Wednesday, June 25, 2008

Cheap vs Obsolete: Is the ‘Oil Drilling Debate’ Masking the Real Issue?

Several media sites have recently wrote scathing reviews of Bush’s plan to open up protected areas to drilling, while other media agencies wrote glowing reviews. Is it a political move void of all reason and common sense, or an enlightened plan to help Americans? President George W. Bush recently urged Congress to overturn a 26-year ban on offshore oil drilling in the U.S. and also open a part of the Arctic National Wildlife Refuge (ANWR) to petroleum exploration. The arguments for and against were polarized, but for the most part, they all made some fair points, which begs the questions: Is it a good idea or not? Will it really make gas cheaper or not?

But the real underlying question being skirted around is this: Should we be focusing on making oil cheap or should we focus on making it obsolete? Of course in an ideal world, gas would be cheap and increasingly obsolete. We don’t live in an ideal world. It’s a catch 22 for Americans who are suffering from high gas prices, and it’s only natural to want to find ways to relieve that pressure quickly. The concern, however, is that by focusing on unrealistic “quick fix” solutions, we are just scraping ourselves up a little more time to keep avoiding the real issue.

It is not certain whether or not drilling for oil in the US will lower gas prices. For now, that answer is largely a matter of speculation (and will therefore depend almost entirely on who you’re asking) but there are a few basic facts and premises that can help us make sense of the debate. There’s not an absolute right or wrong, but we have to consider the cost/benefit ratio and consider which side makes the most sense. According to a 2004 study by the government's Energy Information Administration (EIA) drilling in ANWR would trim gas prices only by 3.5 cents a gallon by 2027. Even if we immediately opened the entire outer continental shelf to offshore rigs, and all of Alaska, the impact on gas prices is estimated to be very small and would not arrive until years from now. It wouldn’t even make a dent in prices at all in the immediate future, because there aren’t enough refineries to process large amounts of crude oil, and those would take time and considerable expense to build.

But on the other hand, finding huge oil reserves in the US could send a message to the market that there’s even more oil to go around, which could put speculation under control—at least for a little while longer. But will it? Based on past trends, probably not. Even if we found huge oil reserves, and we already know there are some out there, it’s not likely to change market conditions all that much. The world already has more than enough supply to meet demand. Oil prices are based on a global market, and even in the best-case scenario, the dent the US can make in that market is negligible. We simply do not have enough oil reserves—even in a wildly imaginative and positive scenario—to significantly change the price of oil in the global market.

Some politicians have publicly stated that they actually want higher gas prices. It’s the only way to wean ourselves off of our unhealthy addiction they say, but this view certainly lacks immediate compassion for the working class that has to find a way to get to work every day and still put bread on the table to feed their children. Environmental ideals are important, but they seem elitist and cold-hearted when you stack them against America’s families. However, the sad truth of it is that there will likely be no noteworthy relief in gas prices whether we drill or not.

But even if drilling did lower prices substantially and give immediate relief—a prospect that even Bush himself says is unlikely—no one can logically argue that oil will last forever. Peak oil is a real concern, so why aren’t we trying harder to get off of our oil addition altogether? Many question the validity of pouring money into even more oil infrastructure. Ideally, oil will be a non-issue sooner rather than later. It makes more sense from a long-term perspective to invest in clean renewable technologies that will always be there for us to rely on. Yes, we need oil at the present moment, and even in the best case scenario we will be at least partially dependent on oil for another decade or so, but if our predominant focus is on making oil cheaper, that’s only going to get us further away from the ultimate goal of making oil obsolete.

Posted by Rebecca Sato

Original here

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