On the web since 1997
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On the web since 1997 |
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Drill America Part IILuke Hodgens / Powerhouse Profits -- The United States consumed an average of roughly 20 million barrels of oil per day in 2003. 45% of which was consumed as gasoline. Total petroleum demand for 2004 is expected to grow by nearly a half a million barrels per day, or 2.1%. A growing economy demands energy. But, unfortunately, most of that fuel comes from abroad.In 2003, America consumed an estimated 12.2 million barrels per day of imported oil. That's roughly 62% of our daily oil demand. More than 2/5 of this oil came from OPEC nations. 1/5 of this supply came from Middle East countries. While the largest volume of imports comes from Canada, Saudi Arabia, Mexico and Venezuela, Russia and Nigeria are near the top of the list. With every barrel of imported oil, we experience the havoc of the nations from which we import. Do we have to import oil from these nations? Well, yes. Our demand greatly outstrips our production. The US produces less than 40% or our oil needs. The major import nations are providing us with much more than just political headaches. Nations like Saudi Arabia and Iraq have become quite rich on American money. Worldwide terrorist operations are heavily funded by rich Arabs, many of whom became rich on American oil needs. A percentage of every dollar spent on gasoline goes directly to these rich Arab fund raisers - and some of this goes into terrorist pockets. Demand Snafu American politicians have been hammering home the need to lessen our reliance on foreign oil. But, how could we do this? We can either decrease our demand or increase our domestic supply. The popular solution today is to reduce demand - but how? The US Department of Energy states that between 1985 and 2002, domestic oil production fell by about 36%. Conversely, the use of petroleum products has risen almost 27%. That's an enormous gap between production and demand. The vast majority of petroleum consumption stems from the needs of transportation. In 2002, transportation was responsible for 68% of petroleum use. This number is growing. By 2020, an additional 7 to 8 million barrels of oil will need to be imported to bridge the growing gap. How can we keep up with this growing demand without importing? Hybrid cars, fuel cells, more efficient vehicles - all super ideas, but not very practical. It will take many years before fuel cell technology is advanced, and safe enough to implement into automobiles. Hybrid vehicles do work but are not the demand end-all. While they do increase gas mileage, they are no where near 100 miles per gallon and will likely never be. These "solutions" are merely political talking points designed to show Americans that our trusted politicians are looking out for us. Development of an efficient, safe fuel cell would not solve my cars fossil fuel needs - it runs on gasoline. Perhaps in a decade or so, a gradual switch could occur, but no real dent in demand will. Consumers can choose to buy a new $20,000 hybrid automobile to cut their gasoline expenses by 10 or 20%, or, they can continue to drive their traditional combustion engine autos. Unfortunately, not too many of us can afford to spend tens of thousands of dollars on "greener" cars, so demand will not slow in this arena. Government can throw billions of dollars towards the development of alternative fuels, yet demand will continue to rise. We will have a huge problem in the future - but, don't forget, we have this problem today. Bring In The Reserves As of January 1, 2004, the Unites States has an estimated 22.7 billion barrels of proven oil reserves - eleventh highest in the world. The concentration of oil fields is heaviest in Texas, Alaska, Louisiana and California. During 2003, the US produced about 7.9 million barrels of oil per day with a consumption rate of about 20 million barrels a day. The proven reserves in the US could provide us with 31 years of oil at 20 million barrels per day - with zero importation! If fuel cell technology is perfected and widely implemented within 10 to 15 years, we could stretch our own reserves perhaps 50 to 100 years - during which time alternative fuels would be perfected. Since 1985, US oil production has dropped 25% while demand has risen. American crude production is now at 50 year lows. Production in the lower 48 states is expected to decrease by 120,000 barrels per day this year further widening the supply/demand gap. We are in an energy crisis - politically. We know where the oil is - but we're handcuffed by "environmentalists" and the politicians on their doles. Seward's Folly In 1867, Secretary of State, William Seward, authorized the purchase of Alaska from the Russians for a mere $7.2 million. The purchase was approved by the Senate by just one vote. At the time, most Americans felt the frozen tundra of Alaska was a useless wasteland. Seward was seen as a fool for purchasing a giant block of ice and the transaction soon became known as Seward's Folly. At the time, the purchase was viewed by Seward as a strategic expansionary move. Seward saw the potential of the vast land and made his move. One heck of an investment! Today, Alaska is one of the world's most resourceful lands - timber, precious metals, minerals and ... oil! Most of Alaska's oil output comes from the Prudhoe Bay Field and is transported south via the Alyeska pipeline. The vast wasteland that is Alaska is now viewed as one of the world's richest oil lands. Although Seward's Folly can now be viewed as Seward's masterpiece, a small minority refuses to allow parts of Alaska to be fully employed. "A Short Term Solution - With Lasting Effects" In 2000, Congress requested a report on potential oil reserves and production possibilities from the Arctic National Wildlife Refuge (ANWR). The report cited a 1998 US Geological Survey study of ANWR showed that there are 10.3 billion barrels of recoverable oil in the region. Drilling ANWR could produce upwards of 1.3 million barrels per day. At that rate, ANWR could provide almost 22 years of oil cutting demand for imports by 6.5%. Doubling the output to 2.6 million barrels - quite possible - could cut imports by 13%. That's 13% less of a headache from the Middle East, Russia, Africa and South America. If congress opened ANWR for drilling an immediate impact would be made on the oil market sending prices down below $30 per barrel and gasoline prices well under $1.40 per gallon - perhaps much lower. Of course this is speculation, and it would take several years for that oil to come online, but the immediate effects of even allowing for drilling would send shock waves through OPEC. Alaska Governor Frank H. Murkowski announced in late March that the state will allow drilling in the offshore region outside of ANWR - a huge step in the right direction. Unfortunately, the governor does not have domain over on shore ANWR, a land he governs - the federal government does. From the governor's statement: "The new areas to be offered for lease, exploration, and development are 670,000 acres of land off the coast of the NPR-A and more than 350,000 acres off the coast of ANWR. Toward that end, I have directed my Commissioner of Natural Resources, Tom Irwin, to open an immediate dialog with the residents of the North Slope. While the US House and Senate remain grid-locked over opening ANWR for oil development, I am not burdened with that process. Residents of Alaska and the North Slope are unified in their support for the opening of ANWR. Initial contacts with officials of the North Slope have been made. It would be my intention to include the state offshore ANWR tracts in our October 2004 Beaufort Sea Area Wide lease sale. America should not be held hostage by Middle-East oil imports. Motorists should not have to pay more than $2 for a gallon of gasoline. Alaska oil, Alaska natural gas, can help balance the equation." American Democracy Drill America! Luke Hodgens is the editor of |
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