Traitor In The Energy Debate? Guilty; With An Explanation
Scott Tinker has some interesting opinions in the Houston Chronicle concerning Big Oil and conceptions therof. THE CHOICE: BIG OIL OR CHAVEZ? contains some of Tinker’s “myths” and “realities” of oil science and oil politics.
The American public is severely misinformed about energy. A few energy myths:
• American energy independence is possible.
• “Big Oil” companies control gasoline prices.
• “Big Oil” companies make obscene profits.
• We are running out of fossil energy (oil, natural gas and coal).
• There are renewable (clean) alternatives to oil, natural gas and coal available today.
• People will pay more for clean energy.
• The oil industry is a major polluter today.
• Energy efficiency and conservation can solve the problem.
Here are a few energy realities.
• Political spin has little basis in energy reality; talk about energy independence is misleading and naive. America is energy interdependent for the foreseeable future and policies should be made accordingly.
• The cost to transition the transportation infrastructure to nonliquid energies is in the trillions of dollars and will take many decades, even if we implemented a full-scale commitment today.
• Big Oil companies combined control less than 10 percent of the world’s conventional oil reserves. So “Big Oil” cannot control gasoline prices.
• U.S. political leaders beat up on Big Oil with unfounded rhetoric about obscene profits. Big Oil companies, even in the past few “obscene profit years” have typically made less than 10 percent profit annually, which is not very good relative to many other industries. A healthy industry does not exhibit the kind of layoffs and mergers that continue to characterize the U.S. petroleum industry.
• Oil, natural gas and coal provide 86 percent of global energy. Consumers must be prepared to pay for cleaner forms of fossil energy, such as electricity from gasified coal plants that are ready to sequester carbon dioxide emissions underground, and unconventional oil and gas reserves whose exploitation demands more expensive technology.
• Because of its massive pursuit of coal-based power, China must be a major part of any global strategies to reduce carbon emissions.
Now, I don’t subscribe to everything Mr. Tinker puts forth. Or more accurately, what he does NOT say. In a nutshell, Big Oil are too good at lying for their own good. Are they taking advantage of the situation to increase profits? Sure. Is it immoral? In a pure and simple world maybe. But that is not what we inherited, nor what we will leave our children.
Having said that, I must also confess to being wholly unconcerned about oil companies during the boom days of consumers. It IS bad that there have been so many mergers, and I believe competition is greatly stifled by them. On the other hand, when gasoline was flowing into my car at 80 or 90 cents a gallon I wasn’t complaining about how little oil companies were making.
Reading Tinker’s article I had a memory flash, no doubt induced by years of inhaling God knows how many varieties of pollutants. I think it was The Discovery Channel, doing one of its more un-Disneyesque broadcasts showing how life (and death) in Africa really is.
During the wet season there is a large body of water that is teeming with life and it is frequented by animals dependent upon it for sustenance. Then the dry season comes and there are large numbers of hippos and crocodiles jammed together like sardines in an ever-shrinking water hole. Baboons and wildebeasts are regular victims of the crocs as they brave danger to quench their thirst. The hippos bide their time, relieving their boredom occasionally by basically daring a croc to have a go at a young hippo.
Then the rains come again and all is well. Life thrives and the cycle is repeated. You would think the animals might figure out after several million cycles that there might be a better way of getting through the year.
Of course, they are not human. But WE are, and to be honest, since the early 70’s our petroleum lake has shrunk and expanded, in cycles that are not conducive to any form of steady planning of an economy. Let’s face it; we are at the mercy of oil supplies, and I must agree with Tinker somewhat in acknowledging the fact that Big Oil does NOT cartel the supply; nations do. They are NOT our friends, and never will be.
Now, like our African friends with brains the size of walnuts, we await the late Autumn each year….gasoline prices drop, oil prices drop, and all is well again. Then along comes Spring and Summer, and the vultures in the commodities markets prey upon ANYTHING that smells remotely like a quick profit. They are, in many ways, the crocs of the dwindling pond. Used to be it took a major hurricane in the Gulf of Mexico to drive the market up. Now, a Nigerian oil worker can have a fight with his wife and that is good for $5 a barrel.
We are spoiled in two ways: cheap and constant energy is a birthright. Along with that is the growing realization that hydrocarbons are not all that desirable from an environmental point of view. I am NOT speaking of global warming. I don’t need to. It is still scientifically debatable in my opinion. But, what I’ve seen with my own eyes is not.
Years ago someone who had a small plane took me up for some flying (terror rides I called them). Although in the middle of summer, the pilot explained that once we got above 5,000 feet or so we would escape most of the humidity in the atmosphere.
“Of course,” he said, ” we’ll also have to fly through the ’shit belt’.” Upon inquiry, he showed me. As I scanned the horizon there was this blanket; a brown layer that looks like a dirty stew. It is mostly the byproducts from all those vehicles pumping it out every day. We don’t see it because we’re not normally up there. I am neither a rocket scientist nor a meteorologist, but one doesn’t need to be to figure out that this brown blanket is not exactly good for everyone.
Whatever direction we take in the future it is going to be expensive. But, this is a time for a mixture of JFK’s asking us to ask what we can do for our country and Reagan’s eternal optimism of the American Spirit. As an incorrigible baby-boomer I can say with some firmness that there is little that is NOT possible if this nation…as a nation….puts its mind to it.
It is great political theater to demand that Big Oil be punished through taxation. Leave them be, or confine government action to redirecting their motives for investment.
There is a way to satisfy our energy needs for far into the future. If Big Oil becomes Big Energy, then so be it. As consumers we have eaten our cake and gotten it, too. We can still do so but the cake is going to be a bit more expensive.
In my next post I’ll attempt to expand this by delving into the real sleeper of the future of energy: fusion.
Michael Linn Jones