Lead On Energy Now Or Follow Later

Apparently the "Drill Now! Wait Eight Years! Yell Again To Drill Now" crowd of Republicans has cowed the Democratic leadership into halting all efforts at moving on energy bills for the rest of the year. They took sensible lines of attack, like demanding that oil companies actually drill on the fields they have already leased instead of holding them in reserve to add to their stock price, and let them go.

Just before leaving for their districts, a number of House Democrats called a press conference to declare victory on a number of energy bills — including overwhelming passage of a bill to rein in excessive oil market speculation.
Democrats declared victory on a bill they failed to pass on the suspension calendar — their “use it or lose it bill” to force energy companies to either start drilling on their federally leased land or give it back — saying they had put 176 Republicans on record as siding with the oil companies over consumers.

And they vowed that the bill, the centerpiece of their energy message, would be back.

“We’ve taken some bold steps this week, and we’re going to build on that [after recess] with the bills we take up,” Democratic Caucus Vice Chairman John Larson (Conn.) said at the press conference.

But, as of Monday afternoon, neither “use it or lose it” nor any other energy measure had been scheduled for floor action this week.

Democrats said they were simply taking a different approach to passing their top energy-related priorities.

The approach should be to fight back. For example, the fact that in the last two days major oil developers have admitted that there's nothing left to drill and high prices are a new reality might be a place to start. For example:

Chip Johnson, the president and chief executive of Carrizo Oil and Gas, a Houston-based company, said he was “confused” by “such wild swings.” But he added: “I can’t see oil getting cheap again ever. It’s just too hard to find, and too many people want to use it.”

Example two, from T. Boone Pickens, fercryinoutloud:

Can’t we just produce more oil?

World oil production peaked in 2005. Despite growing demand and an unprecedented increase in prices, oil production has fallen over the last three years. Oil is getting more expensive to produce, harder to find and there just isn’t enough of it to keep up with demand.

The simple truth is that cheap and easy oil is gone.

So the Democrats can cede the point to the "Drill Now" crowd, and implicitly agree that more production is the answer, or they can offer a cleaner, safer, renewable alternative that will actually be cheaper over time and help save the planet from ruin as an added benefit.



One thing we can do is open up the ethanol market to all countries, and end our subsidy program for the corn industry. By the way, if anyone thinks the primary process isn't detrimental to the nation and its priorities, consider the harm done to the global food market by pleasing Iowan farmers. Illinois also has a lot of corn production, which is why Sen. Obama has been historically in favor of it. As he transitions into a national politician, he needs to allow the global ethanol market to prosper instead of the parochial one, and focus far more strongly on renewable sources rather than alternative fuels which expend just as much (if not more) energy to produce. He's starting to do that, but he needs to also educate his party. Obama's energy ad stated up-front that "McCain and Bush support a drilling plan that won't produce a drop of oil for seven years." So both the leadership and the candidate need to show improvement here. They both need to talk to Mark Begich.

You Know The Drill

So John McCain and George Bush think they've found the mother lode, and have decided that they're going to carry the policy of lifting the moratorium on offshore drilling on America's coasts all the way to another four years in the White House. They've got the whole conservative movement on their side with this coordinated effort, too. Newt Gingrich is babbling about a cyber-petition (his words, I stopped using "cyber" shortly after I read my last William Gibson novel in 6th grade) with 750,000 signers, some of them possibly real, calling on America to "Drill Here, Drill Now, Pay Less." The wingnut minions are inundating members of Congress with phone calls (that means a couple hundred). And I wish I could have seen the look on poor Charlie Crist's face when he had to grudgingly go along with this charade, as the Governor of Florida, and put his political career at risk:

Crist, last week:

Q: Gov. are you dropping your opposition to drilling for oil off of Florida’s coast?
CRIST: I am not. … No. 1, I don’t like it.

Crist today:

“What we ought to be willing to do is study it,” he said. “Reaching a conclusion about what is right or not right at this juncture is hard to do.” [...]

Florida politicians of both parties “have worked to keep the drilling ban in force along Florida shores for more than 25 years,” the Miami Herald observed today. Many fear “it would harm the state’s beaches that are so vital to its tourism.” Former Governor Jeb Bush (R) has also pushed hard for the ban on drilling.

MSNBC noted today, “No Republicans in Florida have gotten elected statewide without endorsing the moratorium on off-shore oil drilling…if Crist tries to rationalize the McCain decision then we’ll really find out just how much he wants on the ticket.”

GOP Sellout Alert! (and like McCain needs more help losing Florida, right?)

Now, I think the best way to understand what the right is actually proposing here is best typified by this chart:



With the Arctic National Wildlife Refuge, you're talking about dropping the price of a barrel of oil between $0.50 and $2 over a 30-year time horizon when the price has gone up $100 since the beginning of the Bush Presidency. It's the same for drilling offshore. As Bill Scher put it,

UPDATE: Just to put a fine point on it, lowering the price of crude oil per barrel by $1 is roughly equal to a reduction in price at the pump of 2.5 cents per gallon. So lifting all of the above moratoriums, lowering the price of crude by $2.25 per barrel, would lower the price at the pump by less than 6 cents by 2025.

Meaningless, after prices have skyrocketed more than $3 a gallon between Dec. 2001 and today.

Even John McCain's top campaign adviser has admitted that drilling would have no immediate effect on higher gas prices.

But even if it did, it would be a catastrophic mistake. Debbie Cook, who is the Mayor of Huntington Beach, sits on the board of the Association for the Study of Peak Oil (APSO), and who is running for Congress this year against our favorite Taliban lover Dana Rohrabacher, characterizes this quest for drilling as merely an effort to "divert our attention away from the real problem" of flattening world oil production, peak production being reached in 50 countries, and a dissipation of fossil fuel resources worldwide. From her statement:

George Bush and Dana Rohrabacher’s failure to understand the fundamental economics and geology of oil and gas production is matched only by their failures as leaders.

The true solution to our energy problems starts with conservation efforts, and investment in alternative and sustainable energy sources, which will create new American industries and jobs and jumpstart the sluggish economy.

But you have to look a little but further to get to the truth here. If two oilmen in the White House and a majority in the Congress, as Bush and Cheney had for 6 years, wasn't enough to get the job done of drilling in ANWR, do you really think they and their oil company buddies want to? The truth is hinted at in Harry Reid's response.

The facts are clear: Oil companies have already had ample opportunity to increase supply, but they have sat on their hands. They aren’t even using more than half of the public lands they already have leased for drilling. And despite the huge tax breaks President Bush and Republican Congresses have given oil and gas companies to invest in refineries, domestic production has actually dropped.

Private corporations have potentially billions of barrels of oil sitting in capped wells and untapped leased fields, some of which have been lying fallow for as much as thirty years. They won't open them because they are more profitable as untapped reserves, which inflates the stock price and goes directly into the execs' wallets. Bush and McCain say they want more drilling, but the oil companies don't. They want more untapped reserves so they can pump up their balance sheets.

This is all a game. Bush and McCain want to funnel oil services contracts to corporate boardrooms, not oil to consumers. They either have some polling about how fear of higher gas prices will allow them to gain some populist support for these measures, or they're just following the Republican playbook since the energy crisis of the late 1970s. Whatever it is, they certainly aren't interested in delivering more oil.

UPDATE: Environmentalist at Kos reaches the same conclusion.

Between 1999 and 2007, the number of drilling permits issued for development of public lands increased by more than 361%. And did you see your gasoline costs drop? How about your electricity costs? Propane? natural gas? Uh...no. There is absolutely no correlation between the industrialization of public lands and the price of fossil fuels [...]

What's going on here is yet another cynical attempt by the GOP and the oil and gas robber barons to increase and assure huge industry profits at the expense of the American people. These companies don’t want to drill these areas. They want to hold them as assests to limit the amount of oil and gas on the market so that prices rise still further - and they make more money. They want to hold on to these areas so that they can drill them ten or fifteen years from now and make an even bigger fortune.

Whining and Crying Instead of Innovating

Oil prices shot up today on fears of shortages, leading the US Congress to pass the latest in a series of stupid laws regarding our energy future:

The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.

The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.

The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.

It's a nice election-year "are you with us or are you with the oil companies" vote, but it's the complete opposite track of how we should look at the situation.

A substantial amount of the oil in the world has already been pumped out of the ground. What's left is going to be harder and costlier to reach. It's called peak oil, and nobody wants to talk about it, but in all likelihood we're already there. OPEC would be pretty happy getting $130 a barrel for oil if they had excess capacity to pump. I'm not at all sure they do.

But whether they do or not, trying to lower the price of gas on the margins is insufficient to the problem. Iran says a lot of stuff that's not entirely true, but this is an example of what the next steps could be if we invested in innovation.

Researchers at Isfahan University of Technology have invented a car which consumes only a liter of gas to drive up to 500 kilometers.

“The single-person car is capable of driving at a maximum speed of 75 kilometers per hour,” Alireza Fadaei, supervisor of the manufacturer group announced.

“The car has a 3.5 horsepower carburetor and is equipped with an injection engine,” he added.

“Composite materials with fiber-carbon, which form the body of the car, give it low weight and high strength,” the supervisor of the group claims.

The Iranian car, which is scheduled to be exhibited in France's Low Consuming Exhibit in Nogaro, aims to replace motorcycles.

It could replace cars, too. And we could encourage smarter growth and more mass transit and higher efficiency instead of spending time and effort finding out if OPEC is undercutting you on the price. Guess what - they are. They probably always have been. But that tiny amount of extra cash isn't going to do anything to solve long-term energy needs or fight global warming. The Congress is fighting the last war and trying to save their political skins from angry drivers. But this is useless policy.