Last evening I had the opportunity to join a small group of age 40 somethings for dinner. (Pizza Party Group) As a sign of our times, the discussion got around to politics and energy. As the elder statesman and retired oilman, I enjoyed the lively discussion on energy. As in most groups, there were differences of opinion, but they were narrower than I expected.
Most felt that our energy mess is the critical issue facing our economic turnaround. Most felt the high crude oil prices and their effect on everyone, and the loss of jobs they caused convinced the public we must move on this. Most felt we are moving forward. There seems to be confidence that we are turning the corner.
My concern for their children, my grandchildren, is not shared to my degree. It was mentioned that Jimmy Carter made this same pronouncement in the 70’s. Didn’t happen. But, if we had reelected Carter and not Reagan, it may have happened. This time we are in a bigger mess, and we may elect Obama who will out-Carter, Carter. Timing could be bad.
Let’s go back to energy and the idea that we are turning the corner. I disagree, and here’s why.
Until we declare the equivalent to war on our energy mess, we will make very little progress. The global demand reduction, due to the global economic problems wrought by the United States credit mess, is pushing the oil price down. But, the 85 million barrels per day production in 2008 will be 82 or 83 million barrels next year. Developing countries will make up our reduced demand due to our worsening economy. OPEC will mess with production to try to get the price back up. Every effort we make to increase domestic production will be met with litigation. Just as it is today. Until the Feds stop the lawsuits that delay all efforts an average of 5 years, it will be far too slow to help us save our economy. The auto and airline industries will fail.
Let’s say we hit bottom and reality comes to us. The Feds stop the delays. We will be OK, right? No, we won’t.
The rest of the world has been busy tying up the resources we will need to move forward. Nuclear. We have no expertise in this country to build plants anymore. We get in line behind the 50-100 plants under contract in other parts of the world. to pursue offshore drilling, platforms are needed. Again, other countries are contracting for platforms. The companies who know how to use them are the ones we are threatening with windfall profits taxes. The most efficient solar effort under construction today in Arizona will bring power on at seven times the cost of the nuclear power in Arizona. Plus, it uses a lot of water. Guess what, lawsuits are being initiated over the water and the power lines. You want to buy some power for seven times what you pay now? And, what you pay now will go up two fold next year due to current costs that are capped.
The Sarah Palin pipeline to bring natural gas to the lower 48 for $40 billion will take 10 years at best. Even if the U.S. stops litigation, it must go through a multitude of Indian reservations in Canada and they must agree.
The truth is you don’t dig for 30 years to build a huge energy hole and expect to fill the hole in a year. Plus, you have both candidates in favor of cap and trade. This will increase energy costs significantly and stop many new efforts.
When you lose touch with reality and buy into fantasy ideas about how you fuel a nation with some idea called renewable energy, but you don’t have any at a fair cost, you go out of business.
There is no bailout for this problem. This is the reason we will not recover from the economic mess we are in and we will have a long period of readjustment to get back to where we are today. Countries that haven’t bought the fantasy like China, Russia, Brazil, India, France, and Canada will move forward while we move backward.
Sorry to bring a little reality to your fantasy world, but this is the way it is. Your government and your media will continue to spin you. You better get it right and tell them you’ve had enough. You may not like Sarah Palin, but she gets it. She is the only one on the top of ticket of either party who does.
Several months ago, I sent numerous letters to Bush, Congressional leaders and News paper editors that President Bush should declare America a National Disaster as a result of the Oil issue and its impact on our economy. Congress has done nothing and now that Oil prices have come down below $90/b this morning, people have kind of forgot about the oil issue and are too focused on and watching their 401k’s and investments falling as a result of the economic decline. In my mind, Oil remains the primary issue facing our country and we need to continue making a major issue until something is done.
Like the bail out, the American people need to step up their efforts by calling and sending letters to our congressman to get them to move as quickly on oil as they did for bailing out Wall Street. I doubt we’ll see anything happen until after the election and only if McCain/Palin get elected, but even if they are, they’ll still be faced with having to deal with the liberals and those who continue to put up road blocks with the premise that drilling will damage the environment.
Even though Bush is a lame duck and has not done enough on this issue, he can still make an impact by requiring Congress to take action before he leaves office. If McCain/Palin do not get elected, I’m afraid we’re doomed and our country will quickly slide into a recession that will make 1929 look like a picnic.
Bill,
Good to see you the other night and glad to see that Pizza Night gets a shout out on your blog!
I agree with your statement that we won’t get out of our energy mess unless we declare war on it. However, I think your focus on oil and nuclear as the only answers leaves out so many other options that can do so much more for us in timeframes similar to building new nuclear plants and drilling the continental shelf.
If we collectively spent $10 billion a month on renewables and alternative energy, that solar project in Arizona that you mentioned would look much more viable. How far would $10 billion a month go to funding clean coal projects or funding basic R&D to improve solar efficiency (or putting solor panels on millions of US roofs). How many windmills could T. Boone Pickens buy with $10 billion a month? How many cars could be converted to run on CNG and how many service stations could be retrofitted to deliver it? How many jobs would be created right here in the United States to create, develop and deploy such technology? How much cleaner and safer will the earth be for our Pizza Night kids if we spent $10 billion a month to figure out how to stop pumping our skies full of carbon dioxide and stop funding dictators that don’t like us very much?
I agree with you that our nation is not yet serious about getting ourselves out of that 30 year hole but I think the first thing we need to do is stop digging! Digging holes in the continental shelf (outer or inner) is not a strategy to energy security or independence. At best, digging holes in Alaska can only help on the margins. Let’s be Daniel Burnham for the 21st Century…. no small plans! The United States put a man on the moon in less than 10 years! Nobody can stop the American people if we have the leadership we need to fulfill such a vision.
Chris
Ah, Chris. Nice to find someone who believes in the renewable rescue. But, what if it doesn’t work. It’s like Texas Holdum. All in.
Bill