Suppy and Demand

The Houston Chronicle just ran this op-ed piece titled Don’t Drain Our Energy Lifeblood, with the subtitle: “Domestic exploration is energy security 101.” It says that Americans burn nearly a half billion gallons of gasoline every day, and that 65 percent of the oil that makes this gasoline is imported. Also, that worldwide energy consumption is anticipated to increase by 40 percent in the next 25 years—while the widespread use of alternate energy is still decades away.

The article argues for drilling in the Arctic National Wildlife Reserve, as well as in the offshore continental shelf. The revenue generated, it says, could be used for alternative energy development.

The Arctic National Wildlife Refuge may offer oil reserves of as much as 16 billion barrels — which is comparable to the world’s largest oil fields. Even though the environmental impact would be minuscule, Congress insists on keeping the refuge and other potential domestic resources off-limits and ignores the fact that modern exploration techniques could limit drilling in the refuge to a 2,000-acre footprint, or not even half of 1 percent of the refuge’s 19 million acres.

It concludes that our country’s energy dependency makes us dangerously vulnerable in economic terms and compromises our national security.

Public policies that support, rather than impede, efforts to increase responsible domestic production are what America needs to retake control of its energy lifeblood from rogue dictators and banana republics.

The article’s author is Elizabeth Ames Jones, immediate past chairman of the Texas Railroad Commission, which regulates the state’s oil and gas, propane, mining and intrastate pipeline industries.

It got my attention, appearing as it did the Sunday immediately before the Association for the Study of Peak Oil (ASPO) conference will be held in Houston — and just before oil prices reached more than $86/barrel, a record high. It strikes me that as world demand for oil rises in the years ahead, there may well be a gap between the energy our country can get from oil and the energy we can get from alternate sources.

The Queensland, Australia government also just published a report acknowledging that “Peak Oil” — “the potential peaking of world oil supplies caused by natural field decline” — is a real concern and will happen within 10 years. Together with the op-ed piece above coming out of the gas and oil capital of the U.S., as well as the upcoming ASPO conference, I think these are all significant indicators.