Distraction, Misleading Energy Claims, and the Washington Post

The Washington Post just ran an editorial highlighting an ad the NRDC Action Fund printed in the paper. The ad, which featured a drawing of President Bush holding a bottle of elixir, said the claim that offshore drilling will drive down gas prices is "100% Snake Oil."

The Post agreed with the NRDC Action Fund that more offshore drilling will not impact the price of gasoline today because it will take years to get to the pump. But, the editorial continued, "There are three 'truths' masquerading as fact among drilling opponents that need to be challenged."

We need to keep the energy debate grounded in fact, not fiction, so I appreciate the paper's effort to examine these assertions. Still, I stand by the ad's figures and explain why below.

Before I do, I want to say that there is one critical area where the Post and NRDC agree wholeheartedly. The editorial says, "The strongest argument against drilling is that it could distract the country from a pursuit of alternative sources of energy."

I couldn't have said it better myself. The argument that drilling is a distraction is not just theorizing; it is real. All of the attention on drilling has:

Distracted Congress from even CONSIDERING a bipartisan tax incentive for home retrofits that could produce more oil sooner than offshore drilling and that would reduce energy costs to consumers.

Diverted Congress from extending the clean energy tax incentives for both efficiency and renewables that could produce more than 10 times as much energy as the Arctic National Wildlife Refuge just in the form of gas savings from efficiency in buildings.

Prompted representatives engaged in the pro-drilling political theater now occurring in the closed House chamber to vote against clean energy 93 percent of the time during this Congress.

This is actually what is happening as a result of the politics of drilling.

Now, on to why I think the Post's facts aren't quite right.

1. Even with More Barrels, We Will Never Have a Big Piece of the Pie
The Post says it is erroneous to claim that America has only 3 percent of the world's oil reserves, because new technology estimates there could be more barrels of oil under the sea than previously thought. I don't dispute that. But:

Even if we add twenty or thirty billion more barrels into the mix, we will only increase our share by a few percentage points, so maybe our total share would be 4 percent, maybe 5 percent. That still doesn't make us a player in the global oil market.

China and India's rising demand will quickly dwarf any significance our tiny percentage increase may garner.

We can have a much bigger impact on the global market by reducing our demand through efficiency. Just look at the past few weeks. Oil prices have dropped because our nation has been conserving.

2. You Can't Argue with Numbers: 7,740 Active Leases, Only 1,655 in Production
The Post disagrees with the assertion that oil companies are failing to develop a large portion of the leases they already have. The paper cites as an example five Shell leases that are not classified as active, but where the company has been in fact laying the ground work for drilling.

But can the paper verify the same is true for the rest? There are 7,740 active leases on the Outer Continental Shelf, and only 1,655 of them are in production.

And what if we turn the question around? A full 80 percent of all offshore drilling areas are open to development. Why don't companies exhaust those before asking for the remaining 20 percent?

Instead of favoring exploration, the so-called Big Five oil companies-- BP, Chevron, ConocoPhillips Company, ExxonMobil, and Royal Dutch Shell--have spent 56 percent of their soaring operating cash flows on share repurchases and dividends. Despite declining production rates, these stock buy backs roughly exceed $200 billion over the past five years.

3. The Cleanest Form of Energy Is the One You Don't Use
The Post reminds us that the technology for preventing oil spills has improved over the past decade. I agree, but large oil spills still occur.

From 1985 to 2005, there were 187 large oil spills on the Outer Continental Shelf, each one emitting more than 2,100 gallons into the Gulf of Mexico.

Katrina and Rita alone dumped an amazing 685,000 gallons of oil, contrary to misleading industry claims.

The paper also says that no form of energy is perfect or without trade-offs. But that doesn't mean the trade-offs are of equal weight.

Which would you choose: seeing offshore wind farms on the horizon from your canoe or being unable to canoe because a recent oil spill fouled the waters?

There is a pollution-free alternative: efficiency. Analysis by the Department of Transportation shows that new vehicles could be averaging 40 percent higher fuel economy by 2015 using off-the-shelf, cost-effective technologies.

This post originally appeared on Switchboard.

Comments

[NL207]

"more offshore drilling will not impact the price of gasoline today because it will take years to get to the pump"

The time from commencement of drilling to completion of a well is dependent on the depth of the well. The time from completion of the well until first delivery of mechantable oil is only a few days and almost never more than 21 days..

"Even if we add twenty or thirty billion more barrels into the mix, we will only increase our share by a few percentage points, so maybe our total share would be 4 percent, maybe 5 percent. That still doesn't make us a player in the global oil market"

We aren't talking 20 or 30 B bbls. We are talking 800 or 900 B bbls, because one of the reources in question for new drilling is oil shale. How many countries presently represent more than 5% of proven reserves? Exactly 8. http://www.nationmaster.com/red/pie/ene_oil_res-energy-oil-reserves Expand proven US reserves to their full potential and that number drops to 5, and the US holds about 35% of the total, making it No 1 and by a wide margin. So what is this about not being a player?


"Why don't companies exhaust those before asking for the remaining 20 percent?"

Most of the unworked parcels do not contain economic deposits of oil. What is in place is not worth the present cost of recovery at the present price.

[research]

Oil shale is BS.

The Oil companies haven;t even requested permits for exploratory drill, so they don't know what they have.

[sheila]

"The paper also says that no form of energy is perfect or without trade-offs. But that doesn't mean the trade-offs are of equal weight."

Wow, i sure hope this quote gets to Johanna Wald before she sells out our entire wilderness here in CA for incredibly wasteful, destructive, unneeded giant "renewable" (ha!) power plants and thousands of miles of new powerlines!!! It has been mind-boggling to watch her and Carl Zichella and their cronies in RETI intentionally divert attention and resources from the ONLY sustainable prospects of conservation and point of use renewables (including oversized systems), towards Total Desert Death.

thank you for making this incredibly important point - the tradeoff of destroying our fragile, intact ecosystems for LESS efficient Big Energy Monopolies is ABSOLUTELY UNACCEPTABLE. Even the utility journals are proving that CSP (solar) power plants use WAY more land than PV, use billions of gallons of water, are unreliable, leaky, poisonous and inefficient.

The BLM has recently determined that BUILDING AND MAINTAINING A NEW POWERLINE, even if they link to so-called "renewable" power, will emit so many GHGs over its 40-year life, that it is too environmentally harmful to be allowed, and that point of use with no new transmission is the only solution.

so why would Johanna Wald enable the siting of thousands of miles of powerlines which will doom us all while also killing off our gorgeous natural habitats, and claiming to save the planet?

[mjt218]

Great post . . . I'll only disagree on one point.

The Gang of Ten proposal uses additional drilling as a carrot to bring the Republicans into the mix to spur alternative energy investment. The Republicans are playing a distraction campaign, but they do answer to consituents that would be glad to see more drilling. A compromise to move the issue forward despite the small distraction is probably a net gain for alternatives (subsidy repeal and redistribution, tie royalties to alternative subsidies).

Also, the unused lease block issue, is being used as a distraction by the Democrats to advance their own interests (both parties employ the distraction technique). While the Post did not examine every lease block, I would postulate that most fall into line with the example Shell leases mentioned.

[Egalitare]

THIS ENTIRE DEBATE is a sham. The ban on oil exploration is due to expire on September 30. If Congress does NOTHING, the leases that Big Oil claims are vital are theirs for the taking (literally, given the lack of royalty payments collected for these leases).

The Democrats will of course feel pressure from their constituents during this recess to allow drilling somewhere (and counter-pressure from folks like me to resist that impulse), and the compromise will include mostly deep water sites in the Gulf -- right where Big Oil suggests some big finds MIGHT be.

The real deal is that the more "potential reserves" Big Oil can claim, the higher their stock values.

[ScooterLiddy]

Excellent. And here is where we are headed if we don't act responsibly: http://www.peakoilassociates.com/PeakOilAnalysisOctober6-2007.pdf

[NL207]

These Peak Oil clowns are just more doomsayers.

Some choice quotes from your source: "will result in global economic collapse and population decline"
"Multiple crises will cripple the nation in a gridlock of ever-worsening problem"
"economically recoverable reserves of oil and natural gas will be exhausted, resulting in global economic collapse and population decline"

Of course, these authors call for immediate government intervention.

These guys will never get it. Further Government meddling will only produce more unintended negative consequences just as the Government's present, ill-conceived biofuels policies have and without solving this energy problems.

High prices for fossil fuels will drive markets to find cost effective alternatives. Government force will only be used to line the pockets of influential interests without regard to the ultimate consequences of the policies imposed.

[WASanford]

Wait a minute, wait a minute; wait a GD minute!
What government meddling caused the housing bubble? or was it a lack of responsible government oversight?
What government meddling can you point to that is causing global warming? or is it ditto above?
Capitalism is approaching its total melt-down phase, all without government meddling.

It is true that this government has put us in under a tremendous debt, but these are your guys aren't they? no regulation, no over-site, no accountability? no anything? And we appear to be headed towards a depression even as we argue whether or not we're in a recession. In what sense is capitalism actually working for us? Oh, yes, The guys at the very top are getting rich while the rest of us suffer. What a wonderful idea that is!

[research]

if you live in AZ CA CN MN CO Mo NY OR TX,

Installed Solar power is FREE

http://www.power-savetv.com/incentives.html

I cannot vouch for this company, I know only what I have read on their web site.

[NL207]

Minnesota, New York and Connecticut do not have a sufficient fraction of sunny days and are too far from the equator to justify the cost of a home PV cell installation. No sane homeower would choose to do this of his own volition at current prices. This is just another government boondoggle.

[research]

"FREE."

look it up in the dictionary.