Cheap vs Obsolete: Is the ‘Oil Drilling Debate’ Masking the Real Issue?

Several media sites have recently wrote scathing reviews of Bush’s plan to open up protected areas to drilling, while other media agencies wrote glowing reviews. Is it a political move void of all reason and common sense, or an enlightened plan to help Americans? President George W. Bush recently urged Congress to overturn a 26-year ban on offshore oil drilling in the U.S. and also open a part of the Arctic National Wildlife Refuge (ANWR) to petroleum exploration. The arguments for and against were polarized, but for the most part, they all made some fair points, which begs the questions: Is it a good idea or not? Will it really make gas cheaper or not?

But the real underlying question being skirted around is this: Should we be focusing on making oil cheap or should we focus on making it obsolete? Of course in an ideal world, gas would be cheap and increasingly obsolete. We don’t live in an ideal world. It’s a catch 22 for Americans who are suffering from high gas prices, and it’s only natural to want to find ways to relieve that pressure quickly. The concern, however, is that by focusing on unrealistic “quick fix” solutions, we are just scraping ourselves up a little more time to keep avoiding the real issue.

It is not certain whether or not drilling for oil in the US will lower gas prices. For now, that answer is largely a matter of speculation (and will therefore depend almost entirely on who you’re asking) but there are a few basic facts and premises that can help us make sense of the debate. There’s not an absolute right or wrong, but we have to consider the cost/benefit ratio and consider which side makes the most sense. According to a 2004 study by the government's Energy Information Administration (EIA) drilling in ANWR would trim gas prices only by 3.5 cents a gallon by 2027. Even if we immediately opened the entire outer continental shelf to offshore rigs, and all of Alaska, the impact on gas prices is estimated to be very small and would not arrive until years from now. It wouldn’t even make a dent in prices at all in the immediate future, because there aren’t enough refineries to process large amounts of crude oil, and those would take time and considerable expense to build.

But on the other hand, finding huge oil reserves in the US could send a message to the market that there’s even more oil to go around, which could put speculation under control—at least for a little while longer. But will it? Based on past trends, probably not. Even if we found huge oil reserves, and we already know there are some out there, it’s not likely to change market conditions all that much. The world already has more than enough supply to meet demand. Oil prices are based on a global market, and even in the best-case scenario, the dent the US can make in that market is negligible. We simply do not have enough oil reserves—even in a wildly imaginative and positive scenario—to significantly change the price of oil in the global market.

Some politicians have publicly stated that they actually want higher gas prices. It’s the only way to wean ourselves off of our unhealthy addiction they say, but this view certainly lacks immediate compassion for the working class that has to find a way to get to work every day and still put bread on the table to feed their children. Environmental ideals are important, but they seem elitist and cold-hearted when you stack them against America’s families. However, the sad truth of it is that there will likely be no noteworthy relief in gas prices whether we drill or not.

But even if drilling did lower prices substantially and give immediate relief—a prospect that even Bush himself says is unlikely—no one can logically argue that oil will last forever. Peak oil is a real concern, so why aren’t we trying harder to get off of our oil addition altogether? Many question the validity of pouring money into even more oil infrastructure. Ideally, oil will be a non-issue sooner rather than later. It makes more sense from a long-term perspective to invest in clean renewable technologies that will always be there for us to rely on. Yes, we need oil at the present moment, and even in the best case scenario we will be at least partially dependent on oil for another decade or so, but if our predominant focus is on making oil cheaper, that’s only going to get us further away from the ultimate goal of making oil obsolete. 

Posted by Rebecca Sato

Related Galaxy posts:

Exponential Technologies: Cheer Up World—We Are On the Verge of Great Things
The Renewable Revolution: World's Biggest Solar Farm Is About to Open—Is the End of Oil Near?

Related articles:

http://www.nytimes.com/2008/06/19/opinion/19thu1.html

http://www.foxnews.com/story/0,2933,368221,00.html

http://www.time.com/time/business/article/0,8599,1815884,00.html

http://www.huffingtonpost.com/robert-menendez/bush-and-mccain-drilling_b_107839.html

Comments

[Yordan Yanakiev]

Never gas will be cheep again.
It's up to us - if we develop cheep, elegant and ecological vehicles,
or try to stay on gas fuel, until world war 3 ( aka fuel war ) begin.
It's simple to understand that when oil of arabs and asians stop, they will start wars, and try to conquer new teritories, becouse they will fast overrun supplies, and this time money will no more come.

So - there is 2 ways to prepare for future :
1 : Prepare your weapons for mass destruction in order to preserve your family and country.
OR
2 : Prepare your scientist and researchers to build future eco vehicle, and save not only climate, but peoples for war and misery.

Future is comming whatever we want it or not.
It's up to us - if we have will to live on Mars and be happy, or live on bunkers and be misery.

This is first time in history when science can save us from the war.
I hope if we do not miss this oportunities.

[nepharous]

The continueing arguement about the use of oil sounds like a junky making excuses to keep using smack. Cold turkey sucks and it hurts but this country needs to find it's backbone again and "tuffin up". By hurting now we effect evolution on ourselves and potentailly save the next generations from the greatest pain of all, planetary annilation.

[Don Ansley]

Too many people depending on gasoline for transportation, that's the problem. More oil would only stop the rapid increase in the price of gasoline. That would help for now. Gas is the cheapest fuel for transportation. You might some day drive with electricity or hydrogen, but those are not even a dream for today. And oil will never be obsolete, too many other products made from oil. So forget what wild deamers say about doing away with oil, that won't happen in any of our lifetimes.

[richard mruz]

you have to KNOW that if a moron[bush, look up the definition for real insight], is for something, then it is probably in the best interest of the human race to disregard it out of hand and move forward.

[martin weiss]

Applying a cost/benefit ratio to the petro problem is akin to applying a cost/benefit ratio to life on earth. Oil is not the central problem. Industrial civilization is poisoning us and the environment alike. Our rivers are poisoned with chemicals. Our fish are poisoned with mercury. We can no longer drink the waters of earth-- they are polluted with the run-off from Dow and Monsanto. Applying a cost/benefit ratio, industrial civilization is stamping out life. We can no longer fill our world with poisons or else there will be no life to rationalize whether we should continue to utilize the buggy-whip solutions of past generations and entrenched wealth and industry.

[JOhn Seymore]

OMG McBush is such an idiot. I cannot believe that anyone with a single ounce of common sense would actually consider him.

JT
http://www.FireMe.To/udi

[MM]

There are real people suffering real pain of hunger with the high price of energy. They have no alternative now other than drive to work and the cost of fuel is taking food from them. My wife works in a place that feeds children for free and the parents for reduced prices. This year she is seeing many parents that can not afford a meal for themselves every day. When I hear politicians (and people on sites like this) bickering about solutions that may help a few years down the road it makes me sick because we have hard working people that are doing without food in oder to survive. We need quick help for those people and a long-term energy solution.

So what can be done now to help those who must decide between gas and food? What is our plan to provide a sustainable, ecologically sound energy source? Stop bickering and name calling and start finding solutions.

[venduco]

Gasoline is cheaper in the US than in many other successful developed economies. I wonder why americans complain so much about just $4/gallon when most of us in the rest of the world already pay more? Here in New Zealand, business and life seems fine at $6/gallon. Europe the price is even higher. What are these countries doing for the working class that the US is not?

[Tom]

There is something that will have an immediate impact on gas consumption in the US, and thereby lower demand and gas prices. It is cheap to implement and has the side benefit of saving lives. It has been historically shown to be effective, and the only side effect is that it might take you an extra 5 min. to get to work.
Lower the speed limit back to 55 MPH.
""Sure, it'll save a few lives, but millions will be late!"
Homer Simpson

[Ohh My God]

There is no ban on offshore drilling. In reality, there is a moratorium on drilling in certain coastal areas. Other areas are not only open to drilling but leases and drilling permits have already been issued.

And they are not being drilled.

In fact, only 17% of the leased areas is in production. So, with about 33 million acres of offshore areas already available to drill and not being drilled, why does the oil and gas industry need to have access to still more?

http://www.dailykos.com/storyonly/2008/6/18/134047/614/81/537906

[Kevin]

You do two things.

1. Innovations take time. You must drill for more oil now to take care of the next 5 - 10 years. They are hitting all kinds of oil in Utah. Even in places they gave up on.
2. Fund scientific research at Universities Worldwide. There are many close things happening now, however it will take years and lots of $$ to make it really viable.

Take solar power for instance. I have been following this for 5 years, hoping to install it on my house. However it would take 30k US to do it now. Research and online journals talk about all kinds of new solar technology on the horizon, some just like paint, and promises to bring this to market long before now. Still nothing. They are having a hard lowering manufacturing costs.

I just saw a video about a car in Japan that runs on water. Pretty cool. So we are on the horizon of some of this technology, but I can not afford 30k for a hybrid car right now, nor 30k for solar.

The price must drop to make it affordable.

So the bottom line is we have to do both. Drill for more oil, build some refineries, but invest in future technologies.

[wouter]

Hear Hear!

[sly]

Obviously making the use of oil obsolete would be the way to go,renderig the U.S. and other countries unreliant on the major oil suppliers. However, it has to be remembered that the U,S. oil companies have Bush and family in their back pocket. Baby Bush is more that likely trying for that one last favor for corporations before he takes a seat on their boards once he leaves office. There are oil leases in the Gulf of Mexico, in U.S. waters, that are sitting idle so I would image that Baby Bush's plan would include some financial break to get the companies back to what they just up and stopped doing in the 80's because it was cheaper for them to let someone else do the drilling. These corrporations are more concerned with making profits with as little expenditure as possible than having the U.S. energy independent.

[martin weiss]

In 1981 there were more than 350 refineries in the US. Today there are 148. Reducing the number of refineries limits supply and thus raises the price.
Remember when Enron kept electricity off the market to raise prices?
Nevertheless, as the article headline says, petroleum is obsolete and I hope fuel cells become marketable soon.

Entrenched interests are keeping alternate fuels like ethanol and diesel made from hemp off the market. Hemp has many qualities that recommend it, like it enables farmers to replant their own seed and become independent of big oil. Hemp fiber would eliminate logging the national forests for toilet paper. Hemp grows on land unsuitable for other crops. Growing hemp does not raise the price of food made from corn and soybeans like current ethanol and bio-diesel production does. Hemp would replace the logging of tropical forests to grow oil-producing trees, destroying ecological resources that are critically important. But oil co's. pharmaceuticals, and other entrenched interests eliminate not only competition, but innovation.

[Jim Oase]

Our need is another more efficient way to create shaft rotation. Common schemes today are mostly heat based. The exceptions are solar, wind and moving water based where we harness natures energy to create electricity.

Lets say we go 100% electrical and we get 100% of our power from nature than we need a way to store and recharge electricity in a smaller area than current battery based schemes because we need portable power to replace the fuel tank.

Anything short of 100% of our power coming from nature means we need to find something to burn. Burning means residue and consumption.

I think our efforts have a three pronged need. Find more oil, the fuel we burn today. Find more efficient ways to convert energy to rotational force, I think that will be electrical. Find other things to burn that can be renewed faster than we can use them. Ethanol may not be the only burnable product we can make from corn. Corn may not be the best source of burnable products

Jim

[Sean S]

Instead of thinking that america needs relief in "oil" prices, let's instead say "fuel prices". Then understand that it would take at least 10 years for off shore drilling and ANWR exploration to pay off in nominal savings that would no doubt be undetectable by then, and it would take a similar amount of time to develop alternative renewable "fuel sources" that are exponentially cheaper and don't require a subserviant diplomatic positioning with human rights and political counterparts such as Saudi Arabia!

Any further investment in oil infrastructure is not only money wasted, but money that will hurt America as a whole.

[jared]

we could have completely electric cars now, our only limitations on electric vehicles atm is power storage/comsumption

the oil companies are going full force on next-gen battery technology. them inventing something means itll be patented so no one else can use it, and itll be thrown in a closet til Big Oil isnt making money from oil anymore. or they can hold the tech ransom and keep the price high on them, like theyve been doing with seperater films for lithium ion batteries since they came out. and we wondered why the Li batteries werent coming down in price.

[jared]

we could have completely electric cars now, our only limitations on electric vehicles atm is power storage/comsumption

the oil companies are going full force on next-gen battery technology. them inventing something means itll be patented so no one else can use it, and itll be thrown in a closet til Big Oil isnt making money from oil anymore. or they can hold the tech ransom and keep the price high on them, like theyve been doing with seperater films for lithium ion batteries since they came out. and we wondered why the Li batteries werent coming down in price.

[adam]

I like how in the article she says there's plenty of oil supply. That would be news to BP, who said in their world energy review 2007 that global oil production declined while global oil demand increased, leaving a shortfall between production and demand of over 1 million barrels.

[adam]

I like how in the article she says there's plenty of oil supply. That would be news to BP, who said in their world energy review 2007 that global oil production declined while global oil demand increased, leaving a shortfall between production and demand of over 1 million barrels.

[Evil One]

Strange - but we can burn butanol in ICE engines, we can make biodiesel from cooking fat and we can also create oil from bacteria and gasoline by heating plant matter in the presence of a catalyst.

The options are there. LETS DO IT

[Evil One]

Strange - but we can burn butanol in ICE engines, we can make biodiesel from cooking fat and we can also create oil from bacteria and gasoline by heating plant matter in the presence of a catalyst.

The options are there. LETS DO IT

[Crian]

This is exactly the point I have been trying to make with some conservatives, yet they refuse to see the light of day. For the U.S to be prosperous in this new age of competitiveness, it must think in the long term rather than the political short term.

[Brett]

Are we all a bunch of IDIOTS!!! We send soldiers to DIE in IRAQ for OIL, but were worried about POLAR BEARS. It just makes me sick how dumb americans can be!

[Brett]

Let me just say this again. Were worried about POLAR BEARS!