Energy Independence and Why We Still Need Oil
I'm a big fan of energy independence. I'd like to see most countries in the world gain access to cheap, clean efficient energy systems. They are theoretically possible and there are companies everywhere, most notably the energy and oil companies of our day, looking to develop and capitalize on this new technology. Here's the reality. These technologies aren't ready for the market. They won't be ready this week, after breakfast, or possibly even in ten years. I have an optimistic hope they will be available, but in the meantime, all we can do is support such companies and pray they get lucky.
In the meantime, we still need petroleum and natural gas. Love it or hate it, we need it. Our economy lives or dies by it. So I see no inherent contradiction in trying to tap every last reserve we have of both and use them until they run out. In the meantime, I expect any company capable to bust its rear to develop alternate energy, but this is what we have. I see less development of existing deposits than money spent on alternate energy. Most issues are regulatory. Natural gas and oil exploration and exploitation are practically forbidden on the remaining identified, and massive, fossil fuel deposits. Likewise, refinery construction is unheard of in the US these days. This leaves us with a much more finite supply than we would otherwise have. Law of supply and demand says that because of this, prices will go up whether demand levels off, increases, or even diminishes.
We have mulitple sources of competition for fossil fuels these days. The developing nations of China and India are requiring more and more fossil fuels than they ever have, and the US in an attempt to keep ahead or at least parity is requiring an equally gargantuan supply. More need means higher cost, period.
Let me give a real-world example. Fifteen years ago, natural gas was cheap, because it wasn't in widespread use for home heating like it is today. It was certainly available, but electric heat had overtaken it in new home construction and passed it by. The natural gas industry, in an effort to raise their waning industry, started a campaign to create more customers and it worked like gangbusters. It got them, in spades. Now, the market is glutted with buyers, but the natural gas companies cannot tap anymore reserves. Those are generally forbidden by Congress, like the Florida shelf. So, supply has diminished, while demand has increased. So what cost less than half a dollar per cubic foot over a decade ago, costs over a dollar now per cubic foot. Doesn't sound like much until you realize how much cubic feet of natural gas it takes to heat just one home through the coldest winter months. $200 bills become $400. $400 become $800. You get the idea. Could your wallet take that kind of a hit? Mine can't.
With this in mind, are you willing to let natural gas and oil continue to face minimal exploration out of current stocks, and push further and further back any chance they may be developed and exploitable within the next 10 years? Are you willing to let our foreign oil dependence continue to increase past 60% to 80% or more? Considering the nations who could logically be considered hostile to the US include a good number of OPEC nations, and not just in the Middle East (Venezuela comes to mind), is that a smart or dumb decision to allow foreign dependency to increase? I'm thinking it's pretty damn dumb.
We have the resources. They won't last forever, but they will buy us a little more time; twenty years, thirty years maybe, but time nonetheless. At the end of that time, we can pray we finally have those usable alternative energies, and the possibility of that seems a lot better now than it did in the 70's and 80's, but at least we bought ourselves the extra time and possibly spared a war or two overseas. How's this a bad thing?
I'm a big fan of energy independence. I'd like to see most countries in the world gain access to cheap, clean efficient energy systems. They are theoretically possible and there are companies everywhere, most notably the energy and oil companies of our day, looking to develop and capitalize on this new technology. Here's the reality. These technologies aren't ready for the market. They won't be ready this week, after breakfast, or possibly even in ten years. I have an optimistic hope they will be available, but in the meantime, all we can do is support such companies and pray they get lucky.
In the meantime, we still need petroleum and natural gas. Love it or hate it, we need it. Our economy lives or dies by it. So I see no inherent contradiction in trying to tap every last reserve we have of both and use them until they run out. In the meantime, I expect any company capable to bust its rear to develop alternate energy, but this is what we have. I see less development of existing deposits than money spent on alternate energy. Most issues are regulatory. Natural gas and oil exploration and exploitation are practically forbidden on the remaining identified, and massive, fossil fuel deposits. Likewise, refinery construction is unheard of in the US these days. This leaves us with a much more finite supply than we would otherwise have. Law of supply and demand says that because of this, prices will go up whether demand levels off, increases, or even diminishes.
We have mulitple sources of competition for fossil fuels these days. The developing nations of China and India are requiring more and more fossil fuels than they ever have, and the US in an attempt to keep ahead or at least parity is requiring an equally gargantuan supply. More need means higher cost, period.
Let me give a real-world example. Fifteen years ago, natural gas was cheap, because it wasn't in widespread use for home heating like it is today. It was certainly available, but electric heat had overtaken it in new home construction and passed it by. The natural gas industry, in an effort to raise their waning industry, started a campaign to create more customers and it worked like gangbusters. It got them, in spades. Now, the market is glutted with buyers, but the natural gas companies cannot tap anymore reserves. Those are generally forbidden by Congress, like the Florida shelf. So, supply has diminished, while demand has increased. So what cost less than half a dollar per cubic foot over a decade ago, costs over a dollar now per cubic foot. Doesn't sound like much until you realize how much cubic feet of natural gas it takes to heat just one home through the coldest winter months. $200 bills become $400. $400 become $800. You get the idea. Could your wallet take that kind of a hit? Mine can't.
With this in mind, are you willing to let natural gas and oil continue to face minimal exploration out of current stocks, and push further and further back any chance they may be developed and exploitable within the next 10 years? Are you willing to let our foreign oil dependence continue to increase past 60% to 80% or more? Considering the nations who could logically be considered hostile to the US include a good number of OPEC nations, and not just in the Middle East (Venezuela comes to mind), is that a smart or dumb decision to allow foreign dependency to increase? I'm thinking it's pretty damn dumb.
We have the resources. They won't last forever, but they will buy us a little more time; twenty years, thirty years maybe, but time nonetheless. At the end of that time, we can pray we finally have those usable alternative energies, and the possibility of that seems a lot better now than it did in the 70's and 80's, but at least we bought ourselves the extra time and possibly spared a war or two overseas. How's this a bad thing?
posted by Rob Beck | 6:05 PM
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