THE BLAME GAME

WOOD TV8 has been running an ad promoting a segment it is going to run on this evening's newscast.  The segment's intrepid reporter is going to ferret who's to blame for rising gasoline prices.  My first reaction was, "What nonsense!"  After all, the law of supply and demand provides most of the explanation.  There's no one to "blame" in that regard.

Then an article headlined "Ehlers lauded as green giant" in the Monday edition of the Grand Rapids Press caught my eye.  River City's member of Congress, Vern Ehlers, was awarded the Helen & William Milliken Distinguished Service Award by the Michigan Environmental Council.*  One of the reasons Ehlers got this distinction is his solid opposition to drilling for oil in that frozen wasteland otherwise known as the Arctic National Wildfire Refuge.

So we can blame Ehlers for helping to create the shortage in oil supply that has driven a barrel of crude to sky-high prices.  Don't bet on the newsmen at WOOD TV8 figuring that out when it comes to pointing fingers.

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* You might remember the Michigan Environmental Council.  These fearless defenders of the environment stayed low in the weeds when we asked for their help in presenting to state officials the evidence of how the Berkey & Gay developers obstructed the MDEQ's investigation of illegal dumping at the old Monroe Avenue water filtration plant with false affidavits and phony soil tests.  But let's not beat up on the MEC too much.  All of the environmentalist groups that constantly beg for donations from you turned their back on the biggest dumping scandal in River City history because of the powerful players in involved.

Comments

[Steve Goulet]

Don't blame Vern, either. Here is the DOE analysis of ANWR: http://www.eia.doe.gov/oiaf/servicerpt/ogp/methodology.html

It would take 7 to 12 years to get it going. I don't think anyone was suggesting we drill there 7 years ago. And production from ANWR would most likely peak at about 876,000 barrels per day in 2024.

That won't even make up for the lost production of all the other wells in the US that saw their production peak in the 1970s:

http://www.eia.doe.gov/oiaf/servicerpt/ogp/fig_2.html

And it would hardly make a dent in the world oil market, where daily consumption of oil has reached 83 million barrels per day. By 2013 we'll be way over that number, and the wells in Alaska will be probably be running dry when we need them most as we approach mid-century and the risk of peak oil.

Every little bit helps, that's for sure. But ANWR is just that -- a little bit.

[The Executive Director]

Hi, Steve.

Your point is well-taken. However, the ban on drilling in ANWR has been in place for many years and production may have been already underway except for the successful opposition to it by politicians like Ehlers.

You are also correct that ANWR oil wouldn't flood the market. However, the estimated reserve is large enough to replace what the U.S. purchases from the Saudis for thirty years.

Finally, my jab at Ehlers is tongue-in-cheek. The demand for oil will remain strong enough for many new fields throughout the world to go into production over the next several decades, therefore, the oil that could be pumped from ANWR and the continental shelves of the U.S. probably won't be missed in the end. Just the modernization of the oil fields in western Siberian will saturate the market in the near future, and there's a whole lot more elsewhere. And who knows what technology may be able to do in twenty or thirty to yield cost-effective petroleum from Albertan tar sands and Rocky Mountain shale oil.

Bottom line, I'm not pessimistic about the current oil crunch, and I think looking to blame someone for it is misguided.

Regards,
Bill

[Steve Goulet]

I don't feel so comfortable with the future of oil supply and demand. There are many repectable analysts (like this one: http://en.wikipedia.org/wiki/Matthew_Simmons) who are predicting big problems.

Did you know that there is more energy in a pound of Captain Crunch than there is in pound of Oil Shale? Many geologists in the industry refer to it as "the fools gold of the oil industry". Needless to say, it would be a bad idea to stake our future on the possibility of oil shale as a cheap alternative to crude oil.

[The Executive Director]

Steve,

I remember back in the 'Seventies how all the so-called experts proved that we would run out of oil by 2000. They had the data from the oil companies themselves that there were only thirty years of proven reserves. Of course, what eludes these doom mongers (then and now) is that there is almost no value for an oil company to look for reserves beyond a horizon of a few decades. So what's on the books is not all the oil that is left, but only the proven amount of oil that has been found so far.

As for the Captain Crunch/oil shale comparison, apples and oranges. Captain Crunch is a fully processed product unlike a pile of shale. Of course none of the rock in oil shale will yield any energy, just as most of the corn stalks and sugar beets, from which the corn meal and granulated sugar come that go into Captain Crunch, yield any nutrition for humans.

And who said shale oil would be a cheap alternative to crude? If demand keeps up and crude supplies don't, it will then pay to extract petroleum from shale oil and tar sands, the reserves for which are huge. That may mean a gallon of gasoline remains pricey, but we won't run out in the foreseeable future.

Regards, Bill