by Eric Epstein
In 1970 we imported 24% of the oil we consumed. The amount doubled by the time of Jimmy Carter’s epic energy speech on April 18, 1977.
With the exception of preventing war this [energy crisis] is the greatest challenge our country will face during our lifetimes. The energy crisis has not yet overwhelmed us but it will if we do not act quickly. It’s a problem we will not solve in the next few years, and it’s likely to get progressively worse through the rest of this century. Many of the proposals will be unpopular. Some will cause you to put up with inconveniences and make sacrifices.
Today we import 70% of the oil we use, and Americans continue to consume a disproportionate amount of the world’s reserves. But the percentage of foreign imports is misleading, and not necessarily bad news when you diagnose where we get our oil.
For example, OPEC’s share of American oil imports has been sliced down to 56%, and 42% percent of the weakened cartel’s contribution comes from our allies in Iraq and Saudi Arabia. Both nations contain a significant American military presence and vast reserves.
The new real politick is that we have a diversified and proximate addiction inventory. Three of our five main suppliers – or 50% of the oil we import – are located in our front and back yard. Canada, Columbia, Ecuador, Mexico, Venezuela, and the Virgin Islands have displaced Middle Eastern sources.
The geopolitical reality is that large stocks of regional resources are currently being tapped. Contrary to public opinion and political hysteria, drilling off the coast of New Jersey, Delaware, Florida and Alaska is not a panacea. There are important, but limited oil reserves in American waters, and there are risks to our multibillion dollar fishing and tourism industries.
However, before we drill, we need to know what we have and where it’s located. The nation’s off shore drilling data is from the Cold War. Job one is to conduct a thorough due diligence of our assets. To Ken Salazar’s credit, part of Obama’s drilling plan is to conduct an inventory of our resources.
Bobby Ryan, Chevron’s VP of global exploration, stated on March 31, 2010: “We don’t have a good understanding of the what the true potential is. Until you really get in there with modern technology and evaluate it, you don’t really know.”
The Interior Department’s current estimate of economically recoverable reserves (assuming we don’t give the leases away) in the areas covered under Obama’s plan is 63 billion barrels of oil. What does that mean? Not even a nine year supply for a nation that consumes 7 billion barrels annually.
I’m not theologically opposed to offshore drilling, but I am wary of making policy decisions that yield minimal dividends down the road, especially when there are other options.
American consumption appears to be stabilizing due in large part to consumer awareness, improved automobile standards, and increased ethanol use. American refineries are operating well below capacity at a time when “margins have bottomed out and there’s need to be a correction. Demand is gone and not expected to return,” according to Nathan Schaffer an industry analyst with PFC Energy. (Wall Street Journal, April 9, 2010)
Just like off shore wind, there is a role for targeted drilling after we complete the requisite due diligence. The best way to protect future generations is to adjust and decrease our oil consumption patterns.
In the meantime, wake up America and smell the octane north and south of the border. Part of the answer to our oil addiction is continue to import oil from the same nations that provide us with hockey pucks, coffee, and baseball players.
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