Oil's Well That Ends Well

I guess Fredo, a creature of instinct if ever there were one, just gets the urge to kick sand for no reason every now and then. It's almost impossible to overstate just how incomplete and malformed his logic is throughout, but when you figure that the entire purpose of this dutifully attended and transcribed circle-jerk is simply to whine about those awful dummycrats in Congress who don't let him have his way (once in a while, anyway), it makes more sense.

I've repeatedly submitted proposals to help address these problems. Yet time after time, Congress chose to block them. One of the main reasons for high gas prices is that global oil production is not keeping up with growing demand. Members of Congress have been vocal about foreign governments increasing their oil production; yet Congress has been just as vocal in opposition to efforts to expand our production here at home.

They repeatedly blocked environmentally safe exploration in ANWR. The Department of Energy estimates that ANWR could allow America to produce about a million additional barrels of oil every day, which translates to about 27 millions of gallons of gasoline and diesel every day. That would be about a 20-percent increase of oil -- crude oil production over U.S. levels, and it would likely mean lower gas prices. And yet such efforts to explore in ANWR have been consistently blocked.

Another reason for high gas prices is the lack of refining capacity. It's been more than 30 years since America built its last new refinery. Yet in this area, too, Congress has repeatedly blocked efforts to expand capacity and build more refineries.

This is, to put it mildly, the usual load of self-serving bullshit.

The Energy Information Administration, which is the Energy Department's independent analytical arm, estimated that if Congress had cleared Bush's ANWR drilling plan the oil would have been available to refiners in 2011, but only at a small volume of 40,000 barrels a day -- a drop in the bucket compared with the 20.6 million barrels the U.S. consumes daily.

At peak production, ANWR could have potentially added 780,000 barrels a day to U.S. crude oil output by 2020, according to the EIA.

The extra supplies would have cut dependence on foreign oil, but only slightly. With ANWR crude, imports would have met 60 percent of U.S. oil demand in 2020, down from 62 percent without the refuge's supplies.

All three leading presidential candidates, Democrats Barack Obama and Hillary Clinton and Republican John McCain, are against oil drilling in the refuge.

The administration says if Congress had acted sooner, U.S. drivers would be getting relief at the pump from the extra oil supplies in the market.

"Opening up ANWR is not long term," Bush said Tuesday.

But both government and private energy experts say Bush is overly optimistic that ANWR oil would be flowing now if Congress had approved his drilling plan back in 2002, because of the years needed to find the crude and develop the fields.

"I would say under the best of circumstances it would take approximately 10 years" for any ANWR oil to make it into the market, said Philip Budzik, an EIA analyst.

"Even if oil was flowing, it would be too small amount to reduce the price" of crude or gasoline, said Daniel Weiss, energy expert at the Center for American Progress, a think tank in Washington.

"President Bush's claim ignores the primary causes behind record high oil prices: a cheap dollar, high demand from China and India, and speculators driving the price up. Drilling and sullying the Arctic would not address any of these causes of high oil prices," said Weiss.

So. He couldn't get the ANWR exploration bill passed even in a Republican congress; none of the three candidates support drilling there (though, as always, anything uttered by either Clinton or McCain is qualified at best, and should always be considered subject to change); and no reputable energy analyst, public or private, sees it affecting prices or import ratios more than marginally.

As for refinery capacity, there's more to that than Congress waving a magic wand. Yeah, I'm sure that if the taxpayers build it for them, the oil companies will be more than happy to have another refinery. But in a peak-oil paradigm, dumping a billion dollars into something with essentially imminent obsolescence, it doesn't make sense from their standpoint. Seriously, every self-proclaimed supercapitalist should get this by now -- what incentive does the oil industry have to affect the price structure in that direction at all? The price has gone up more than tenfold in less than a decade.

I know this may be a shock to Mister Embeay and his remaining claque of goobers, but oil companies don't care that working commuters are paying four bucks a gallon (far more if you account for all the price externalities -- defense budget, force deployment, infrastructure maintenance -- inherent in our "cheap" gasoline). Nor should they; in the predatory capitalist paradise that serious economic thinkers have envisioned and put into place, the only number that matters is what the market will bear, for gas, for housing, for pharmaceuticals, in a stagnant wage market. If you can be distracted from your worsening expense-to-income ratio by cheap high-performance electronic widgets, so much the better.

As Bush himself acknowledges later in the press conference, oil prices are a direct function of capacity margin, of demand meeting and threatening to exceed supply. (There is also risk premium involved, thanks not only to the whacking of the Persian Gulf hornet nest, but things such as domestic terrorism in Nigeria, where pipeline networks have been sabotaged routinely.) Refining capacity, again even if oil companies were willing to act against their own rational self-interest and dump tons of money into more refineries, only affects what can actually be pumped out of the ground and transported to the refinery in the first place.

Here's the thing, and I said this back in '02 at one of the chat fora I was in at the time: I would be all for drilling in ANWR, provided it came with a set of conditions. There is no reason photovoltaic technology cannot be invested in, improved, and utilized for permanent structure energy use, right now. How much oil would that alone free up? Next, all the ANWR oil would be required to remain domestic. No more bullshit about the fungibility of financial and commodity resources in a globalized market; if it's scarce, we're keeping it and using it domestically. I recall estimates from 2002 that a quarter to a third of whatever was found would probably end up in Korea or Japan. Third, reinvest in the railroads. The airline industry is dying on the vine. Put some money and effort into metro light rail systems and intra- and interstate passenger systems. $2 billion a week in Iraq for how many years? How much domestic energy and transportation infrastructural investment could that have accomplished, not to mention education and health care?

Finally and most importantly, at the point we're at, there is no rational energy policy anyone can come up with that does not address the issues of consumption and waste. Reinstate the CAFE standards, tomorrow. The American auto companies will bitch and moan, and cry that such impositions will put them out of business. They said the same thing about seat belts. Funny how Toyota and Honda and Nissan never squawk about having to build more efficient cars; indeed, they seem to take pride in the challenge.

Regardless, we have turned into a nation of fat people driving fat trucks for the most inane tasks, carrying nothing to nowhere. I think anything larger than, say, a Jeep Grand Cherokee should have a definable purpose greater than waddling to the grocery store or the post office. Reasonable people can sort out the sizes and numbers and all, but the fact is that no one even tries; no one, Republican or Democrat, makes much of a fuss. The assumption is that people cannot handle being told that, given the issues of scarcity, cost, and an assortment of externalities, perhaps they're not entitled to drive an RV to the Piggly Wiggly anymore, that in a nation of 300 million people, this shit adds up pretty quickly.

Look through the transcript of the press conference. Bush talks about ANWR, he talks about refineries, he talks about the shameless low-EROEI boondoggle of ethanol. It doesn't even occur to him (and sure as shit, some chump on the street was faithfully regurgitating the received wisdom on the local news tonight, without the benefit of an informed rebuttal) that maybe it's just stupid to pretend that we can keep going like this.

But again, the purpose was never to discuss the actual problems and solutions, it was to tell the rubes that they're always right and congressional dummycrats are always wrong. Does anyone with two stray brain cells left listen to this clown anymore? What if they gave a press conference and nobody came, what if the faithful scriveners decided to forgo a morning of lies and abuse, and just leave Mister Man at the podium?