[NOTE: This is the latest installment in an ongoing PeakOilMatters series (which started here). It’s about finding a new and better vision to get to, through, and beyond Peak Oil and its widespread impact on what we produce, how we produce, and how we live. We won’t be falling off a cliff tomorrow, and the full brunt of Peak Oil’s effects won’t be experienced all at once, either. Gas and oil do not have to disappear entirely, nor do gas prices have to rise into the stratosphere before Peak Oil’s impact is felt.
Gradually, but inexorably, changes will be in the offing, however. We need to come to a better understanding of this, and start preparing ourselves now for the lengthy transition and just as lengthy ongoing impact of Peak Oil on all of us. Many issues must of necessity be considered, and I hope to make a contribution to the public dialogue we need to have. I hope you’ll find the discussion of these objectives enjoyable as well as beneficial. We have more of a voice than we think we do. Finding that voice just might be our best hope.]

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“The United States continues to slumber while a catastrophe lies in wait. Increasing numbers of analysts and policymakers are warning of another super price spike for oil and the likelihood of “peak oil” more generally….
“Even if global oil production increases in the coming years, if there is less available for oil-thirsty nations like ours the situation will be far worse than total oil production figures would otherwise suggest.” [1]

“As demand grows in the next decade, we will not have the oil-production capacity we will need to meet demand….The $140- per-barrel oil price of three years ago was not an aberration — it was a warning.” – Shell Oil Chief Executive Officer John B. Hess. [2]

Not the cheeriest way to start, but damned annoying facts are damned annoying facts.

So what are our enlightened leader proposing in these last few weeks? Let’s take a look:

The President, reiterating prior policy recommendations (and in doing so pointing out that his Administration is currently engaged in developing the country’s oil and gas resources, notwithstanding fictitious allegations to the contrary by some Republican officials), is again calling for a long-term, “comprehensive energy strategy.” The President added: “We need to increase our access to secure energy supplies in the near term and we’ve got to make our economy more energy-efficient and energy-independent over the long run.” [3]

Unfortunately, those recommendations aren’t all that unlike the proposals put forth by every President in the past forty years. Great sound bites, but until we actually start doing something about the actual problem instead of whining about higher prices and seeking genuinely dumb short-term solutions (see Jim DiPeso’s commentary on why adding fuel supplies to the marketplace by opening up our Strategic Petroleum Reserve is the wrong strategy), our next few Presidents will likewise make the same call to end our “addiction” to foreign oil … until declining oil production in those intervening years makes it obvious even to the entirely delusional that there won’t be many “fixes” left. We might not want to wait until then to start doing something….

In that same article cited above, President Obama indicated that his office is considering new oil-and-gas development onshore and offshore in Alaska while trying to strengthen relationships with non-OPEC oil-producing countries like Brazil. In a direct challenge to continuing and by now tiresome GOP assertions that drilling for more oil is the be-all and end-all of our fossil fuel worries, Mr. Obama pointedly stated that drilling is “not a long-term solution.” (See this.) His recent proposals, however, leave much to be desired….

During the Bush Administration, the United States’ Energy Information Agency issued a report (updated and confirmed in its 2009 follow-up: “Impact of Limitations on Access to Oil and Natural Gas Resources in the Federal Outer Continental Shelf”) in which its analysis of the difference between full offshore drilling (“Reference Case”) and restricted drilling (“OCS limited case”) concluded there would be no impact on gasoline prices in 2020, and a whopping “three cent” (that’s not a typo) per gallon decline by 2030.

GOP officials who continue to tout drilling never get around to mentioning that little factoid. Of course, they also never bother to mention any other facts about drilling off-shore or in the Arctic such as the extreme exploration conditions which must be accounted and paid for, the length of time that will pass before full production (such as it may be) will be reached (i.e., several decades), and an assortment of other bothersome little details which would only contradict the “benefits” their sound bites imply. It goes without saying that there is no mention of the current political turmoil in the Middle East and parts of Africa … annoying considerations which most market analyst experts believe to be primarily responsible for recent price spikes. What good are experts if a good political sound bite is available instead?

And if a sound bite won’t work, there’s always Oklahoma Senator James Inhofe to interject a healthy dose of nonsense. The Senator is of course pointing fingers at the Obama Administration for recent gas price hikes, albeit via a rather curious sidetrip into … dumb as the basis for his allegations. As Steve Benen pointed out in a recent post (the GOP does keep him busy!), Inhofe attributes the price increases to the President’s “goal” to address greenhouse gas emissions. Not current legislation. Not an actual law. Just an objective … which, as Steve noted, sadly has no chance whatsoever of becoming law anytime soon.

Steve said it best: “[T]he GOP doesn’t have a serious energy policy. It only has a pro-oil policy.” [4]

They say these things and they seek to pass legislation based on these “beliefs”—which will harm the great majority of us while favoring the wealthy few—because we let them. That is a sad truth….We’re better than that.

Once again, more damned facts: The GOP budget proposals call for drastic cuts across a broad spectrum of programs, among them renewable/alternative energy research. Fortunately, (as I mentioned in a recent post) every single House Republican did vote to extend government subsidies to the oil companies. Thank God! (For a genuinely ridiculous “defense” of this legislative pursuit by the usually ridiculous Rep. Joe Barton of Texas, read this.)

At least the oil companies won’t be asked to suffer the consequences of budget reductions as will women, children, students, medical patients, Medicare recipients, the unemployed, our national infrastructure, our environment, or our national security—all of which have been targeted by Republican budget-cutting proposals. Let’s not forget that these budget cuts are not supported by significant majorities of Americans in various recent polls. American majorities do support cuts in foreign aid, getting our troops out of Afghanistan and Iraq, and repealing the Bush-era tax cuts for the wealthy. But why should that matter? It becomes more obvious with each passing day that money talks loudest….

Good to have priorities….Integrity and our future well-being? Not so much.

The truth is that oil production worldwide has been on a plateau for more than five years. (A blip here and there is no cause for celebration or relief that all is now well once again.) Despite the leveling off of production, prices are still rising. So if prices are still on the increase and most oil producers are not taking advantage by … producing more so that they, you know … make more money, then this suggests that are some fundamental problems beyond just supply and demand. (U.S. oil production actually increased last year, and prices still rose.) Perhaps the GOP might prevail upon the President to use his magical superpowers to create more easily available, inexpensive oil which can come into the market by … perhaps next Tuesday?

Extreme and unwarranted measures targeted at lowering gas prices to appease consumers today is a band-aid solution and nothing more. It solves nothing … unless the objective is to merely ignore the problem, postpone both planning and implementing the changes which are on their way, all so that we’re creating more problems for ourselves down the road.

In that case, then by all means: drill, baby, drill.

More to come….

Sources:

[1] http://www.energypulse.net/centers/article/article_display.cfm?a_id=2393; The Peak Oil Catastrophe-In-Waiting by Tam Hunt – March 10, 2011
[2] http://www.bloomberg.com/news/2011-03-08/u-s-should-mull-1-gas-tax-boost-auto-efficiency-hess-says.html; U.S. Should Consider $1 Gas Tax, CEO Hess Says By Jim Polson and Edward Klump – Mar 8, 2011
[3] http://thehill.com/blogs/e2-wire/677-e2-wire/149005-amid-rising-gas-prices-obama-calls-for-long-term-energy-strategy; Amid rising gas prices, President Obama calls for long-term energy strategy By Andrew Restuccia – 03/11/11
[4] http://www.washingtonmonthly.com/archives/individual/2011_03/028346.php; A RENEWED DEBATE OVER ENERGY (THAT PROBABLY WON’T GO WELL) – March 9, 2011