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Energy Policy: Compare and Contrast Part 2

Posted by JAZZ SHAW, Assistant Editor in Politics.
Jul 9th, 2008 | Comments

In a previous column, several readers took me to task over my assertion that Senator McCain seemed to have put forward a more sensible, comprehensive set of proposals for both U.S. energy policy and the economy. (These days the two are linked to the point of being inseparable.) Today I would like to take a more comprehensive look at the stated positions, voting records and campaign trail statements of the two primary candidates on some of the key energy initiatives. Both are making admirable calls for advancements in alternative and renewable energy sources, which will be key to our long term strategy as we move away from a fossil fuel based system, but the specifics differ, as do their proposed short and medium term solutions.

First let’s examine their position on biofuels, specifically ethanol. Obama has been a vocal and enthusiastic supporter of corn and grain based ethanol programs. However, more and more research has indicated that this approach presents a number of problems. The large amounts of produce going into this project may be contributing to food shortage concerns, and the process itself is far from sound in terms of environmental issues. (We use up to 2,000 gallons of fresh water to produce a single gallon of ethanol and the waste products are considerable.) Ethanol is also a less efficient fuel than oil, containing only 75% of the energy by volume to an equivalent amount of oil based fuel. McCain is proposing a roll-back of the subsidies for this program, shifting the funding into alternative green sources to produce this type of fuel.

On the issue of nuclear power, while there is still significant, residual opposition to it in this country, the fact is that nuclear fission technology is safer than it was in the past and new technological advancements have greatly reduced the amount of waste byproducts. Storage is still a significant, valid question, but we already have plans in place which seem viable. Meanwhile, other countries in Europe are generating a majority of their electricity using this technology (which we developed) while the United States has not begun construction on a new nuclear plant in more than thirty years. Barack Obama’s position on this has been fuzzy at times, but he has come out against nuclear power on several occasions. McCain is not only calling for the construction of at least 45 new plants by 2030, (100 plants eventually) but working on plans to reduce the political and regulatory gridlock preventing such development.

On wind, solar and geothermal, contrary to charges made by Obama’s campaign, McCain has not argued against these forms of energy, and has called for their continued research, development and deployment. But McCain also realizes that we do not yet have the technology and infrastructure in these areas to meet expected needs. Both candidates want to continue development of these technologies, but Obama’s plan to mandate 25% of the country’s electricity coming from these sources by 2030 is simply not realistic in the opinion of most experts. (See the previous link on that.)

To fill that gap until such technology can fully meet our needs, we will need other domestic energy sources. While you are free to oppose the idea, we may still have no choice but to rely on domestic oil and clean coal sources in the medium term. McCain is calling for lifting the bans on domestic drilling and Obama opposes such a move. I am very puzzled by people saying that “we won’t produce any oil for seven years” with new domestic drilling, and using that for a reason not to do it. If it takes seven years and you never start, you will never get any more oil.

How have the candidates voted on energy in the past? One of the key items on the agenda was the 2005 energy bill, developed primarily by Vice President Cheney. At the time it was noted that the bill contained billions of dollars in giveaways for oil companies while doing little or nothing to support the exploration of alternative energy sources or efforts to decrease our dependence on fossil fuels. The bill was backed by President Bush, but oddly enough, John McCain voted against the bill and Obama voted for it. (And yet, Obama is running ads accusing John McCain of voting with President Bush to give big tax breaks to oil companies, which is certainly an odd charge in light of this voting record.) Obama also supported the recent farm bill which was packed with subsidies for large agri-business interests (as opposed to small farmers) and propping up the ethanol push again, while McCain opposed it. This voting pattern, in my opinion, not only speaks to McCain’s commitment to fiscal discipline, but makes him arguably the “greener” and more environmentally friendly of the two candidates in terms of energy policy.

Taking all of these factors into consideration, I still find McCain to have the more comprehensive and viable energy proposals, which will be a key consideration for many voters this fall. And this plan also seems to be the most environmentally friendly. Obama is to be given full credit for calling on Americans to drastically reduce energy demand, but he does not seem to do much to increase supply. Of the two plans, I still have to give the tip of the hat to McCain’s Lexington Project.

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mikkel

First off, I would like to say that you have highlighted the two biggest areas where Obama has supported something for political reasons that doesn't make sense in real life: ethanol and the farm bill. However he has shown some refinement as facts have come in. For instance, while you are absolutely correct that he supported subsidies for grain and corn ethanol for a long time (which I was very distraught about) recently he seems to have shifted away from those positions and focused on subsidies being primarily for development of cellulose ethanol. I read an interview with him a few months back where he highlighted that the basic scientific facts helped change his mind.

It is also fair to say that for the most part McCain seems relatively caught up about the alternatives and supports developing them. The biggest criticism of offshore drilling isn't that it'll take years, but that even the Bush Administration projections show little effect on prices once the fields are up and running...he's being a bit disingenuous about that. But otherwise I think he's not bad.

This is a specific instance where I believe that comparing details is not as helpful as comparing the process that each candidate would undertake. The fact is that there is no magic bullet and energy security can only be achieved by reducing consumption and increasing alternative supply...of course it's difficult to balance short and long term needs.

So to me it the question isn't really not what the candidates currently support (especially since there are no clear cut answers....well except for freaking geothermal...) but how the nature of the programs they implement will react to changing conditions, both technological/scientific developments and the urgency of the situation.

On this McCain gets points because he doesn't support large government supported projects that often pick the wrong thing for political reasons (cough ethanol) but loses points because a) I feel that if there was a critical crisis he would not react as I don't get the impression he understands the gravity of the situation and b) if there was some new breakthrough that required massive government support but had a high chance of working I'm not sure he'd support it.

Everyone's personal calculus will vary, but I am more apt to support Obama on this not because of his specific details at this juncture, but because of the (supposed) thought process I have read he undergoes in making his decisions. I really do have confidence in him that he'll try to keep the government mostly out of the equation but also be constantly open to new evidence in guiding what the government can support. I also feel that there is a chance that we will face a major energy shortage and require massive (like 10-20% of GDP) emergency programs and I trust Obama more to handle that if it occurs.

I'd also like to point out that much of Obama's energy plan is not dictated from the top. It relies heavily on community involvement and specialization and he has talked often about creating volunteer/vocational groups that will focus on long term education and skill development so "green energy" teams can go around and make local improvements based on local needs. I find this incorporation of policy into the social fabric highly appealing (as long as it's never dogmatic) because it will help us figure out an agreeable solution to a problem that has no clear cut one.

Jazz

Absolutely agree with you on the "no silver bullet" point and have said so here in the past. The final solution will not be one magical pig, but a patchwork of energy sources in areas where they each make the most sense and will also depend on a long term commitment to continue research and development to hopefully open up new options.

I was unaware of Obama moving more toward celulose ethanol, but will do some research on that and update my findings as indicated. Definitely good point for him if that's the case. Thanks for the thougtful input.

Neocon

Thanks Jazz for begining a serious discussion of Issues. I personally appreciate your work and effort in this area to lay out the difference between the candidates on specific policy.

Energy is the one area that will defeat Obama this fall if he does not make a flip flop and if he cannot make his party understand how close to disaster we are in this nation.

In the past we could rectify oil shortages by turning up the spicket. Today we are at about 90 percent capacity world wide. The worlds thirst for oil will only get worse. Not better.

We have to act. TODAY. Under Bush. Not wait till January for a new president. NOW>

Ricorun

First of all, the EIA estimates about future power sources have been notoriously bad in previous years. See, for example here (e.g., pg 4):
http://www.netl.doe.gov/coal/refshelf/ncp.pdf

I suspect it's because they are required to only consider existing laws that are in place. And since there was not (and still isn't) an investment tax credit extension in place at the time of their analysis, they had to assume it would expire. True, if the ITCs are not extended (or replaced with something else like feed in tariffs), then their estimate is probably right -- new energy is going to have a very hard time. And that would be terrible.

However, it is also true that the DOE (the agency of which the EIA is a part) recently published an analysis indicating that 20% of power with wind by 2030 is doable, and subsequently announced an agreement with various wind providers to make it happen:
http://www.eere.energy.gov/news/daily.cfm/hp_ne...

In addition to that, the southwest is ready to burst with solar thermal projects -- again, assuming the ITC is extended. So no, I don't find Obama’s plan to mandate 25% of the country’s electricity coming from these sources by 2030 at all unrealistic.

Regarding nuclear, I'm not against it. And it might be the most cost-effective alternative in places where the wind isn't blowing, the sun isn't shining, there are no readily available hot rocks, etc. But NUCLEAR IS GETTING EVER MORE EXPENSIVE. There have been a few plants already proposed (in FL, TX, and SC), all using the AP-1000 design the French used (back when they were relatively cheap), and the average price tag is on the order of about $7 billion/GW. And their price trajectory is going up -- fast. Then there are practical issues like equipment and manpower bottlenecks. Nuclear has significant problems (even without considering waste, safety, and decommissioning issues). They will also need significant federal subsidies. McCain never talks about that. But no nuclear power plant has ever been built without them. And yet he wants other alternatives to do without incentives. That makes no sense. On an equal playing field, wind is already cheaper than nuclear (even when comparing capacity factors, which is more realistic than comparing nameplate capacities). Every indication is that solar thermal and even solar PV will be there as well in the decade or so it will take for the first nuclear plant to come on line. Plus there are billions of dollars in private capital already chomping at the bit, just waiting for a reliable price signal (e.g., an ITC).

As far as ethanol goes, most experts suggest its effect on food prices is overstated. Nonetheless, it's a bad idea for all sorts of other reasons. But it's not intended to be a permanent solution, only a bridge. Unfortunately, cellulosic alternatives aren't coming up as quickly as hoped. So it's a quandry. But if McCain wanted to provide a prize for something, maybe it should be for a cheap algae-based biofuel. His battery prize strikes me as a waste of money -- it's like giving a prize to someone for doing something they were working as hard and fast as they possibly could to do anyway. There is no apparent shortage of investment, nor incentive, in the battery industry.

Then there's his cap and trade plan, which seems to change according to who he's talking to. Sometimes it's really a cap (as in mandatory), sometimes it's voluntary. Either way the trade part is always free, which makes it open to all sorts of abuse. Obama's auction plan is much better in that regard. There are other dangers inherent in any such plan, but it's harder to cheat under an auction framework.

JSpencer

Funny how the word "conservation" is used so rarely. It's the one strategy that would yield immediate results, and should be one component of any effective energy strategy. Is it too frightening a concept to put forth politically? Are we the American people too jaded and incapable of a little sacrifice? I'm not very happy to see that Obama voted for the 2005 energy bill and the recent farm bill, nor an I happy to see his slowness in understanding the limitations of ethanol; the information has been out there for some time.

runasim

The one thing I do agree about is that there si no silver bullet for our energy problems. Lowering gas prices is definitely not one such bullet.
McCain starts with the wrong end of the stick..

I agree with Mr. Diamond of JP Morgan, who said to Charlie Rose that sharply dropping gas prices might abort all R&D efforts in alternate sources. as it it has in the past..

A better starting point is to find ways to cope with high prices while we work ourselves out of this economic xituation. Obama addressed that, but I heard what he said only in passing.

Obama, at least, is starting with the right perspective. To go any furhter, we need a lot more detail from both candidates. The Lexingotn Project raises as many questions as it purports to answer with its outline.

i agree with Mikkel about ethanol and the farm bill. The farm bill is such a political behemoth it will take either dynamite or the creation of an outside-the-box strategy to reform it. For innovative thinking, I trust Obama much more thatn McCain.

In the meantime, we do have conservation as ra eadily avilable weapon.
It's time to wake up and smell in the coffee, when it comes to our lazy, luxiiant
life atyles.

pacatrue

Thanks for the very informative post, Jazz, and the reasoned responses in the comments. My only point is to echo Ricorun's more informed comment that McCain's plan looks to be underestimating the possibilities of both solar (solar thermal particularly) and wind in the next 25 years. No, they will certainly not replace our current fossil fuel consumption within the current generation, but it appears that, with suitable investment and dedication, they could rise to the 20-30% level in a timeframe similar to new nuclear plants (on a large scale) or oil shale (not a big part of McCain's program, I know).

Ricorun

Perhaps it's also worthwhile pointing out what FactCheck.org (one of Dick Cheney's favorite web sites back in 2004) has to say about McCain's energy plan:

http://www.factcheck.org/elections-2008/mccains...

aba23

McCain has to show that he understands what the hell he's talking about before I can put faith in policies that include the bizarre (giving gov't money to someone who will get very very rich on her own) or the hopelessly toothless and vague (Lexington Project). His refusal to admit the cap in his cap-and-trade stance seems to have dawned upon him, so naturally he is backing away from it (others might use another term).

For a positive spin on the change, see http://corner.nationalreview.com/post/?q=NzRkNz...

Neocon

This go to so and so's website so they can spin the truth or go here or go there is all silly diversion to one inescapable fact.

Gas is 4 bucks a gallon and climbing FAST. Oil production is stagnant. Nuclear power, wind farms, solar panels, cows farting methane have nothing to do with the price of gasoline TODAY.

what are we going to do about it?

TODAY.

JSpencer

The same question was asked and had begun to be addressed in the 70s, then was forgotten and abandon in the 80s. Doesn't look like we can afford that head-in-the-sand approach this time.

Neocon

Don't get me wrong I think everyones got good ideas. Heck Ill farm chicken eggs if it lowers gas prices.

I think we need solar, wind, tidal harnesses, geo thermal. Nuk a lur, changing light bulbs, whatever is all good and Im all for it but that still does not address the one thing thats overriding everything and is not going to get better unless we make so much noise that the powers that be manufacture a lowering of prices temporarily. You know like they did for Bush in 06 elections.

Oil price and a balanced budget are national security issues more greater then any 1000 terrorists. Whose gonna solve them and can we start today?

pacatrue

I think it depends on what you mean by "today", Neocon. My understanding is that there are 4 rough factors at play in the current energy prices: 1) supply, 2) demand, 3) the value of the dollar, and 4) speculation on energy markets. Supply might be the hardest nut to crack on any immediate time scale -- new nuclear, coal, solar, or wind plants will all take a few years to build even if the spades hit the dirt tomorrow. There is increased capacity in some of the fossil fuel suppliers of the world, so we could try jumping on OPEC and others even more than now. That's the main thing we can do "today". Otherwise, we have to wait a couple years to increase our supply.

2) Demand. This might be able to be adjusted the most quickly of anything, but I don't know enough to measure the impact on a "today" time scale. One could simply not buy those oranges from Chili at the grocery store today and then no one has to put them on a boat to us. One could similarly plant a small garden if you have any space again to reduce shipment costs. One could re-use more stuff and buy less. Use flourescent lights, open the shades, set the air conditioner to 75 instead of 68, etc. I realize that people don't wish to do these things, but they all certainly decrease demand and can be done today.

3) Value of the dollar is a tough one. The economically educated should chime in here. Decreasing our foreign debt is one thing we could do to improve the dollar, but that's not so easy. It would take a few years to re-engineer our economy to make this happen. Otherwise, we'd have to re-prioritize the debt so that money going elsewhere now starts paying back those Chinese-owned bonds. Perhaps if the Iraq war budget or prescription medicine had gone towards debt instead.... Do we value reducing our debt over those things? Reduction of consumption of foreign goods might be the only other thing I can think of that's on a "today" time scale that might help on the debt. Otherwise, we've generally got to turn around the economy and get out of the housing crisis.

4) Speculation from energy traders. There's increasing talk about somehow regulating the speculation on energy so that the prices more directly reflect simple supply and demand, but it's not obvious there's a real efficient way of doing this, other than general transparency. If you can't attack it directly, you've got to attack it indirectly. Global insecurity, such as Israel and Iran conducting competing war games, contributes. So you can tackle these sorts of issues. Ironically, simply passing a cogent and powerful program of energy reform might help. If traders can see a future of increased supply, they will likely bid less for those energy contracts.

Here's my summary:

In 2-3 years, conservation and reduction of energy use is the most likely to help. Also, a genuine long-term energy plan, re-prioritizing debt and other things to improve the dollar, and pressure on existing producers. Also, less prospects for oil disruption due to violence.

In 5-10 years, you could have more domestic production from increased drilling, further (likely legally mandated) conservation, increased refineries, and some solar and wind.

In 20 years, all the ideas in other comments will come to fruition.

That's my guess. Anyone else?

Ricorun

Neocon: Whose gonna solve them and can we start today?

Good question. But if you want to start today I'd say start with the biggest, fattest, cheapest, lowest-hanging fruit on the whole tree: energy efficiency. You want something to happen tomorrow at little to no cost? Check out energy efficiency. McCain has finally started talking about it (albeit weakly). Obama has an entire, economy-wide plan to address it:

http://www.barackobama.com/issues/energy/#impro...

There are various studies that support the value of energy efficiency as a major opportunity with little to no levelized cost. But for starters, one of the best is provided by the McKinsey Group:

http://www.mckinsey.com/mgi/publications/Curbin...

I recommend you tour their entire site. The log-in is free, by the way. I also recommend you compare what McCain has said and what Obama has said about it. To me there is no comparison. Either way, this is a biggie, because I can think of nothing (nor have I heard of anything) that has anything close to the kind of short-term impact (and at a lower cost) than aggressively addressing energy efficiency.

mikkel

Ricorun: I believe I read somewhere that if you count the energy saved by increased energy efficiency since 1950s as its own power source, it would make up the greatest contribution. You are exactly right.

LadyLogician

JSpencer - conservation indeed does need to be a PART of the solution but not the whole solution.

Jazz - I disappointed to see that you didn't discuss SUGAR ethanol. Brazil has perfected the technology and has cane ethanol and the technology to make it to export. We have cane sugar farms in Florida and Hawaii and a struggling Sugar Beet industry that could provide the resources easily.

LL

Neocon

More deflections.

Rico were you dispatched by Barak Obama dot com?

Once again your talking about changing light bulbs. Your talking about all these things that does not even address the price at the pump. Your talking about energy efficency which is all fine and dandy. Lets all change light bulbs. Lets all buy cheaper cars. Lets all spend a trillion dollars retooling our homes but that still does not address oil.

If we save oil. They cut back on production. The price remains static. If Iran launches a missile. The price of oil goes up and aint a thing we can do about it.

Dilling and producing our OWN oil discounts the world supply. Energy conservation just means theirs MORE FOR CHINA to use.

Conservation and Oil Drilling means there is more for US to use.

Obama does not address that and you know it.

cva59usn

John Mc Cain and Barach H. Oboma are staying away from the number one issue: When are we going to start drilling for oil in all of the choice locations in our own country? Is there any reason not to, or are our politicians just plain stupid? Their excuses that it would take years to get started
is getting a bit old. It seems to me that if John Mc Cain or Barach Oboma can't or won't get off their backsides and change their negative opinions of our country being self reliant for its oil needs then perhaps neither of these politicians is suited to run our government.

What are the real reasons for a big percentage our countries economy being siphoned off to middle eastern oil concerns or are we just plain stupid to keep listening to their insipid arguments that all is hopeless and that we are responsible for this. In fact we are for electing politicians with no gumption or reasoning powers to determine what is best for our great country. All of their talk is meant to get them into office so that their party can get more jobs for their own elk. They don't give a damn about our great country which is founded on free enterprise-not political hacks that put their ambitions ahead of our country needs.

Neocon

Yes Ive read Obama's plan. HES IN LOVE WITH THE YEAR 2030. Everything he does will be fixed by 2030. Super. What about next YEAR??

Your talking about 15 percent of the oil we use daily is used to produce electricity which you guys keep harping on. By saving 15 percent on energy effficiency we will save 515,000 bbls of oil per day.

By saving 15 percent on driving or gasoline we can cut our consumpiton by roughly 3 million bbls of oil per day.

SUUUUPPPPEEEERRRRRR. So now either OPEC cuts production by 3 million bbls of oil per day and the prices keep heading up or else China and the rest of the world says thanks and scoops up our oil.

NOTHING SOLVED. Either way were paying OPEC to rape us.

pacatrue

Neocon, I'm actually somewhat surprised by your response. You asked what we could do TODAY. I take today to mean in the next year or two. To get oil prices down, you either increase supply or decrease demand. There is no way to get large numbers of oil drills down in ANWR or offshore and producing oil in one year. So we cannot increase our own oil production today. We can reduce demand today and that's what both ricorun and I said. Conservation and efficiency reduce demand in the near-term. How is giving you the main way to decrease demand today a deflection?

Now, of course, we can drill for more U.S. oil in the medium term of 5-10 years and this too is likely to decrease the price of oil. There are good and bad aspects of this which can be debated (basic good being domestic control; basic bad being environmental damage and global warming). But 5-10 years is not today. Can you tell me your plan for drilling for oil that will increase supply within one year?

Final note: drilling for the medium term and efficiencies for the short term are not mutually exclusive. One can do both.

Neocon

We save 3 million bbls per day by conserving. Great. OPEC just cuts production by 3 million bbls per day and the price keeps shooting up.

Opec has said they could increase production but they do not. Why is that you think?

What dont you guys understand about this?

Secondly your wrong I can get oil to the market in 30 days and drillers can get oil to the market in 9 to 18 months..........Just turn em loose. Both the GOP who wants to protect the Oil companies monopoly and the Democrats who want to save the squirrells use the same talking points and they are all lies.

pacatrue

Neocon, how can you get 3 million bls per day (or some significant amount such that it affects oil prices) to the market within 30 days? Genuine question.

Jim_Satterfield

Secondly your wrong I can get oil to the market in 30 days and drillers can get oil to the market in 9 to 18 months..........Just turn em loose. Both the GOP who wants to protect the Oil companies monopoly and the Democrats who want to save the squirrells use the same talking points and they are all lies.

What I do understand is that these claims are completely and utterly false. If that was true there would already be production increases from the millions of acres that are currently open for exploration and drilling.

Neocon

Now your just being silly. Who said anything about getting 3 million bbls to market in 30 days.

I said I can get oil to market in 30 days and can have drillers get oil to market in 9 to 18 months.

Actually i should correct this I can have oil in the system in 30 days it would probably take 6 months to actually get to the pump.

Neocon

What I do understand is that these claims are completely and utterly false. If that was true there would already be production increases from the millions of acres that are currently open for exploration and drilling.

Nope their are 1000s of capped wells right now through out the United States. In fact California is actually starting to uncapp wells around LA for the purpose of these low producing wells to begin pumping oil once again. Takes nothing more then the oil truck to pull up unload the storage tank and take it to market.

Secondly the oil companies right now are setting on known reserves that are not being produced because we have inefficiency in the system and secondly their long term viability must be maintained to their shareholders. In a true national emmergency they could produce more then they are now.

Thirdly if leased land in the clutches of these oil companies were turned over to the wildcat outfits then oil production could be in full force in 9 to 18 months. Not 10 years which is the talking point.

the Democrats are just so wedded to the "OH MY GAWD WE CANT DRILL ANOTHER OUNCE OF AWL" meme that they have stopped looking at facts and just trust Howard Dean and Nancy Pelosi to tell them what they need to know.

Neocon

Lets address oil leases.

First understand where Im coming from. Oil is NOT the long term answer for us. We have to do alternatives and we have to do them today. However alternatives are 2025-2030 and counting. What about today?

It takes 2 to 3 million gallons of water per day to run a successful oil producing field or to drill an oil producing field. Many of Nancy Pelosis imaginary oil producing leases are sitting in areas that even if they contained massive quantites of oil would be impossible to develop because of the need for water.

Oil finds in Alaska have been found and abandoned because its just not possible to develop them without water. No, melting snow is not economically viable.

Why is it that the Saudis are drilling off their own shores? Kuwait? Why do you suppose the USA wants to develop off the coast of the US? Water. Yep. It takes a ton of water to drill and maintain working fields. 2 to 3 million gallons per day.

So in this sense I will defend the oil companies as they are sitting on leased land that might or might not have oil but drilling in these areas is a conundrum because it requires water.

The find in North Dakota is estimated by some to contain 450 billion BBLS of oil. Much more then Saudia Arabia. Saudia can draw water from the ocean to develop their wells. North Dakota is a different story. Production will be limited to the amount of water that is available for Oil.

Thus unless we get a massive pipeline to the north Pole for water we are restricted in that find. That brings us back to offshore drilling.

How does leasing work? its a bidding war. The highest bidder gets the prize. The big 5 certainly have more money then does the wildcaters and thus they get the prizes. They then sit on finds because their long term viability depends on having oil over a long long time to produce. They are not going to go willy nilly producing like madmen and then run out of oil and suddenly find themselves with no oil to pump and thus effectively ending their corporation.

pacatrue

neocon, I'm curious. Are you or were you in the oil business or is this just based on reading / conversation / research, etc.?

Neocon

My family has been in oil for decades. We even have patents in the business.

runasim

I ask again, if oilmen are so eager to drill, why aren't they drilling in the areas already available to them?

While additional drilling might play a part, it won't play a significant part in reducing gas or oil prices in the US, whether the effect comes in 5, 10, or 30 years.
Prices are set by the global markets, and US contribution to global oil supplies would not be significant enough to affect global prices by more than a xx cents.
Keep in mind that worldwide demand would also be rising in th interim.

A pertinent question to ask is whether taxpayer investment, and that will be expected, is best devoted to drilling or to alternate energy sources, fuel eficiency and technologies that promote conservation.

There are parallels between the mindset of those like McCain wjo trun to drilling as the inevitable fallback position, and the mindset of those in the US auto industry. They also stuck to old paradigms and, as a result, have been beaten at their own game by other countries, notably Japan. .

Other countries, like in Scandinavia, are even pulling ahead of the US in innovation. If the US isn't careful, we'll lose out even on that front. Time is running out. We either face the music and prepare for the future or we stick to old ways and repeated failures.

Jazz

Man, I go to bed for a while and you people just really go to town. Lots of good information provided in comments, which I've been reading and will reference in the next follow-up on this piece. Thanks!

Ricorun

Neocon, would it be possible for you to provide some documentation for the things you're talking about? I've done quite a bit of reading about this and never came across any mention of essentially anything you've said. I also passed it by a friend of mine in the oil business and he thinks most of what you say is total bunk.

Neocon

I also passed it by a friend of mine in the oil business and he thinks most of what you say is total bunk.

Yep just as I suspected. Barak Obama dot com has sent you over here havent they. I get some guy that I have never seen posting at a site show up everytime I start talking about this with almost identical talking points and how Barak Obama is going to save the world.

I get that all the time. Oil people reject my thoughts. Democrats reject my thoughts. GOP'ers reject my thoughts. All for 3 and vastly different reasons. Dems to stop drilling and save the owl. GOP to protect national security. Oil company people to keep the heat off them and to continue to ensure the financial longevity of their business.

However if your really interested in the truth and not just talking points to keep your own beliefs in your made up fairytale world sound then Im sure there is enough information out there to give you a good start.

Look it up yourself. What I posted is in my head not on wikiapedia dot com. What I posted is 40 years of accumulated knowledge of the business. Not what I read at wikiapedia.com.

If in this day and age to make something the truth you must post a reference to a link on the internet then all I have to do is start a blog write what I know and it becomes the truth.

Is that what the internet is about.

Fine lets start with gull island. If you want to learn.. Start their. Perhaps Carbon Injection techniques as opposed to water injection. Mabey you could sit in on symposiums on oil shale and its possible ramifications and how your going to heat it up and get it out of the ground. Where the water is going to come from.

Maybe you could try sitting in on Conoco/Phillips town hall meetings as they discuss the state of the oil industry. Or Exxon/Mobile or BP Amoco. Sinclair oil is a strong provider of information on the state of refineries 3 of which they operate and the oil business.

Perhaps you could join a small cap investment team whose function is to bring oil to market using leases that are not exorbitantly expensive and try to drill and produce in areas where the big two such as Exxon or Shell are willing to sell you co2 for carbon injection and someone else is willing to sell you crushed limestone so you can drill without using exorbitant amounts of water.

Perhaps when you;ve set in on and done all these things for 40 years you can come back and tell me Its bunk. As for me I've said the last thing Im going to say on this. You as voters can either educate yourselves on this topic or you can continue listening to what talking points you believe and go on your merry way.

Have a good day and enjoy that 8 dollar a gallon gas coming to a gas station soon......NEAR YOU.

DLS

"Funny how the word 'conservation' is used so rarely."

It is used and misused constantly, not rarely, and it is misused because in no way is it and in no way can and will it ever be a solution in and of itself. Nor is it right or appropriate to forcibly reduce people's standard of living (with exceptions for those deciding on and enforcing the reducing, in practice), or otherwise engage in elitist folly such as we're hearing about forcing down speed limits on highways.

DLS

"I agree with Mr. Diamond of JP Morgan, who said to Charlie Rose that sharply dropping gas prices might abort all R&D efforts in alternate sources. as it it has in the past.."

Twice, there has been a substantial rise in motor vehicle fuel prices, and after waiting, the auto makers have offered smaller vehicles to consumers -- which left the auto makers burned after fuel prices went back down and consumers moved back to larger or more powerful vehicles.

It is a very risky thing for the automakers to retool and risk being "burned" again, which is one likely reason why they are late to build and offer smaller vehicles, even if "this time it's different." (What makes more sense is the offering for sale here in the USA of smaller vehicles that already are offered in Europe; no retooling would be needed.)

* * *

"As far as ethanol goes, most experts suggest its effect on food prices is overstated."

Then there is the outright silliness of "linking" ethanol here in the USA to "the food crisis" [sic] in the Third World, accompanied by pathological guilt or outrage. [sigh]

Ethanol has other problems, such as inferior energy density as well as the issues with how it is managed and subsidized (in what looks like a corrupt manner).

Too bad we don't have isobutanol from switchgrass already, but oh, well.

* * *

"I ask again, if oilmen are so eager to drill, why aren't they drilling in the areas already available to them?"

The more important issue is that many good areas aren't available to them.

* * *

"Have a good day and enjoy that 8 dollar a gallon gas coming to a gas station soon......NEAR YOU."

Only the diseased fools who say we need this because it will reduce "global warming" [gag] will be happy about it. Or those who want to heap huge new taxes on the cost in addition to it. Or those who want to socially engineer society by levying sumptuary ("sin") taxes on engine displacement or horsepower or impose a "fee-bate" scheme where extra costs are added to larger vehicles and transferred as subsidies to lower the costs of smaller vehicles, so the circus animals tend over time to jump through the preferred, "proper" hoops.

runasim

DLS.
A synopsis of your rant laced comment says that society should follow consumer whims. If consumers developed a taste for poison, then, poison should be marketed at affordable prices. i think not.

While McCain and the oilmen dangle the mirage of cheap oil in front of consumers' eyes, climate change keeps on rolling along. By going after the mirage, we are wasting both time and resources, thus hampering efforts to develop coping mechanisms for the inevitable relatively high oil prices. The increase in demand by developing countries, plus the decreasing ablility of oil supplies to keep up, will guarrrantee relativley high prices, unless you're proposing to go the way of iran, which is going broke because of state sublidies to consumers and, thus, embrace socialism.

The customary taxation epilog never fails. The illusion that people don't need to pay for what they get is a mass psychosis, by now, as evidenced by not only failing to pay for our wars, but also by an unwillingness to pay for cheap gas.
Cheap gas also costs, not only in terms of prospects for the future, but in tax-payer subsidies. A lot of those taxpayers don't own cars and couldn't afford long road trips if they did, so this is wealth distribution of the first order.
it's ridiculous to expect to benefit when it suits but then cry 'wolf' when you have have to contribute to the benefits garnered. The anti-tax people want a free ride and nothing less.
When did a free ride become a right?.

Polimom

I don't buy that we can start drilling off-shore, and then "get it to market" in 9-18 months. That might be true in areas that already have supporting infrastructure, but not in this case. There really is no short-term solution, and people are going to just have to recognize that.

And while I have no figures to support this, my feeling is that $4 / gal (and related costs) could be as low as we can expect in the future.

But I still think we should start drilling off-shore. That oil (and ever-more domestic supplies) should be for US domestic consumption, and it should be part of a wider energy policy. If we don't become self-sustaining (or as nearly so as possible), then the coming global melt-down as people start fighting over diminishing supply is going to suck us right in.

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