our citizens.

Donald Wolberg, Ph.D.Socorro, NM

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