In the face of $4.00 per gallon gasoline prices, the American public has been inundated with calls from various political, economic, and social sector figures, each with plans and ideas to solve America’s energy crisis. Whether it has been John McCain and George W. Bush’s call for the lifting of the Federal moratorium on offshore oil drilling, Al Gore’s plea to switch to carbon-free electricity production within the next decade, or any of the other myriad plans being advocated to the public, it is quite obvious that our energy production and consumption habits must change, and they must change quickly.
Unfortunately the topic of energy reform has become so politicized that it is difficult for most citizens too see through the political posturing, the partisan blame game, and the half-truths created by the energy industry. There are a variety of alternative energy sources that, used in conjunction, can greatly reduce America’s reliance on foreign oil, and petroleum in general.
While there are certainly untapped oil reserves in the U.S., as well as abroad, it is a fact that the vast majority of the largest oil fields have already been discovered and are currently being utilized. Only smaller and smaller oil fields are left to be found and exploited, with the cost of building the infrastructure to pump the oil from these fields rising as the reserves become smaller and smaller. Barring a monumental global investment in building more pumps and refineries, it is likely that 2005 was the year of peak global oil production - output has fallen every year since, as a result of the aforementioned factors.
Several politicians, Bush and McCain being the most prominent, have advocated lifting the Federal ban on offshore oil drilling, as well as the restrictions on speculation in Alaska’s ANWR. In an election year, such a proposal must be met with skepticism. While many politicians would like to make Americans believe that oil is sitting on our doorstep, just waiting to be pumped from the Earth, the matter is far more complex.
There are two Federal moratoriums on offshore drilling that currently prevent oil companies from accessing what the Department of the Interior estimates to be roughly 19 billion barrels off the Atlantic and Pacific coasts, as well as in the Gulf of Mexico. The first moratorium was enacted by Congress in 1981 and must be renewed every year as part of the Interior Department spending bill to stay in effect. The second moratorium was imposed by George H.W. Bush in 1991 after the Exxon-Valdez oil spill. This executive moratorium was recently lifted by George W. Bush through a presidential order.
Many Republicans are pushing for a vote to lift the Congressional moratorium as well, while Democrats are advocating a plan that would push oil companies to explore much of the land (and sea) that they are already leasing from the government, but have yet to tap into. Even if a Congressional moratorium on offshore drilling were lifted, any new exploration must be approved by the States whose territory exploration might take place in. With many State-level officials, most notably Arnold Schwarzenegger (otherwise a McCain supporter), Governor of California, opposed to such plans, the prospect of offshore drilling seems unlikely. Opponents on the state level cite a range of environmental concerns, and perhaps even moreso, concerns over how such exploration could affect tourism to costal areas, a valuable component of many states’ economies.
Even if new exploration were to take place, it would be several years before any such exploration would translate into true production and potentially lower prices at the pump. Even T. Boone Pickens, the 80-year old Texas billionaire oilman, dubbed the recent Republican attempts to convince the American public that more drilling would reduce gas prices as, ‘totally misleading’. Remember that this is the same man who helped Republicans in the 2004 election by giving nearly $3 million to finance the infamous ‘Swift Boat’ attack ads against John Kerry.
At the other end of the spectrum from the drilling advocates sits global warming’s greatest nemesis, former Vice President, Al Gore. Last week Gore, in a speech delivered in Washington, called on the United States to forsake oil consumption and make a concerted, national effort to achieve carbon-free energy production within the next decade. In addition to averting further contributions towards global warming, which Gore claims has the potential to produce millions of ‘climate refugees’ and cause serious political and economic instability worldwide, he cites the nation’s tangled foreign policy as requiring urgent revision. “We’re borrowing money from China to buy oil from the Persian Gulf to burn in ways that destroy the planet. Every bit of that has got to change.”
For all of his lofty goals, Gore fails to bring the discussion down to the level of specific planning and initiatives. Over the past 25 years he has done perhaps more than anyone to bring the world’s attention to the problem of climate change and the burning of fossil fuels, but much of Gore’s effectiveness stops there. He no longer holds public office, and while he certainly earns a comfortable living, he does not possess the financial capital to make the type of investments in alternative energy that he is advocating. Gore is a mouthpiece to push those who have the means to actually make such investments towards action. And while climate change is still debated by some, Gore’s campaign can do nothing but benefit from high gasoline prices, which may draw the attention of far more of the American public than his warnings of environmental catastrophe ever did.
This is where individuals such as T. Boone Pickens enter the fray. At 80 years old, the geologist who built his wealth by pumping oil out of the ground seems like an unlikely champion of alternative energy; however, patronage of his sort is exactly what the drive towards energy independence needs. Pickens has recently spent $58 million on a media blitz to promote his energy plan for the United States – a plan that includes a $1 trillion proposal to build wind farms across the American Midwest, from North Dakota to the Texas panhandle, one of the most wind-rich areas of the world. And Pickens’ plan is not just talk… he has recently invested nearly $10 billion in the construction of what will be the nation’s largest wind farm, north of Sweetwater, in the Texas panhandle.
Wind farm construction is part of his larger strategy to reduce America’s dependence of foreign oil (roughly 70% of our country’s supply), and free up natural gas reserves to be used as transportation fuel. Indeed, there are a good deal of natural-gas powered vehicles produced by major automobile manufacturers, but few are purchased within the confines of the United States. This writer recalls driving a natural gas powered Ford F-150 in the summer of 2004 during a stint as a Park Ranger in Bristol, RI. There was little, if any, noticeable difference in the function of the vehicle, the only downside being the 15+ mile drive to refuel at one of Rhode Island’s only 3 natural gas refueling stations. This highlights the necessary change in infrastructure that would have to accompany a shift from oil and this change will certainly come at a cost. But as Pickens likes to point out, the $1 trillion investment in wind farms is a one-time investment, whereas our $700 billion addiction to foreign oil is an annual cost.
At the moment natural gas is significantly cheaper than oil, with natural gas selling in Rhode Island at $2.57 per gallon, compared with prices of gasoline hovering around $4.00 per gallon. In other parts of the country natural gas is even cheaper. Natural Gas can provide an easy alternative transportation fuel, especially in the realm of commercial vehicles, where other technologies (such as electric) have not evolved to the point where they can power large machinery.
But the solutions to the nation’s energy problems do not end with the Picken’s Plan. Americans must realize that it is an imperfect plan, as most are bound to be, and it is merely one man’s effort to create a stronger, more stable America. Other alternatives that can help reduce our dependence on petroleum include the prospect of biofuels, such as ethanol. And while there has been much debate about ethanol’s role in rising food prices worldwide, as essential food crops are turned into fuel instead, there are two companies, INEOs Bio of the U.K., and Coskata of Warrenville, Illinois, who both claim to be on the verge of producing ethanol on a commercial scale without the use of food crops.
Instead of crops such as corn, both companies are pioneering techniques to transform municipal waste into ethanol by heating the waste with a limited amount of oxygen in order to create a carbon monoxide/hydrogen gas. This mixture is then fed to certain bacteria capable of transforming it into ethanol. On top of that, the process uses as little as 1/4th the amount of water needed to grow ethanol crops. Coskata is hopeful that they will achieve a $1 per gallon production cost.
When you consider all this in conjunction with the constant push for more hybrid and electric personal vehicles (Toyota is on pace to sell 200,000 of their Prius models in the U.S. this year), the enormous potential of the American southwest in terms of solar power, potential that rivals the Great Plains states’ potential for wind power, the continuing increase and developments in recycling, and the dizzying array of everyday ‘green’ items like compact fluorescent light bulbs, there seem to be few limits to the alternative energy resources that we can harness.
America can, and will, solve its energy crisis, it is only a matter of time. With $4.00 per gallon gas perhaps being the tipping point for American society, more and more people will turn to alternatives such as hybrid cars and public transportation. As always with our capitalist society, once conditions begin to adversely affect our pocketbooks, then the potential for real change is upon us. Hopefully with more investors in the energy sector emulating the Pickens Plan that change will come soon.
Sources:
Drilling’s Lure
NYT Editorial Board
The New York Times – July 15th, 2008
Democrats Dig in as G.O.P. Presses for Oil Exploration in Protected Areas
By Carl Hulse
The New York Times – July 11th, 2008
Gore Calls for Carbon-Free Electric Power
By David Stout
The New York Times – July 18th, 2008
The Oil Man Cometh
By Timothy Egan
The New York Times: Op-Ed – July 24th, 2008
From Garbage to Gas Tank: Trash as Biofuel
By Jessica Marshall
Discovery News – July 23rd, 2008
