Drilling – Fool's Gold
East County Californian (2008-09-11) Raymond Lutz
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By Ray Lutz
High energy prices hurt our economy. Not only do we pay through the nose at the pump, we pay through the gun-barrel in our overseas military misadventures, mainly linked to the vast pool of oil under Iraq.
We hear that “drill, drill, drill” is the answer. Drill on our sensitive coastline and in the Alaska National Wildlife Refuge (ANWR). Although drilling should be part of the discussion, it's not the singular or best solution. The reality is that oil companies are sitting on 68 million acres of leases that they aren't drilling already, and there is far more already designated for future leasing without despoiling our coasts.
Perhaps most significantly, drilling is not a short-term solution. The delay between granting a lease and getting oil to flow is on the order of about ten years, and then it takes time to pump the oil out. If ANWR were opened up today, it would provide oil from 2018 to 2030, and it would reduce oil imports by about two percent at the peak. If we are lucky, we might see $4/gallon gas drop to $3.92 in 2020.
That is, if the price would drop at all. You see, the price of gasoline is more dependent on market speculation than the actual cost of crude. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs. Just watch the price drop at every general election, and then shoot back up afterwards. These price changes have nothing at all to do with the availability of oil or whether we drill in ANWR.
Oilman T. Boone Pickens agrees with the Sierra Club, and when that happens you should take notice. We can’t drill ourselves out of this problem. A multi-directional attack is a must. We can push to develop solar, wind, renewable fuels, and clean fuel from our vast coal reserves. All these are important, but they do not include the most effective way to reduce our dependence on imported oil.
The short-term answer is simple. Not using a barrel of oil is far better than drilling it and then wasting it. It’s somewhat of an embarrassing fact that the fuel efficiency of our fleet of cars and light trucks is at a 21-year low.
Obviously, we can do better. If we improve our fleet efficiency from 24 mpg back to 26 mpg, what we did in 1988, that would cover all the oil we could drill in ANWR. We can quickly deploy “mild-hybrids” -- those that simply stop idling when the vehicle is stopped – and reduce our consumption to drastically affect the market and reduce imports as well. There is no reason to keep them idling at every traffic signal, stop sign, and on every gridlocked freeway.
Cars and light trucks account for 40 percent of U.S oil use. Raising fuel economy standards for new cars, SUVs and other light trucks to an average of 40 mpg over the next 10 years will save more oil than current imports from the Persian Gulf and the projected yield from ANWR, combined. That’s energy independence that is feasible, and it can happen long before drilling even starts to provide a drop of new oil.
We’ve been through an era when it was stylish to have the largest and most wasteful vehicle, and we’re now paying for it. Electric cars -- like the EV-1 – were available but crushed by GM because they were too efficient (60 cents per gallon equivalent) and tune-ups amount to adding window washer fluid. Now, we have a fleet of vehicles that are highly profitable for the auto and oil industry, but optimizing industry profit, once again, does not optimize national security, national resources, or economic stability.
Drill, drill, drill is a false solution. Don’t be fooled again.
Ray Lutz is a candidate for the 77th State Assembly District.