Archive for May 17th, 2008

Ok, President Bush had a conference today.

Saudi oil output hike would not solve US problems

Bush said he was “pleased” with a Saudi decision taken on May 10 to increase its oil production by 300,000 barrels per day in response to customers, but said that he was “also realistic” about what the Americans should do.”Our problem in America gets solved when we aggressively go for domestic exploration. Our problem in America gets solved if we expand our refining capacity, promote nuclear energy and continue our strategy for the advancing of alternative energies as well as conservation,” he said.

“One interesting thing about American politics these days is those who are screaming the loudest for increased production from Saudi Arabia are the very same people who are fighting the fiercest against domestic exploration, against the development of nuclear power and against expanding refining capacity.”


President Bush is speaking of oil in ANWR, refineries, nuclear, and alternatives as if these tactics are useful now, when it will take years to even see the results of those actions. The barn door was left open a long time ago.

This is not to say that these shouldn’t be done. But it is not a question of if they should be done but rather of when they should be done.

Here is the issue I have with talking about ANWR like it is a good help-things-soon kind of solution.

Imagine that there is truly the possibility that we’ll run completely out of oil in the next 50 years. I highly doubt the pants-wetters on this, but let us continue with our “what if?” game. As those Middle East oil producers realize that their oil tanks are dipping very low, they are going to start hoarding what they have, and it will be either used for themselves or for making ever more obscene amounts of money.

At that point, supposing that we have tapped into our domestic oil sources and used them all along, what do we have left? You can be sure that countries grown prosperous and large amounts of relatively wealthy citizens will suddenly view oil as being as important as water itself, especially in winter months. Who will be the people most well off should the Middle East actually dry up? It will be those who have not exploited and used up all of their own domestic supply.

As OPEC production increasingly lags behind demand regardless of refinery capacity, the larger more populous countries will begin casting about for alternative sources of energy (what we have now is flashlight/butt/hands fumbling weakly). One can well imagine that in spite of all the backslapping, hugging, and photo-ops between Russian and Chinese leaders, as soon as oil supplies get snarled, China is going to stop looking at Russia as a neighbor and more as a milk cow or worse, both for their domestic supply and for the fact that Russia stands between the Chinese and the Arctic. Russia has resources China would dearly love to have – domestic oil, lumber, and location, location, location. The Arctic is being eyed greedily every day and the US is no exception. In a contest between China and Russia, my bet is on China.

We talk about shale oil out west, oil sands in Canada, and ANWR, and that is fine, but we also ought to try to keep a longer outlook: What you have in your hand is yours but what someone promises you and they hold in their hand is theirs until they actually give it to you. And in the real world deals are made and broken all the time.

The takehome on this is simple:


It sounds harsh and scheming, but what else are you going to do? It’s a harsh world and you have to think about these things unless you wish to become a liberal.

In the immediate term a rational approach would be to build refineries to limit bottlenecking here in the US – less stress on the infrastructure makes sense, economically and strategically. Secondly we should be revisiting the use of nuclear power – we have a place to store wastes and we have had an effective method of transporting spent nuclear materials for years. Third (slightly out of order) states could stop requiring bouquet formulations of fuels which would help smooth the jagged edges over a bit. And start looking at rail transportation that makes sense in the US, for heaven’s sake. Buses are cute but they’re terrible for a real commute in America, from suburbs to city.

But in the meantime? Tighten your belt and just pay for your gas like everyone else.

Or we could start to make ethanol out of potatoes instead of corn.

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