Another Energy Rebuttal

It appears that we may be starting to agree more than disagree. Following is a response to rebuttal #2.

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You say: “What we need to do is all of the above.”

I say: Here, here! But the emphasis and incentives need to be on clean sources.

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You say: “When you go after oil companies heres the point. They want to drill. If there was any oil there they would drill for it.”

I say: Oil companies want to make money (as any business does), and that doesn’t always mean drilling. I’ve already demonstrated that it’s enough for an oil company to simply say the oil is there in order to boost their stock price. Furthermore, geological variations result in oil reserves that are more or less expensive to extract, depending on where they are located. So it is rational, to some extent, that an oil company might want to acquire/hold leases on land that is too expensive to drill today on the expectation that oil prices will rise and thereby make it profitable tomorrow -- that's just another form of speculation.

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You say: "You state that drilling would be enormously profitable for oil companies. So if your logic is true how does it make sense that they have land to drill on but are not drilling? The oil companies are also inveting billions in the land they lease, so it doesn't make any sense that they investing just to sit on lands."

I say: Good point. The assertion that they would be enormously profitable is based on the assumption that oil prices remain at ridiculous levels. So far oil prices haven’t sustained those prices long enough to make it profitable (I assume).

I’ll conceded that reserves in the existing leased areas probably aren’t economical at current prices, otherwise they probably would be drilled

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You say: "Second, offshore drilling will not take 20 years. The energy department says about five years, but if the governement got out of the way I have no doubt the amount of time would be shortened."

I say: where’s your reference?

The EIA says: "The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017."

http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html

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You say: "With the current demand using just the oil from the Rocky Mountain Shale we would have enough oil for about 124 and a half years. Surely in that time we could find an alternative."

I say: It sounds promising … as a backup … once they figure out how to extract it. Oil companies are permitted to develop the extraction process, and they come and go as oil prices rise and fall. It will be years before they perfect a process that doesn’t spew CO2 or leak hazardous bi-products into the water supply. At the end of the day, it’s a carbon-based energy supply when we should be focusing on non-carbon supplies.

RAND says: “Under high growth assumptions, an oil shale production level of 1 million barrels per day is probably more than 20 years in the future, and 3 million barrels per day is probably more than 30 years into the future.” This means that any investments based on oil shale’s future are significantly speculative and long-term.”

http://www.nuwireinvestor.com/articles/rocky-mountain-oil-51062.aspx

http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm

http://www.rand.org/news/press.05/08.31.html

http://books.google.com/books?id=XlrAAtCD4hoC&printsec=frontcover&source=gbs_summary_r&cad=0

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You say: “Today we get 94% of our domestic energy from coal, natural gas, and nuclear power, while the other 6% comes from alternatives like wind and solar. So how does Obama think that taxing coal and natural gas and not using nuclear power will lower prices?”

FactCheck.org says: “McCain's new ad claims that Obama ‘says he'll raise taxes on electricity.’ That's false. Obama says no such thing … As we read Obama's response, he is rejecting a tax on wind energy, saying that taxing ‘dirty energy’ is a better option, and then he is rejecting both notions by saying ‘the real way’ is for local communities to ‘step up’ and pay for education with ‘no shortcuts.’ Obama's phrasing does leave room for interpretation, but to our ears this is a feeble peg on which to hang a claim that Obama wants to ‘raise taxes on electricity.’”

http://www.factcheck.org/elections-2008/obamas_celebrity_cred.html


BarackObama.com says: “Safe and Secure Nuclear Energy: Nuclear power represents more than 70 percent of our noncarbon generated electricity. It is unlikely that we can meet our aggressive climate goals if we eliminate nuclear power from the table. However, there is no future for expanded nuclear without first addressing four key issues: public right-to-know, security of nuclear fuel and waste, waste storage, and proliferation. Barack Obama introduced legislation in the U.S. Senate to establish guidelines for tracking, controlling and accounting for spent fuel at nuclear power plants.”

http://www.barackobama.com/issues/pdf/EnergyFactSheet.pdf

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You say: “Finally, it is your arguement that ‘misses the point.’ ... Although the goal of lowering prices may not be solved, one will. That is that we are taking money out of the hands of countries like Russia, Iran, Syria etc by not importing or importing less of their oil.”

I say: In your original post, you led off with price and closed with national security. As you point out, I have been focusing on price and haven’t addressed national security. Actually I would argue that a national energy policy needs to balance three components: price, national security, and the environment (not necessarily in that order).

With respect to environment, I accept evidence that human activity is causing climate change and claims that we need to severely cut greenhouse gas emissions to avoid the potential for catastrophic environmental events, such as drought, sharp increases in the frequency and magnitude of severe weather, collapse in food production rates, human displacement caused by rising sea levels, and possibly worse. Even if some of those outcomes are uncertain, the potential mandates prudence. And that means an asserted effort toward a carbonless energy supply.

Based on the reports from EAI and RAND, it appears to me that carbon-based energy strategies are weak on the basis of price in the 10 – 20 year range, weak on national security in the 10 – 20 year range, and weak on the environment in the 20+ year range – with the possible exception of natural gas, which is relatively clean burning.