There's a popularly held belief out there that if America were to just walk into the public policy confessional and ask forgiveness from our addiction to oil and simultaneously pledge allegiance to "the new way" -- when we walk out all would be right with the world. Nice myth, but reality just isn't that way.
The fact is the world's largest economy, the one that produces more jobs than any other, more wealth than any other, pays more taxes, provides more opportunity, and defends freedom and the world's vulnerable unlike any other -- yes, the economy of America needs oil, natural gas, and coal to keep it going. Not only in an immediate sense, but for the foreseeable future we will be heavily reliant on fossil fuels, or pay exorbitant prices for alternative sources, and/or take a huge step backward in society's development. That is reality, not the myth proffered by Al Gore and the Congressional leadership who has elected to fall in line with him for the sake of, well, their own election.
Make no mistake about it; the world needs to evolve to alternative energy sources with a sense of urgency. The arguments surrounding global warming, as well as theories about the contribution of fossil fuels to the phenomenon, rage with irrational, incredible advocates on both extremes. It only makes sense that we take a conservative approach and do all we can to mitigate any negative effects that we and our modern society may cause. Nonetheless, we are precisely where we are. Great advances in technology and the genius of human invention can allow us to utilize existing supplies and sources of energy while limiting environmental impact and transitioning to alternative fuels. People ought not be seen as the problem; they are the solution and hope for a better tomorrow.
Popular belief holds that the world is rapidly running out of fossil fuels and that if we don't all perish first from the floods created by melting ice caps, we will run out of supplies of oil to fire up our gas-guzzling SUVs. The truth is we may not be able to afford the gas at the pump, but supply shouldn't be the issue. At least not unless politicians continue to mess things up.
Less than a hundred years ago, the world supply of oil was thought to be 60 million barrels. That estimate was increased to 600 million barrels by 1950, and 2 trillion barrels by 1990. The 2000 estimated world supply increased another 50% to 3 trillion barrels. For the record, U.S. consumption was estimated at 2.7 billion barrels per year in 2004.
Part of the problem of quenching the world's thirst for oil is who controls it. Approximately 75% of the known supply is in Middle-Eastern countries, Venezuela or Russia. U.S. known reserves are small potatoes (2.2%) in the global picture.
The still undetermined potential of oil shale, however, bears promise to greatly expand domestic supplies. The estimated reserves embedded in oil shale in northwestern Colorado alone exceed a trillion barrels. Research underway is very encouraging and someday a financially and environmentally feasible way of harvesting the reserve will be found. The question will remain, "Will the politicians let us harvest it?"
The National Petroleum Council recently released a report that indicated 40 billion barrels of American known reserves are off limits or subject to leases restrictions. Similar restrictions apply to 250 trillion cubic feet of natural gas of which we consume about 22 trillion cubic feet per year.
An estimated 9 trillion cubic feet of natural gas is under the Roan Plateau east of Grand Junction in western Colorado. Admittedly a special part of Colorado's environment, an unprecedented seven-year effort was undertaken to eventually recommend a plan for harvesting the energy resources of the Roan while protecting wildlife and plant habitat, water quality, property and grazing rights, and visual impact, as well. It was widely heralded for the inclusive, bottom-up process that was used to create the plan, and for being perhaps the most restrictive plan of its kind ever adopted in the western states.
However, that wasn't good enough for some. Governor Bill Owens, Colorado Governor at the time the plan was adopted, did review, comment and accept the plan on behalf of the state. Colorado's new Governor Bill Ritter, however, requested 120 days to review the plan, and with heavy muscle intervention (placing a "hold" on the confirmation of a new BLM director) by Sen. Ken Salazar, the Governor's request has been granted by the Department of Interior. Seems like a 120 day review could have already been accomplished during the first seven months of the Ritter administration, but that may be too much to assume.
Meanwhile, on the House side of Capitol Hill, Colorado Congressmen John Salazar and Mark Udall successfully attached an amendment to the House energy bill that would completely ban all surface energy production from the fed-owned eastern portion of the Roan except by directional drilling from the sides of the plateau -- unsightly and offensive to area residents and fiscally impractical for producers. The Denver Post even editorialized that the "drilling ban is wrong" and went on to blast Udall and Salazar saying, "forcing the energy companies to drill up to three miles to reach the gas fields... could actually increase the risk of harm to the wildlife that use the base of the plateau for their winter range." Ritter is also going to battle with local officials in Moffat County trying to shut down energy production in the Vermillion Basin. During his campaign, he signed a letter with the Salazars and Udall to the feds supporting a ban on the Roan. One would think he would have reviewed something about the plan before taking that step. So, what conclusions do you suppose this 120 day review might contain?
The shut-it-down crowd that Udall, Salazar, and Ritter are attempting to appease is the same bunch that not long ago was promoting transition to natural gas because it was "clean energy" -- and it is. But, now they've changed their song again, and don't want us to harvest the natural gas where the gas reserves exist. They're the same crowd that embraced wind energy, but now don't like unsightly turbines on the horizon. What they are is "against" almost any solution no matter how much science, deliberation, and compromise went into crafting it.
Enough politics -- We need clarity
According to former Gov. Pete DuPont, now chairman of the National Center of Policy Analysis, the U.S. is "the only nation in the world that has forbidden access to significant sources of domestic energy supplies." And, we're the ones with the greatest demand by far, consuming roughly 25% of global supply.
The congressional antics of the Colorado delegation members are sadly too consistent with the majority now in Congress. While it is politically fashionable to preach the go-green gospel and trash those nasty energy companies, is it really in our best interests?
Throughout, the last century energy was cheap. Furthermore, it could be moved by truck, rail, or sea long distances without adding significantly to consumer prices. The public thought refineries were messy and unsightly, plus they smell, and lots of people think oil rigs are ugly, especially at night with all the lights, and drilling is a noisy nuisance. So, we started a trend that continues of shipping more and more oil from "over there" to refineries bunched up around coastal cities where most of the country wouldn't notice or be bothered by them. Oil field workers antics are legendary, too. "Momma's don't let your babies grow up to work in the oil fields" –or something like that.
So, energy production was deemed a bad thing for any self-respecting family, neighborhood or society – and America became increasingly content to get our energy elsewhere and let all the negative things that go with it happen in someone else's backyard. They also got the jobs and wealth created by energy production. We got to pay the bill.
In the last few decades, the ratio of domestic production-to-imports of oil has reversed to the point that today about two of every three barrels is foreign, and the gap widens. America hasn't built a new oil refinery in 30 years. While improvements have increased output, the number of refineries has decreased from 254 a quarter-century ago to 145 today (57%). Even if we did produce more oil domestically, we don't have refinery capacity to handle it. We learned of the inadequacies of our limited refinery capacity and the risk of geographic concentration during Hurricanes Katrina and Rita.
Meanwhile in typical backwards style, Congress, according to Gov. DuPont, "wants to block drilling for more American oil while at the same time blocking the importation of oil -- not a rational energy policy." How would they do this? In June the Senate voted to reduce future oil usage by 10 million barrels a day. That's about one-third of all we use. And, since domestic production continues to decline, the Senate effectively reduced the amount we can import. They don't want us to produce it, and they won't let us go get it, either. My mom would have called this "cutting off your nose to spite your face."
Ah, but we ought to get away from oil anyway, goes the fashionable thought de jour, because it's bad for the environment and it is controlled by al lot of people that don't like us. A lot of our people don't like them either, for that matter. It's also starting to cost too much. It wasn't nearly so offensive when it was cheap.
So, we need to find other sources.
Maybe we could use nuclear power - "America's largest pollution-free source of energy," according to Gov. DuPont, who claims 20% of our electricity already comes from nuclear plants. The French have mastered safe, clean nuclear power and scientists by the score endorse utilizing much more of it. Two big problems, however, limit further expansion of nuclear power in the U.S. First, Congress is about as likely to embrace nuclear energy as they are to embrace Osama bin Laden. The influence of the environmental lobby that consistently opposes nuclear energy (and most other traditional sources, too) on the Democratic majority is so overwhelming that the subject doesn't even come up. Secondly, George W. Bush supports nuclear energy and thinks we ought to build three new plants a year to help meet our energy demands. And, like virtually everything else these days, if Bush is for it, Harry Reid and Nancy Pelosi will certainly be against it.
America has massive quantities of coal, which is the world's biggest source of energy after oil. At current consumption levels, the U.S. has in excess of a 100 year supply of coal, and Colorado and the West is home to some of the highest quality, largest reserves. Despite technological advances that make coal a far more desirable source of energy, and the promise of liquefaction that is being embraced globally by progressive energy companies like Xcel Energy, coal still carries a 19th century stigma and isn't likely to win favor with the politicians any time soon. Tragedies like the disaster recently in Huntington, Utah don't help engender support for the coal industry, either. The Wall Street Journal reported recently that plans to build two dozen coal fired plants in the nation have been cancelled.
As obvious as it seems that for the foreseeable future, America will need to be reliant on oil, natural gas, coal, and nuclear power as "the indispensable energy resources to insure the prosperity of America's economy" as DuPont puts it, congressional leadership is pulling the opposite way.
Ethanol is all in vogue, and has received great support (subsidy) from Congress. I'm glad for my friends on the farm growing corn to produce ethanol, but it does cut both ways. As the price of corn has soared, the cost to feed cattle, hogs, and chickens has, too. Food prices have jumped as a result, so along with paying more at the pump, other costs of production and grocery bills have gone up, too.
For all the reasons to feel good about corn-based ethanol there's a bit more to the story. It really isn't a substitute for gasoline at all, because it takes "seven gallons of oil to produce eight gallons of ethanol" according to DuPont, including the "fuel for the tractors to plant and harvest the corn, pesticides to protect it, and fuel for the trucks to transport the ethanol around the country." Ethanol doesn't burn as efficiently as gasoline, either. So, it takes as much as a third more of it to produce the same "umph." The net effect, then, on global warming is negligible regardless of all the hype and public perception to the contrary.
Nonetheless, since there are a lot more people who enjoy looking at cornfields than oil rigs and coal dust, ethanol is in great favor among the politicians. Production is subsidized at 51 cents a gallon and domestic production is protected by a 2.5% tariff and an import duty of 54 cents a gallon. We haven't built an oil refinery in well over a generation, but more than 100 ethanol refineries are up and running with more on the way.
My fear is that a lot of farmers and farm communities are going to become dependent on – and deeply indebted to – this new, subsidized, artificial economy. Then, at some point the politicians will move on to the next politically acceptable fad, and pull the ethanol rug right out from under them.
Wouldn't it be nice if just once America had a truly balanced, scientifically-based energy policy? One that was built on fact and reality, rather than myth, fear, and electioneering? We haven't had one for at least the last one hundred years, and we have certainly managed to survive – even thrive. Will we be so fortunate in the 21st century?
