All at Sea: Logic of off-coast oil drilling deeply flawed
By Thomas Kostigen, MarketWatch
Last update: 7:26 p.m. EDT July 3, 2008
SANTA MONICA, Calif. (MarketWatch) -- Coastal drilling for oil is mindless, not only from a supply perspective but from an environmental perspective. The amount of oil to be found off
our nation's coasts would be a trickle of what's needed to meet consumer demand -- and that's what the oil companies say! Yet, they and their supporters in Congress move forth trying to lay claim to new oil leases on land and sea.
The salvo waged by critics is that as it stands oil companies are using only about one-quarter of the leases they already have. The oil companies' response: "It takes a long time to drill."
Exactly. About 20 years, in fact. Any oil to be had in Alaska, for example, wouldn't make it to us until 2028. And do you know what that would mean in terms of savings? The Energy Information Administration estimates the best-case scenario price drop would be about 1% per barrel of oil. One percent. Wow -- sign us up! That's about as good a savings as the gas-tax reprieve. Meaningless.
This all, mind you, is if the oil companies decide to send any Alaskan oil they may find our way. The reserves they already have there are mostly shipped to other countries. Sort of makes you wonder how in the name of national security and energy security (or any other phrase where they can work in the word security) this can all be justified. (Much of BP's Alaskan oil from Prudhoe is shipped to Japan which is closer than the East Coast.) Speaking of security, it's rather curious but no one much speaks about the environmental security of all this offshore drilling talk in the context of the Supreme Court's ruling to halve the fine to Exxon for its Valdez oil spill.
Drilling creates hazards, and costs the economy dearly. Take a look at the local Alaskan economies that suffered because of the Valdez spill. Not a pretty picture.
Now let's tackle climate change. Drilling for more oil that again the oil companies themselves admit is not a sustainable energy supply will eventually put more carbon dioxide into the atmosphere, whether through our tailpipes after the oil has been turned into gasoline or from our furnaces after we use it to heat out buildings and homes or from any other means for which it's burned.
According to the most recent International Energy Agency forecasts, consumption is set to rise 50% by 2030. That means we'll have to increase oil supply by that much to meet demand. It isn't going to happen.
Reward for real change
The oil companies are fooling themselves by coastal drilling and at the same time they are trying to con us into buying into their scheme. No more predictable oil supply, folks, no more business. Profits tumble. Stock prices drop. Now imagine if an oil company such as Exxon Mobil with all of its infrastructure and distribution (i.e. gas stations) announced a plan where it would wean itself off petroleum supply while at the same time staging in an alternative sustainable energy supply. Not a "We're exploring...," or "We're investing...." No, this would be a "This is how we are going to do it so by 2030 we'll be supplying you with a 100% different source of energy."
Its long-term prospects would be massive. Its market value would shoot through the roof and not be questioned. It would endear the $3 trillion or so of socially responsible investment dollars out there. And it would serve as a model for change, for the future. It would become the Google of energy.
Instead, oil companies are acting like cigarette companies just before they took their long, long fall amidst fines and court cases: staring down the face of warnings and trying to make us believe a newfangled cigarette (read supply of oil) will save them.
Last update: 7:26 p.m. EDT July 3, 2008
SANTA MONICA, Calif. (MarketWatch) -- Coastal drilling for oil is mindless, not only from a supply perspective but from an environmental perspective. The amount of oil to be found off
our nation's coasts would be a trickle of what's needed to meet consumer demand -- and that's what the oil companies say! Yet, they and their supporters in Congress move forth trying to lay claim to new oil leases on land and sea.
The salvo waged by critics is that as it stands oil companies are using only about one-quarter of the leases they already have. The oil companies' response: "It takes a long time to drill."
Exactly. About 20 years, in fact. Any oil to be had in Alaska, for example, wouldn't make it to us until 2028. And do you know what that would mean in terms of savings? The Energy Information Administration estimates the best-case scenario price drop would be about 1% per barrel of oil. One percent. Wow -- sign us up! That's about as good a savings as the gas-tax reprieve. Meaningless.
This all, mind you, is if the oil companies decide to send any Alaskan oil they may find our way. The reserves they already have there are mostly shipped to other countries. Sort of makes you wonder how in the name of national security and energy security (or any other phrase where they can work in the word security) this can all be justified. (Much of BP's Alaskan oil from Prudhoe is shipped to Japan which is closer than the East Coast.) Speaking of security, it's rather curious but no one much speaks about the environmental security of all this offshore drilling talk in the context of the Supreme Court's ruling to halve the fine to Exxon for its Valdez oil spill.
Drilling creates hazards, and costs the economy dearly. Take a look at the local Alaskan economies that suffered because of the Valdez spill. Not a pretty picture.
Now let's tackle climate change. Drilling for more oil that again the oil companies themselves admit is not a sustainable energy supply will eventually put more carbon dioxide into the atmosphere, whether through our tailpipes after the oil has been turned into gasoline or from our furnaces after we use it to heat out buildings and homes or from any other means for which it's burned.
According to the most recent International Energy Agency forecasts, consumption is set to rise 50% by 2030. That means we'll have to increase oil supply by that much to meet demand. It isn't going to happen.
Reward for real change
The oil companies are fooling themselves by coastal drilling and at the same time they are trying to con us into buying into their scheme. No more predictable oil supply, folks, no more business. Profits tumble. Stock prices drop. Now imagine if an oil company such as Exxon Mobil with all of its infrastructure and distribution (i.e. gas stations) announced a plan where it would wean itself off petroleum supply while at the same time staging in an alternative sustainable energy supply. Not a "We're exploring...," or "We're investing...." No, this would be a "This is how we are going to do it so by 2030 we'll be supplying you with a 100% different source of energy."
Its long-term prospects would be massive. Its market value would shoot through the roof and not be questioned. It would endear the $3 trillion or so of socially responsible investment dollars out there. And it would serve as a model for change, for the future. It would become the Google of energy.
Instead, oil companies are acting like cigarette companies just before they took their long, long fall amidst fines and court cases: staring down the face of warnings and trying to make us believe a newfangled cigarette (read supply of oil) will save them.
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