Over the weekend I neglected to mention (in connection with my Sunday column on the subject) Robert Ariail’s wonderful cartoon of July 4, which states the Energy Party position with the same incisive relevance as the original Ben Franklin cartoon that inspired him did the cause of the Revolution.
And I didn’t even put him up to it…
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Mr. Warthen,
What kind of car do you drive?
The last time I saw you, not so long ago, you were in a big full-size GM sedan.
GM is offering full trade-ins on SUVs, with $5,000 to $10,000 of the sticker on a new SUV, and no-interest financing for 72 months. Maybe it’s time for you to trade.
I bought a new commuting bike, and have shaved up to 50 miles off my weekly driving. Now that’s patriotism.
What if we had gone all-out and drilled for oil in the ANWR back in the mid 1990s? How would our current situation be different? Since oil prices were very low in the mid 1990s this is just a hypothetical. There would not have been any incentive for the oil companies. But what if.
First, after spending billions of dollars over 5 years to construct the rigs, pumping stations and pipeline extension to the Prudoe Bay line production would have commenced some time around 2000-2002. Then production would have ramped up to a maximum capacity of 1 million barrels/day more or less. So US production would now be about 6.1 million barrels vs 5.1. But, US production is not the relevant consideration. What is, is world world production. That’s what sets oil and gasoline prices. The Saudi’s have a great incentive to keep oil prices high (but not too high) so they certainly would not have increased their production by the 300,000 barrels they have recently committed to.
As a result, world oil production would now be about 700,000 barrels/day greater than it currently is. In a global market that means that we would now have 86.7 million barrels vs 86 million, a scant sub-1% increase. The price of gasoline would be down some, perhaps to $3.75/gallon vs $4. At $3.75/gallon demand would be somewhat higher than it is now and the gap between production capacity would become narrower over time, just as it has over the last 5 years.
So let’s fast forward to 2015. After pumping all-out for the last 7 years ANWR oil production inevitably goes into decline just as the Prudoe Bay oil did 20 years earlier. By 2020 production has dropped to about 400k/day and U.S. production has dropped to below 5million barrels/day. And oil prices have shot up to $300/barrel.
The bottom line is this. Even with the unrealistic assumptions I’ve made here the ANWR oil can only buy us a few years of slightly lower gasoline prices. At those lower prices demand will not fall as it has now and we will use up our domestic oil while the Saudis are able to conserve theirs. In the end this would be a blessing for the Saudis as they can milk our oil addiction for a few more years while we destroy our environment in a vain attempt to live our lives as though oil is an infinite commodity. This is a fool’s game. Only through aggressive policies to move away from the fossil fuel world of the 20th century can we hope to retain our prosperous way of life. It’s time to act now before it’s too late.
We can reduce energy consumption by 5 to 10% immediately by deporting the 10% of the population who are illegal alien invaders.
No one seems to point out that our use of petroleum goes far beyond the pumps. Why only advocate taxing the SUV owners? Let’s be fair and tax EVERYONE who purchases petroleum products. Even better, let’s tax according to a person’s “petroleum footprint”…isn’t that as fair as advocating taxing one’s “carbon footprint”? After all, it’s not only the SUV owners who contribute to our need for petroleum. While we’re greening everything to save the planet, let’s make it very “socially incorrect” to use ANY product made from petroleum…to save our planet and show our patriotism, of course. If any of these items are in your possession, then shame on you! You have contributed to our need for petroleum. Yep, let’s tax the heck out of ALL petroleum products and see how long it takes the current SUV tax supporters to cry that it’s unfair.
Okay..here’s my real take. It gets tiring hearing the “holier than thou” comments directed to only those who own certain vehicles when these people’s homes are probably filled to the max with products that also rely on petroleum. It’s like listening to an animal right’s activist lecture on wearing fur or eating meat while at the same time wearing leather shoes, belts, etc.
Here’s a partial list of products with petroleum as an ingredient (this is only a small sample):
disposable diapers
fishing rods
soft contact lenses
safety glass
insecticides
insect repellent
helmets (bicycle, hockey, motorcycle, etc)
eye glasses, sun glasses
tape (clear, masking, etc)
plastic drink bottles
milk jugs
crayons
nylon zippers
plastic hangers
pantyhose
permanent press clothing
flip flops/thongs
fake fur
polyester clothing
ball point pens
ink
computer diskettes
computers
copiers
magic markers
telephones
microfilm
cameras
earphones
footballs
knitting needles
tennis racquets
golf balls
baby aspirin
stuffed animals
band aids
Vaseline
rubbing alcohol
Pepto-Bismol
hair coloring
soap
cough syrup
hair spray
lipstick
denture adhesives
trash bags
egg cartons
freezer bags
candles
wax paper
nylon spatulas
Teflon pans
Formica
linoleum
garden hoses
plungers
floor wax
Plexiglas
spray paint
Anti-freeze
balloons
dog toys
flea collars
CDROMs
check book covers
shopping bags
video cassettes
credit cards
dice
watch bands
How long will talents like Robert Ariail have a medium in which to work, now that The State has become the North Columbia Gamecock Journal of Local Endorsement?
With writers by the hundred and a paper full of irrelevant blubber mostly produced by news services, no wonder McClatchy’s losing money.
Is it ironic that once technology made newspaper easy, it no longer has much value?
While I agree with your conclusion, you forgot to factor in one small thing into your equation- the fact that ANS crude is a “heavy”, “sour” crude. It is far more difficult and expensive to refine, and the gasoline yield is a lot lower than WTI (West Texas Intermediate).
Sorry, that last message was addressed to Bud.
Actually ZZ I made a lot of assumptions that were more favorable than the real-world situation. But the basic analysis is sufficient to show how critical this is.
Over the last 2 days oil has dropped more than $8/barrel. Gasoline futures are off 17 cents a gallon. Time to head down to the Hummer dealer and pick out one of those H2s.
Demand destruction has worked and at least for now we’re likely to see a bit of relief at the pump. But this is just a temporary reprieve. What is likely to occur is a steady decline in gasoline prices until Halloween to about $3.20. Then come next summer the poop will really hit the fan as we forget the lessons of the summer of 2008. I see $6/gallon by this time next summer as Mexico and Russia struggle with production issues.
James- what bike did you buy? i’ve just started looking at scooters.
In 1975, when gasoline went from $0.24 to $0.52 a gallon, consumption fell 30% as drivers hit a cost threshold and reduced driving.
This May, Americans drove 30 Billion less miles than in May, 2007, so demand is adjusting to price.
“In 1975….consumption fell 30% ”
“Americans drove 30 Billion less miles than in May”
According to whom? What was the decrease in consumption then? What was the period of time in which consumption fell in 1975? What are Americans doing instead of driving 30 billion miles?
According to the US Dept of Energy, US Dept of Transportation, AAA, and the Petroleum Council. It has been in the news this week. I keep my eye out for it, being a consultant in transportation.