At Witz' End - Gas Prices: Alternatives and Oil Supply
Part of the problem is speculation: individual and institutional investors betting on higher future oil prices. Another big factor is the very weak U.S. dollar. But the bulk of the reason oil and gas prices have climbed so high is that age-old Economics 101 supply/demand equation. Global demand, especially by developing countries, continues to grow, while supply does not.Most agree that conservation is the critically important first step in altering that equation. Next comes development of alternatives, some that can propel our vehicles, others that cannot but can displace oil and natural gas now being used for energy production.
Should we pursue:
Alternative energy
Clean coal -- Yes! Coal gets a bad rap, but the U.S. is the Saudi Arabia of coal. We have vast supplies that can be mined more safely and burned surprisingly cleanly.
Nuclear – Yes! France gets 80% of its electricity from nuclear. We've been afraid to build new nuclear plants for decades; but once we do, it's safe, cheap, clean and carbon free.
Solar – Yes! Solar panels are expensive, and huge arrays provide only modest power. But once they're in place, it's cheap, clean and carbon free.
Wind – Yes! Big investment but cheap, clean and carbon free once installed. Biggest challenge is finding suitable isolated areas, since no one wants to see wind farms.
Hydro – Yes! There must be more opportunities for clean, inexpensive, carbon-free water-driven electric power that could and should be exploited.
Alternative fuels
Diesel – Of course! It's a petroleum fuel very costly to emissions-cleanse compared to gasoline, but it offers higher fuel efficiency. Biodiesel is better but tricky to use and hard to get.
Alcohol – Yes! Nationwide use of E10 (10% ethanol, 90% gasoline blend) can displace 10% of gas with no modifications to vehicles or distribution infrastructure. E85 could some day displace another 75% but requires E85-capable vehicles, dedicated tanks and pumps and rail or truck distribution. Its production should not compete with human or animal food, but the long-range potential of low-cost cellulosic ethanol from non-recyclable materials, waste and garbage that would otherwise go into landfills is huge!
CNG – Sure! Compressed natural gas is cleaner and cheaper than gasoline with the convenience of home refueling. The downsides: bulky tanks, less range and few public fueling stations.
Hydrogen – Why not? Tough to transport and store, low energy content and huge infrastructure investment but essentially emissions free whether burned in cylinders or consumed in fuel cells.
Alternative propulsion
Battery EVs – Yes! Still expensive and range-limited, but their appeal increases as gas prices rise and batteries improve. No tailpipe emissions but total well to wheel emissions depend on the electricity source.
Hybrid EVs – Yes! But their high cost is still subsidized by manufacturers. Single-mode hybrids (Toyota, Honda, GM, Ford, Nissan) save gas in mostly in town. Two-mode hybrids (GM, Chrysler, BMW, Mercedes) save at highway speeds as well. Plug-in hybrids with range extenders (Chevy Volt) promise huge savings at still-higher prices. Expensive high-energy, vehicle-size lithium-ion batteries will be the key.
Fuel Cells – Yes! Still a long shot due to cost and lack of hydrogen infrastructure. Only tailpipe emission is water vapor, which is clean and pure (but the major greenhouse gas).
Anything I've forgotten probably should be pursued as well, not through mandates or taxpayer subsidies but in competition with everything else on the free market. Gasoline has been by far the most affordable energy carrier for most of our lifetimes, but the higher oil and gas prices climb, the more competitive alternatives become.
Increasing supply
The third hugely important step is increasing supply...our own, not someone else's. There is more available oil within U.S. territories – many miles offshore, in shale formations in Colorado and other states and in the unfortunately misnamed Arctic National Wildlife Refuge (ANWR) – than in the entire Middle East. Yet we are prevented from exploiting it due to outdated environmental concerns.
Is there any other country that refuses to exploit its own resources, preferring instead to increase its dependency on oil from other countries, many of which are dangerously hostile? Obstructionist excuses ring increasingly lame: "If we start drilling in ANWR today, it will be 10 years before that oil would be available." Really? Then we'd better get started!
If Bill Clinton had not vetoed ANWR drilling in 1995, we would already have been enjoying huge output from there for several years...and paying much less for it. ANWR is said to be capable of yielding enough oil to replace all we import from Saudi Arabia for 30-40 years.
The truth is that some new U.S. oil could be available in a year, and much more in two or three, depending on the sources. And simply deciding to go after our own supplies, then doing it, will deflate prices by cooling speculation and putting unfriendly sources on notice that we won't depend on them much longer.
Modern methods are environmentally safe. There has been no leakage from Gulf oil rigs following Katrina and other major hurricanes. Way (out of sight) off-shore rigs are creature-friendly man-made reefs. Land-based horizontal drilling leaves eco-environments untouched.
ANWR is mostly barren wasteland at the far northeast corner of Alaska, so comparisons to Yosemite or the Grand Canyon are absurd. The potential exploration area would use just 200,000 of its 19 million acres, equivalent to a postage stamp on a football field. And the very few species that live there will love it, as they do the existing Alaska pipeline.
If the U.S. has more available oil than all of the Middle East, why are we importing any from there? America could be the world's largest oil producer. Instead, we produce just 1.9 billion barrels a year while consuming 7.6 billion, and the estimated 9-16 billion barrels in ANWR, 86 billion on the Outer Continental Shelf and 800 billion in shale remain off limits.
Of course we should set aside pristine parks and wilderness areas. But not all of the east coast, all of the west coast, all of the Rocky Mountains and all of ANWR.
The anti-oil mantra, "We can't drill our way out of this," may well be true. But who can argue with a straight face that substantially increasing America's oil production would not help lower global oil and U.S. gas prices...while vastly improving our national security? The 20-plus percent of Americans who say they don't want to increase America's oil supply by (cleanly and responsibly) going after our own enormous sources must be rejoicing in today's high prices.
While we're at it, let's build more refineries. Insufficient U.S. refining capacity is another element of our own domestic high-demand, short-supply, high-gas-price situation. Yet, due to high cost and political opposition, we have not built a new one for more than three decades.
What should we do to drag down oil and gas prices, which are inflating the prices of everything, destroying household and business budgets, killing jobs and weakening economies around the world? Everything we possibly can as quickly as we possibly can!
Let's stop fighting over which measures we favor and which will take longer and get busy working on them all. You pick your favorites, I'll pick mine. But don't rule out any just yet.
Reader Comments (Page 1 of 2)
Tony Belding 9:18AM (7/14/2008)
What we have today is a conflict between two philosophies as we approach different sources of energy. . .
1. We can't afford to guess which technologies are going to be the winners. Let's do it all! There is no silver bullet, we need every energy source we can get. So, let's throw everything at the problem and see what sticks.
2. We can't afford to waste resources going after solutions that are problematic, or inefficient, or too far out into the future. We need to identify what's most efficient and workable in the near term and focus our efforts there, so we can get the maximum payback.
Clearly Gary falls into the first camp.
I think most die-hard Peak Oil people would fall into the second. Their view is that we're in a race against time, to get off oil very quickly -- while the very resources we need to complete that change will be rapidly disappearing. Put your money into something that doesn't scale (like wind) or takes too much time and resources (like nuclear) and we're all dead: civilization collapses, and you might as well start filling out your application to join Lord Humungous's roaming horde.
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AlexNC 9:24AM (7/14/2008)
The main problem with hydro is that it stops the ability for migratory fish to make their year trips up stream to spawn. If you take away this major source in the food chain, it will have huge repercussions throughout the food chain. Not to mention all the other species that are affected my the limited sediment transport that are imposed by dams.
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Nikax 10:20AM (7/14/2008)
good heavens, I didn't realize that the US has unlimited financial resources to simultaniously develop all of these technologies. Has Mr. Witzenburg done even a little bit if the math involved here? How much does it cost to bring a new nuclear plant online, and when did nuclear waste suddenly become "clean?" And how about the economics of clean coal...the only one I know of that was being constructed was abandoned by the coal industry as being economically inviable.
So the coastal waters shouldn't be off limits to drilling. OK, so what parts of the coasts are we going to give over to drilling and possible spills? I can't imagine one part of the west coast that could be risked, for example.
No one wants windmills in their backyard? Has the author actually looked at windmill installations in say Nebraska, or the Dakotas? Those are might big back yards out there. But heck yes, I'd love to have a small windmill in my yard, why not? Oh, and does anyone want a nuclear plant in their backyard?
Frankly, I've read better analysis from high school kids than this.
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Tony Belding 12:52PM (7/14/2008)
Nuclear became "clean" when CO2 became the main pollutant that environmentalists worry over. Then again, one might easily argue that nuclear has always been way cleaner than coal. With coal everything is sprayed right up into the atmosphere.
"Does anybody want a nuclear plant in their back yard?" Just ask the people who live near nuclear plants; you'll find most of them have gotten past the fear-mongering and are quite happy with the arrangement.
Bill 1:56PM (7/14/2008)
Windmills are great - especially in the interior of the U.S., from Texas up through the Dakotas.
But there still is no way to get that power to the coasts.
We have a series of *regional* grids here in the U.S., with too little transmission capacity to wheel significant amounts of power between them.
Down here your choice remains coal or nuclear for baseload power.
Steve 11:51PM (7/14/2008)
Nikax @ #3, before opining on the level of another's analysis and project your own fascination with backyard windfarms upon the rest of the populace, you may want to consider keeping up with current events. If you need a primer, try googling 'kennedy' + 'windmill' to see how pervasive the NIMBY sentiment is when it comes to development of /any/ power facility, including wind farms.
Gary Witzenburg 12:55AM (7/15/2008)
Did I say the U.S. government needs to pour taxpayer money into all these things? Of course not. That's not the "we" I'm talking about. The government needs to get out of the way and let entrepreneurs and companies large and small invest in these alternatives because they see them as business opportunities. The government will pick its favorites to subsidize, as always, for better or worse. But ultimately, the best will win, the rest will not. That's the way the free market should work. But we can't afford to toss any of them off the table before its pros and cons have been fully explored.
Earl 11:04AM (7/14/2008)
I find it curious the Wiz doesn't include 1 actual number in his pro-drilling rant. If he did, he'd have to include the following...
1. ANWR: The EIA estimates between 5.6 and 16 billion barrels of oil are recoverable, with a mean estimate of 10.4 billion barrels of oil. That's about 1.5 years of American consumption.
2. Offshore Coastal Moratorium Areas: The EIA estimates there to be 15.7 bbo recoverable, that's another 2 years worth.
3. Hurricane Katrina: Although the overwhelming majority of safety valves did in fact work during the hurricanes, the Minerals Management Service of the Interior Department reported that there were five spills, each between 1,000 and 2,000 barrels. Altogether, 125 small spills totaled 16,302 barrels, almost a quarter as big as the Santa Barbara spill.
All this oil will be sold on the world market, it will not be nationalized and sold only to US consumers at a discounted rate, so unless we can significantly add to World surplus (we can't), we will not significantly affect oil prices . Sorry Wiz, "Drill Drill Drill" is not the answer.
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Bill 1:51PM (7/14/2008)
You missed the energy security issue - imported oil has been cut off before.
We can add substantially to current domestic production by drilling offshore and in ANWR.
In anticipation of the next Arab-Israel war.
barry 11:47AM (7/14/2008)
I CAN ONLY ADD THAT BURNING FOSSIL FUEL MAKES CARBON DIOXCIDE ISN'T THAT THE BEST REASON TO LOOK PAST OIL AS THE SOLUTION??
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paul 12:10PM (7/14/2008)
"Sorry Wiz, "Drill Drill Drill" is not the answer."
But why can't it be part of the answer? As for EIA estimates, Brazil just found their Tupi field in the past year, tripling their reserves estimates. You can't drill what you don't explore for.
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PetroZero 12:38PM (7/14/2008)
Great article that outlines the options. Good work. One clarification though...
Anything I've forgotten probably should be pursued as well, not through mandates or taxpayer subsidies but in competition with everything else on the free market. Gasoline has been by far the most affordable energy carrier for most of our lifetimes, but the higher oil and gas prices climb, the more competitive alternatives become.
You should mention that gasoline is subsidized heavily in the US, much more than any alternative at present. When you factor in these subsidies (cost of US defense of oil, free flowing oil lanes, etc) the cost per gallon is around $10-$12
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Richard 12:43PM (7/14/2008)
Well, if we all go to electric we wouldn't need to drill. Older cars will decrease in numbers over the years, and oil wouldn't be so necessary. Just my opinion. Oh, please don't drill in my backyard, I swim in the Gulf, and I don't think Mr Witzenburg cares about that! He probably lives somewhere else! I don't think windmills look bad at all, and they can always be taken down. I don't know how long it takes to clean up nuclear waste. I'd gladly put solar panels on my roof, if I could afford them, but then again, if the government can spend so much money in Iraq, then they surely could help a brother out!
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MikeInNC 1:08PM (7/14/2008)
This is part of the answer. We can get our own energy while using the massive amount of wealth it will create to fund new technology to get off of oil in the future.
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ct 1:35PM (7/14/2008)
I wouldn't mind a nuclear reactor in town. Now, ask me if I want the waste? One thing that no one is bringing up is the fact that we already have tons of nuclear wast to dispose of from the Cold War. For example, "What's to be done with 52,000 tons of dangerously radioactive spent fuel from commercial and defense nuclear reactors? (National Geographic, July 2002)" This stuff is scary. As a father I just can't see advocating for nuclear when the waste is so deadly.
I wonder how many wind mills and solar farms we could have built with the 800 billion plus dollars that were spent in Iraq?How many good paying jobs would have been created?
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PeterB 1:51PM (7/14/2008)
Not one mention of geothermal? 100GW of steady state energy waiting to be exploited using current oil and gas drilling technology...
who needs oil anyways?
check out an interactive map at:
http://environmentaldefenseblogs.org/climateatlas/
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Joseph 3:20PM (7/14/2008)
So basically, everything is a good idea.
Each idea has its merits, but you have to narrow done your options because some huge, broad plan isn't usually too effective.
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Mike!!ekiM 4:47PM (7/14/2008)
- Kicking Republicans out of Government has got to be the First Step.
- Bush's "Tax Cuts" ( only for the Super Rich ), plus Cheney's Oil War, are close to Bankrupting us:
http://www.bloomberg.com/apps/news?pid=20601103
- An unbalanced budget is now going to be the WEAPON the Arabs will use to DESTROY us.
There's a basic problem with the OLD generation, the world isn't Monopoly or Poker. If the WINER "takes all" then Everybody Loses, even the Winer. Destroying America so you can make your Short Term Buck will turn this country into a third rate country.
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Steve 11:51PM (7/14/2008)
Tony @ #1 outlines the two camps of thought rather concisely. I'm not a believer or imminent Peak Oil, but I do fall firmly into the second camp.
One of the reasons we remain so dependent upon oil for our transportation needs is the universal nature of its availability and application. Creating and expanding distribution networks for hydrogen, ethanol, LPG, petrol, liquid coal, and electric recharging outlets could be prohibitively costly in its redundancy... All of these technologies would be competing with each other for consumer adoption and, as a result, it's quite possible the promotions would cannibalize each other and none of them would be profitable enough to expand to a degree that unseats our dependency on oil. It's my opinion, that we should focus on two (or at most three) technologies. One for short distances (eg. electricity for commuting), and another for longer distances (eg. petroleum products for interstate travel and aviation).
Hydro may not be as appealing to (nature) conservationists as one may initially believe. Aside from the already mentioned interruption of migrating fish, also consider what will be flooded with the creation of the reservoir (eg Glen Canyon). Each source of power will have unique advantages and drawbacks.
Each of these proposed technologies might be better served by weighing the pros and cons of each, in light of the automotive industry and the needs of automotive consumers... as opposed as trying to lump them all together in one thread.
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Wally 8:01AM (7/15/2008)
We're a nation of whiners. Quit complaining about the non-issues. McBush will take care of it for ya.
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