Is new drilling a necessary evil?
A natural gas hybridNational security. We all know that foreign oil dependence is a national security risk, but our increasing national debt might be an even bigger national security risk if not taken seriously, claimed Secretary of State Hillary Clinton recently.
While I couldn't agree more, it seems to me that energy independence is the key to both risks.
Finish reading: Is new drilling a necessary evil?
Labels: CAFE, Foreign Oil Dependency, Hybrid Vehicles, natural gas
posted by Dahcredyns at
9:33 AM
7 Comments:
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National security. We all know that foreign oil dependence is a national security risk, but our increasing national debt might be an even bigger national security risk if not taken seriously, claimed Secretary of State Hillary Clinton recently.
While I couldn't agree more, it seems to me that energy independence is the key to both risks.
Certainly, health care reform and green energy are two great ideas put forth by the Obama Administration to deal with these security risks. Unfortunately, America simply isn't yet ready for major health care reform, at least not any package that isn't put forth with broad bipartisan support. Besides, if we don't significantly reduce end of life expenditures and downsize the US lifestyle, nothing is going to save the US health care system. Likewise, while green energy has guaranteed potential, it's ability to drive the new economy appears a few decades away from maturity.
So, do we just wait and embrace dependency and risk, or can more be done in the interim?
Obviously, the easy answer for many is new drilling, which is not an option for most on the green side, and understandably so. Assuredly, new oil drilling seems a step backward. Even natural gas drilling doesn't seem a big enough step forward. Yet, do we really have a choice?
Studies suggest that new drilling could create as many as 13 million new jobs, while reducing the deficit and firing up the economy. More important, if true, I'd also bet that new drilling could be packaged with more aggressive CAFE requirements, more tax credits for hybrid cars, etc - at least that would be the only way I could conceivably concede to new drilling.
Don't get me wrong. In my perfect world, I don't want ANY new drilling, including natural gas drilling, but does that make any sense in the real world, particularly the political world? Isn't staying dependent upon foreign oil and foreign natural gas for 3 more decades until our green new world vision finally becomes reality nothing short of denial, and an unnecessary risk to the US economy and national security?
Is new drilling simply a necessary evil to achieving a new energy paradigm before its too late?
Lets have some fun and do some math. In December of 2009 we imported about 325,082,000 barrels of oil. There are 42 gallons in each barrel so we imported 13,650,000,000 gallons. That's one heck of a lot of oil in anyone's book.
If we imported that 325,082,000 barrels and paid $70.00 per barrel we were spending about $22,750,000,000. If that is for one month then in just one year we will have spend $273,000,000,000 on oil.
So here is my test for you to take.
If we took that $273 Billion and spend it in the following ways how many of each item could we pay for.
Q1. How many hybrid cars can you buy with $275 billion dollars
Your Answer: __________________
Q2. How many Chev Volts at say $32,000 could you buy ?__________
Q3. If the average cost of solar panels on each home to make it energy neutral is $40,000 after rebates, how many homes could you put solar panesl on
Your Answer: _________
I will come back later and check your answers, LOL
Tom G.
Referenced website:
http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm
Tom-
Are these trick questions?
You couldn't spend more than a few billion on buying hybrid cars today. Such numbers simply don't exist, and won't exist for quite some time.
You can't even buy a Volt yet, and there probably won't be more than about 25,000 Volts available for purchase per year until 2015 or so.
Even if you guaranteed the money today, it would still take probably a decade to fully implement the supply chains and manufacturing capabilities to buy $350 billion worth of hybrids. Of course, simply setting up the infrastructure to supply and build $350 billion worth of hybrids would probably cost more than $350 billion in and of itself.
Plus, in the interim, you'd still have to spend the same $350 billion per year buying all that foreign oil. Even worse, the legacy effects of the guzzlers built during the 'great hybrid buildout'
would last decades after you started building nothing but hybrids and EVs.
Ultimately, America is banking on amazing and unknown technological breakthroughs to save us from reality. I hope it happens, but the pragmatic use of even today's technologies offer the potential to end foreign oil dependence, while cleaning the environment in the interim to better technologies.
Instead, we're staying dependent on foreign oil until a cheaper more comfortable solution comes along. To me that seems akin to the smoker who continues to smoke until some miracle drug cures him of his addiction without any effort on his part.
You just have to hope the miracle comes before death.
Perhaps that's the point of your tricky questions? If we weren't transferring all that money out of country, and kept it in country, we'd have much more money to develop cleaner and greener real world solutions for ending foreign oil dependence and reducing emissions?
Is it a trick question - well not really. The trick if there was one [which there wasn't] would be to do as you did - considering things like the build out of factories. However that was not the purpose of the post. My intention was for it to be a simple division problem.
Also I wanted to generate discussion [which failed] and to demonstrate the size of the problem we face trying to become energy independent. It is literally impossible for us to drill our way to energy independence. We are currently importing oil from about 45 different countries including OPEC and non-OPEC nations. As a country; we can't possibly drill as many oil wells as those 45 other countries can. In fact we don't even have enough equipment [nor can we build it] to drill that many wells. We are sincerely between a rock and a hard place so to speak.
Hundreds of billions are sometimes difficult for people to get their heads around. Using a simple illustration helps sometimes don't you think?
It's no different than the gas tax I usually propose or the amount of solar we need to become energy independent. Adding $1.00 in gas taxes is how much more in percent than the current .18 cents? Another example - adding $1.00/gallon of tax to gasoline raises about $13,650,000,000. If we used that 13.6 billion to build hybrids and then GAVE THEM AWAY [assuming we could build them] how many years would it be before everyone who wanted one had a free hybrid?
Very large numbers are difficult for people to understand huh? Anyway it was a fun post even thou it got zero responses. Hope you see this because the topic is about to drop off the list.
Tom G.
Well, I couldn't agree more about the size of this problem, and in no way am I suggesting that we drill our way out of this, or even try to.
Obviously, it seems natural gas drilling could provide a nice chunk of energy, cost-effectively, without increasing emissions. I can live with that.
Likewise, while I hate the idea of new oil drilling, it could be a tool for an effective compromise that puts forth a plan that can end foreign oil dependence in say, 20 years.
And that's ultimately my point about new drilling. In order to get the "drill, baby, drill" folks on board with a gas tax, with a higher CAFE requirements, hybrid tax credits, etc. those of us against drilling will undoubtedly have to compromise.
Great businesses don't usually achieve greatness by being able to react quickly to market conditions. Instead, they forecast 5, 10 or 20 years ahead. They try to lead the market.
To think America can recoup greatness by simply reacting to the world's energy markets, it seems to me, guarantees America's greatest moments have already happened, as greatness requires great vision and a pragmatic plan to achieve that vision.
To some extent we have the vision, but our current plans for achieving the vision are just shy off useless and almost completely irrelevant.
Your response to my post is right on target. For example, I sell solar electric systems on a part time basis to keep me out of the bar's and off the streets, LOL. But the current government solar incentive program is flawed and here is why.
Currently many utilities offer some type of rebate or incentive to people who install solar which is fine. We subsidize utilities, car companies, coal companies, oil companies, literally hundreds of businesses.
If you happen to be a business and you buy a solar electric system you can receive a 30% tax credit OR a cash grant. A business has the choice of receiving the credit over as many years as necessary to fully use the credit or 6 years. They can also get a cash grant for the full amount in the current taxable year.
However, if you are an individual homeowner the legislation only allows you to take the tax credit and NOT the cash grant. Therefor if you happen to be retired, live on Soc. Sec. plus a small income from say an IRA or pension fund you can't collect the 30& tax GRANT - you can only claim the tax credit. This in almost every case makes solar too expensive for a large segment of our population. Every wonder why the tax laws were written like this?
And here is where we are in total agreement. When I retired I did consulting in strategic planning for several years. Most businesses have as you suggested at least a 5 year plan and many have 10 and 15 year plans.
Our government on the other hand seems to work on the election to election plan if you can even call that a plan. That amounts to at best a two year plan.
When we entered WWII we made a commitment to build 100's of ships to support the war effort and we did. We stopped building cars and manufactured ships, jeeps, airplanes and all kinds of war stuff. Try to do that today in our PC environment and well you get the point.
So here we are facing what I believe is going to be a huge problem for our country and we don't have a clue. We have little pieces here and there, a little solar incentive, a little nuclear incentive, a little research, and on and on.
What we don't have is a plan and dare I say - I don't even know of a single politician who could do a plan. Maybe Newt Gingrich could? What say you?
Stepping down from my soapbox now.
Tom G.
"Every wonder why the tax laws were written like this?"
Sad that that's a rhetorical question.
But you're right, a huge part of the problem is this endless campaigning, which forces the political system to be so focused on the short term. Couple that with the money needed to campaign, and there is no longer any reason to wonder why tax codes are written the way they are.
Ultimately, I come to exactly the same conclusion as you, "here we are facing ..... a huge problem for our country and we don't have a clue."
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