The Real American Energy Opportunities

Gasoline prices are rising at the gas pumps and look as though they will continue to do so for some time.  There are many predictions that the price of regular gas will rise above $4.00 a gallon.  The present recession occurred when it did because a sudden oil price surge was the pin that popped the housing credit balloon.  Ten of the eleven U.S. recessions since the end of WWII were precipitated by a sudden rise in oil prices.  In addition to the instability of the Middle East and the fact that Obama by design has no foreign policy to deal with it, Obama is determined to force fossil fuel prices upward drastically.  Such an action must have an effect similar to an international upsurge in the price of oil.  Our fragile economy may not be able to survive his efforts to rapidly reduce the use of coal, to virtually end exploration and drilling for oil and gas in America and its waters, to penalize CO2 emissions, and to misdirect the economy into expensive and unreliable wind and solar generated electric power.  It will certainly not prosper and generate the millions of jobs we desperately need it to, especially in view of our huge national debt and the unfunded looming liabilities for Social Security and Medicare for the retiring and politically blind Baby Boomer generation.

American energy policy is absolutely critical and should be founded upon the following facts:

• Catastrophic anthropogenic global warming is a scientifically failed hypothesis.
• Carbon dioxide is not a pollutant, but is plant food which will only promote plant growth should its concentration in the atmosphere continue to increase due to the warming of the oceans since the end of the Little Ice Age.
• It is not practical and economic for the U.S. to pursue energy independence.  We presently import over 60% of the crude oil we refine.  This imported crude and other petroleum products cost $453 billion in 2008.  Decades of Presidential declarations of our pursuing energy independence have failed to make progress toward the goal.
• The best way to assure the availability of adequate oil and gas supplies is to have as many sources of them in as many areas of the world as possible.  The resulting competition for income will do more to relieve price and availability concerns than any other approach to the problem.
• Presently, 77% of wold oil reserves are owned or controlled by national governments, some of which are unfriendly and many of which are subject to instabilities.  Nationalized oil companies are also inclined to be inefficient, often under-capitalized, and to lack innovation.
• The U.S. has 22.6% of the known world reserves of coal, which leads the world.  Russia has 14.4% and China has 12.6%.  In 2010, despite increases in natural gas use for electric power generation in the U.S., coal still produced 45% of American electric power.  Coal power stations require scrubbers and generate fly ash, but their problems are exaggerated by many environmentalists and Progressive Elitists.
• Ethanol additions to gasoline only provide corn-growing farmers and ethanol refiners with welfare payments and drives food prices upwards.  Ethanol provides neither net energy nor pollution benefits, despite claims years ago that it did both.
• Wind generation and solar power plants are very expensive and exist on the power grid only due to government mandates and subsidies.  These power sources have little utility except in remote locations far from the electric grid or for temporary setups to avoid power hookups.  They are also unreliable and use the land inefficiently.  When on the grid, they require expensive gas-fired power plant back-up.
• The U.S. has huge oil and natural gas reserves compared to those acknowledged by the U.S. government.  The government estimated that Alaska's Prudhoe Bay held 9 billion barrels of oil, but it has already produced 15 billion barrels and is still producing.  The Bakken Formation of North Dakota and Montana is now thought to have up to 4.3 billion barrels of oil, but the government had previously thought it had 25 times less than this amount.  Much of America is effectively unexplored for oil and gas and there are many, many areas worthy of exploration and development.  This situation exists because the government has not allowed exploration in many areas.

Let us discuss a few of the exciting oil and gas opportunities that the U.S. has, if only the Obama gang were not so determined to stifle them.

Northern Economics and the University of Alaska - Anchorage's Institute of Social and Economic Research has just recently released a study concluding that Alaska's Outer Continental Shelf could make Alaska the 8th largest oil-producing region in the world.  This would place it ahead of Nigeria, Libya, Russia, and Norway.  Alaska could produce 10 billion barrels of oil and 15 trillion cubic feet of natural gas.  About 55,000 new jobs would be created and add payroll of about $145 billion nationally.  Because oil royalties are very high, government revenues through the year 2057 would be increased by $193 billion.  The operating life of the 800-mile Trans-Alaska Pipeline System would be extended by such production.

The development of the many oil shale deposits in the United States holds huge promise and were recently discussed in the Investor's Business Daily article A Shale of Difference.  The known shale oil deposits are shown in the map below:

Late in his presidency, George Bush opened up 2 million acres of federal lands in the Green River Formation to possible development for shale oil and tar sands.  Interior Secretary Ken Salazar of Obama's cadre has refused to allow this to happen, claiming that the leases must be reviewed.  Of course environmental groups have also filed federal lawsuits to prevent its development.  The area is thought, by the U.S. Geological Survey, which commonly makes underestimates, to hold 1.5 trillion barrels of oil.  This is six times the proven reserves of Saudi Arabia and would supply the U.S. with enough oil for 2 centuries of use!  But, despite the recession and the soaring costs of oil, the Obama cadre sees only reasons to prevent the development of this oil source.  After all, it would only make it too easy for Americans to pollute the atmosphere with CO2!  The consequences of such wrongheadedness mean that we will not be producing 2 million barrels of oil a day from oil shale fields as we could have been doing by 2015.  That production would have exceeded the production of the Gulf of Mexico prior to the Deepwater Horizon event.  The now booming Bakken formation of North Dakota could have had some good company and America could have been much richer and had many more jobs.

An ICF International study claims that opening up the federal waters off the Pacific Coast, the Eastern Gulf of Mexico Coast, and the Atlantic Coast for development of oil fields would increase domestic oil production by nearly 1 million barrels a day and 3 billion cubic feet of gas a day.  Allowing efficient and innovative American oil and gas companies to tap these resources as the economics allows would provide a strong steadying hand to the problem of oil and gas availability and price stability for Americans.  The benefits for the American economy over the next several critical decades would be huge.

Yet faced with an exemplary environmental track record in recent years, a fragile economy due to many government interferences, a 13% real unemployment rate with many more Americans underemployed, a lack of good jobs for those without a college degree, an entire Middle East unstable and in revolt, and all of these opportunities for wealth creation, our Progressive Elitist overlords have decided we are best put on a severe energy diet.  Energy Deprivation is Good, say our all-knowing federal and many state masters.

We the People clearly need to mount an Energy Plenitude is Good campaign!  Drill, Baby, Drill!!!!

Petition to Allow Oil Drilling in U.S.

American Solutions is asking Americans to sign a petition to encourage the Department of the Interior to allow drilling for oil and gas in the U.S. on federal lands and offshore. They are threatening to hold up the decision process until 2012! If enough people respond that we should drill now, there may be a chance that this delay will not be politically feasible. From their website, with a slight modification of the first sentence:

Sending a letter to the Department of the Interior is the next stage of the "Drill Here, Drill Now" campaign. Here’s why:

• The Minerals Management Service (MMS), an agency within the Department of the Interior, chooses when and where we can drill for American energy through a public process called "Notice and Comment."
• MMS is currently deciding whether we can drill offshore during the years 2010-2015. If an offshore area is not made open to drilling, there will be no drilling there until at least 2015.
• What MMS ultimately decides is influenced by input from the public, and the deadline for submitting comments is September 21, 2009.

The petition reads:

I am writing in support of the development of more domestic oil and natural gas resources off our coasts by allowing all of the 31 lease sales proposed by MMS to be kept in the OCS leasing program for 2010–2015.

During the summer of 2008 when gas prices went over $4 gallon, the American people spoke loud and clear in favor of developing the energy supplies that have been off limits to us for too long. Just because gas prices have gone back down does not mean we’ve changed our minds.

It’s important that we begin to develop alternative sources of energy, but oil and natural gas will continue to be an essential part of our energy future for decades to come. We are currently sending billions of dollars overseas to meet our energy demands, even though we have more energy resources than any country in the world.

MMS should make access to all OCS areas a high priority for our nation to improve our energy security, grow our economy and generate local, state and federal revenue.

In terms of our energy security, for over 20 years the federal government denied access to an estimated 18 billion barrels of oil and 77 trillion cubic feet of natural gas in the OCS. The resources expected to be found in these areas represent enough natural gas to heat 15 million households using natural gas for more than 77 years. And, it can produce enough oil to power over 20 million cars and heat 956,000 households for 30 years. These resource estimates may be conservative since the areas in question are largely unexplored, but, if given access to them, the industry can utilize today’s sophisticated technology to further define and tap those domestic resources.

In terms of our economy, opening all available domestic resources to safe and environmentally responsible development will significantly boost U.S. supplies of oil and natural gas. One study in particular indicates that the development of these areas can add 160,000 thousand jobs in the oil and natural gas industry.

Lastly, in terms of revenue, the federal government collected over $23 billion from the energy industry in 2008 which was distributed to state, local, American Indian and federal accounts. Additionally, one recent study indicated development of the resources on federal offshore areas and onshore lands that had been off-limits for decades could generate $1.7 trillion in revenues for federal, state and local governments.

For the sake of our economy, our energy security, and our government’s balance sheets, the next OCS plan should keep all the 31 lease sales in the 12 areas proposed for exploration and production with no artificial restrictions.

As I have noted before, the best practical step to protect us from oil and gas price spikes is to have as many sources of these fuels as possible and as many substitutes as possible, including coal and nuclear and any other economical and reliable sources of energy. Generally, the Obama and socialist-preferred energy choices are not economical and reliable. It is almost as though they are purposely trying to tear our economy and our civilization apart by depriving us of economical and reliable energy. Well, no, that is not quite right, because it is absolutely clear that this is what they are trying to do. Many sources of economical and dependable fuels abroad are a help, but that help is diminished by the fact that most foreign countries operate their oil industries through nationalized companies. The most valuable oil and gas with respect to the maintenance of our economy is that which we obtain in the United States.

It is true that we cannot and that we should not use only oil and gas from the United States. But our own sources do tend to stabilize the issues of availability and price despite being much less fuel than we need. Please do take the time to go to the American Solutions petition and sign it.

Arctic Oil and the Northwest Passage

Recent climate conditions, especially increased winds, have resulted in the Northwest Passage being used more frequently by shipping. Canada is asserting control over that Passage which works its way through islands and along coasts which are part of Canada. The U.S. and most European nations refuse to recognize Canada's sovereignty over the Northwest Passage.

On the other hand, the U.S., Russia, Denmark (owner of Greenland), and Norway are eager to lay claim to offshore areas along with Canada, because it is estimated that about one-quarter of the earth's as-yet undiscovered oil is in these waters. It sure would seem likely that with the oil on the North Shore of Alaska, there would be some along the North Shore of Canada nearby.

Given the distance over which mineral rights are claimed offshore, it would seem that Canada has some claim to the control of the Northwest Passage. That would sure create some problems for our nuclear submarines, however.