Wednesday, August 13, 2008

Can We Drill Our Way Out of the Oil Crisis

The simple answer is no we can’t, however here is a better question. Can we, as a nation, afford to not drill for more oil here while we transition to alternative energy platforms?

The answer to that is the same, no we can’t, on several levels. The first and foremost is plain and simple economic reasons. While some politicians claim that we should focus strictly on finding, and implementing alternative energy sources, and just “bite the bullet” putting up with a “little inconvenience” for a while, they are neglecting to mention that what they consider a “little inconvenience”, to some is the choice between having heat in their home vs. having food on the table.

Americas productivity, and economic strength has been, and is still dependent on “cheap energy”. Up until the mid 70’s that was the case, and the U.S. economy was its strongest when we had cheap energy, and as we have seen, manufacturing, especially, was hurt when escalating costs, and limited supply became a factor since then. A number of factors played into the loss of this “cheap energy”, starting with the divestiture of Oil Company owned wells in the Mid East, and then the subsequent rules, and regulations imposed on U.S. oil companies domestically added to the problem. This would not have been too important an issue as technology came up with an alternative that “could save the day”, nuclear power.

So what happened to that new technology? Congress is what happened, scare tactics from many sources, especially groups like Greenpeace, pushed to have the technology buried. I can go into all the reasons they claimed, but suffice it to say the cost/emissions/waste arguments are all specious, but they prevailed anyway, because the media picked up their banner, and ran with it without any true research into the facts, and the general public bought into the scare tactics, and summarily Congress reflected this in bills that would essentially stop all future production of nuclear power as an alternative to fossil fuel sources.

Add to the erroneous treatment of nuclear as an alternative, that same group of Greenies, where well on the way to stopping the construction of refineries in the United States, further hindering our ability to produce cheap energy. In fact due to aging facilities we actually have 20% fewer oil refineries today than we did in the 70’s.

So what was/is the fallout? Well there are numerous repercussions many not felt right away, but over time, as we see now they are devastating. Over the past thirty years it has cost us our once unmatched manufacturing industry, which in turn cost American’s jobs, and subsequently forcing U.S. businesses into foreign lands in order to be able to maintain their profits. Some of those jobs were absorbed into the “services” industry, but now with oil reaching far over the $100.00 a barrel cost, we are now seeing even the services industries like trucking, and other forms of transportation being adversely affected, and in turn the cost of goods including food are also increasing. Add to this the cost of business, heating and cooling offices, stores, warehouses etc. And the consumer with rising fuel costs, for travel, work commute, heating, food, and a myriad of other expenses can no longer afford to spend as we once did. Once again we see more loss of income, and jobs for the average middle class American. It is a cascading effect that will eventually destroy not only our quality of life, but if not stopped the country itself, along with all our freedoms. Which is the second reason for more domestic drilling - security. By our continued use of foreign sources for oil we are at risk of being shut off, which can have devastating effects, i.e. the gas crunch in the 70’s, and also impact our national security.

Now some of our elected leaders are telling us we need to deal with a “little inconvenience” while we transition to new technologies for energy. How much more will we as a country be able to sustain before we loose what little manufacturing and service industry we have left?

Can we drill our way out of the problem - no emphatically NO, but we need to maintain our ability to sustain our current businesses as well as the quality of life for middle, and lower class working families. Allowing American oil companies to drill for more domestic petroleum, and by lifting restrictions on refineries, and nuclear power, while we develop new technologies to get away from the use of petroleum energy is necessary. Providing tax incentives to oil companies, and other domestic energy producing companies instead of taxing them more, which will only trickle back down to those that are most affected, the lower, and middle class, would be the intelligent, practical, and safe way to proceed.