Bravo to the New York Times for its clarity in articulating its preferred energy policy. In an editorial yesterday objecting strongly to changes in the royalty rates for extracting oil from shale--of which not a single barrel is currently being produced--the Times came down solidly on the side of conservation, concluding that the alternative was "a nation committed to devouring itself one barrel at a time." This is important, because this view is shared by millions of Americans. Unfortunately, it is entirely at odds with any rational view of energy security or energy independence, which at least one party sees as a viable political issue. Factoring in the impediments to meaningful oil conservation that I highlighted in Wednesday's posting, and even allowing a rapid scale-up of ethanol and biodiesel, we will still consume truly enormous quantities of oil in the next two decades. Where that oil will and ought to come from is a question that won't be answered by clever turns of phrase.
We might start by reminding ourselves where we seem to believe we shouldn't drill for oil. On top of the shale deposits of the West, there's the Arctic National Wildlife Refuge. We have also ruled out vast tracts of our coastlines, irrespective of the quantities of oil either known or suspected to lie under their waters. We're even trying to deny Cuba the right to drill on their own side of the Florida Straights. (Never mind that we have essentially written off most of our own Gulf Coast to being drilled like a pincushion.) Then, lest we turn to our neighbors up north for more oil, the Times has previously pointed out the significant environmental impact associated with oil sands extraction, which is similar at least in concept to oil shale.
Where does that leave us? At best--and believe me, this is a stretch--US oil production will continue on its current plateau of between 5 and 6 million barrels per day, depending on how many hurricanes the Gulf gets in a given year. Throw in natural gas liquids, and we're up to almost 8 million, or roughly 38% of the total of 21 million barrels per day of total petroleum products we consume. Reduce consumption by 10% and boost biofuels from their present 1.5% contribution to 10%--neither of which is a trivial proposition--and we still have a heck of a gap, with nowhere else to turn to fill it but the same folks who held a little supplier's conference in Doha yesterday.
If we are serious about energy security and an end goal that might approach energy independence, then we should be cautious about which domestic hydrocarbon options we take off the table on principle. While it's true that we can't drill our way to independence, as you will hear often from critics of shoring up our domestic production, neither can we get anywhere close to independence without a substantial amount of further drilling. And just whose resources should we "devour...a barrel at a time" to keep Americans' cars on the road?