View Full Version : A new route for Keystone XL as American energy production surges
04-17-2012, 02:35 PM
A new route for Keystone XL as American energy production surges
Posted April 16, 2012
It looks like a new route for Keystone XL, one that has a better chance of being approved, is closer to release. Energy Citizens everywhere are eager for the pipeline project to get underway, knowing it to be an important part of a new energy strategy – a commonsense solution - that has the United States looking more to homegrown resources and less to overseas oil states.
Here are two more articles worth reading that underline the value of a pro-North American energy strategy. The first, from the Wall Street Journal, tells of the energy boom going on in the U.S. courtesy of high-tech production techniques like hydraulic fracturing. For the first time in decades, we are heading toward a reassertion of our energy independence.
Next is a spot-on editorial that urges policymakers to tap energy stored in the Canadian oil sands, the Gulf of Mexico and continental oil shale reserves. It states that these resources could double North American natural gas and oil production within a decade, radically affecting our foreign policy, and helping to lower petroleum prices worldwide.
There is no question that we have the opportunity to reinvent American energy strategy in the coming years. All it will take is political leadership courageous enough to do it.
04-17-2012, 02:37 PM
New route planned for Keystone XL
by Chris Wagner
Story Created: Apr 1, 2012 at 11:04 PM CDT
Story Updated: Apr 2, 2012 at 12:21 PM CDT
President Obama seems to be for it. Governor Heineman is definitely all for it. Now it looks like the Keystone XL pipeline is one step closer to becoming a reality as TransCanada has decided on a new route around the Sandhills.
Only they're not saying where that route would be.
A company spokesman says TransCanada has a rough corridor for a prospective pipeline.
It's being said that the route will be unveiled during public hearings set up by the Department of Environmental Quality.
That's if a state review is allowed to continue.
A bill that would make that happen has earned first round approval in the state legislature.
Opponents of the pipeline believe TransCanada is attempting to get landowner support before revealing the route.
04-17-2012, 02:38 PM
Keystone XL pipeline common-sense solution
Ralph Christie Jr. National chairman, Environment & Energy Committee, American Council of Engineering Companies, and chairman and CEO, Merrick & Company | Posted: Saturday, March 31, 2012 6:30 am
Since President Richard Nixon, there have been discussions by eight administrations of the need for a national energy policy and more domestic production of energy. Now is the time.
The much-discussed Keystone XL pipeline, an approximately $7 billion project that complements the original Keystone Pipeline and nearly doubles the size and capacity of the system with an expansion to the Gulf Coast, has been in planning since 2008. Questions on routing of the line and environmental protection will be answered by the appropriate federal and state agencies. This additional energy source from our NAFTA neighbor should be built.
One of the key objectives to securing the nation’s long-term economic security is the need to expand our access to safe, secure and sustainable sources of energy. As long as the U.S. and the rest of the world’s leading economies continue to derive a significant portion of their energy needs from hostile governments in unstable regions of the world, it affects our security.
To enhance our energy security and develop more reliable and stable long-term energy sources, it is absolutely essential that the U.S. pursue every avenue possible toward achieving a greater degree and balance of energy self-sufficiency, ranging from innovative alternative/renewable energy sources — such as wind and solar — to natural gas and the traditional energy sources that are currently available. Building the Keystone XL Pipeline should be a part of this national energy strategy.
As the CEO of an engineering firm that routinely provides technical, environmental and economical solutions to fuel and power suppliers, I believe this is a critical time for our country to increase its energy security and reliability through creative and balanced solutions. I also chair the national Environment & Energy Committee of the American Council of Engineering Companies (ACEC) — the trade association of the nation’s engineering industry — made up of leading environmental and energy-focused engineering firms that work every day to protect our water resources, air quality, clean up hazardous waste sites and develop clean, safe and reliable energy sources. ACEC represents over 5,000 companies across this country.
For engineering professionals on the front lines, building the Keystone XL Pipeline, which will link new sources of oil in Canada to refineries in the Midwest and Texas, is a “no brainer” and an essential step to achieving a more stable energy supply. Canada remains the largest supplier of imported oil and natural gas to the United States. According to a report for the U.S. Department of Energy (Ensys 2010), U.S. refining and import of Canadian crude will more than double in the next two decades.
At a time of unrest and uncertainty in other energy producing countries around the world, Canada’s vast energy reserves are more important to the future of U.S. energy security than ever before. The pipeline will help to address our energy needs over the long term, and will also create significant job growth at a time when we need them most. This project is expected to create over 20,000 high-paying jobs initially, and support many more jobs in the long run.
The president’s decision to delay this project is disappointing. There’s really no technical reason or concern associated with the project that we cannot address.
This is what good engineers do every day — we design and help to build infrastructure in a way that protects human health, safety and the environment.
The president needs to work with Congress and allow this common-sense project to move forward.
Read more: http://rapidcityjournal.com/news/opinion/forum-keystone-xl-pipeline-common-sense-solution/article_3eaaec7a-7abb-11e1-9544-0019bb2963f4.html#ixzz1sKtz8Pm4
04-17-2012, 02:40 PM
U.S. Inches Toward Goal of Energy Independence
Jim Wilson/The New York Times
An Apache Corporation well near Hobbs, N.M. Apache is drilling in the Permian Basin, an oil field once thought played out. More Photos »
By CLIFFORD KRAUSS and ERIC LIPTON
Published: March 22, 2012
MIDLAND, Tex. — The desolate stretch of West Texas desert known as the Permian Basin is still the lonely domain of scurrying roadrunners by day and howling coyotes by night. But the roar of scores of new oil rigs and the distinctive acrid fumes of drilling equipment are unmistakable signs that crude is gushing again.
And not just here. Across the country, the oil and gas industry is vastly increasing production, reversing two decades of decline. Using new technology and spurred by rising oil prices since the mid-2000s, the industry is extracting millions of barrels more a week, from the deepest waters of the Gulf of Mexico to the prairies of North Dakota.
At the same time, Americans are pumping significantly less gasoline. While that is partly a result of the recession and higher gasoline prices, people are also driving fewer miles and replacing older cars with more fuel-efficient vehicles at a greater clip, federal data show.
Taken together, the increasing production and declining consumption have unexpectedly brought the United States markedly closer to a goal that has tantalized presidents since Richard Nixon: independence from foreign energy sources, a milestone that could reconfigure American foreign policy, the economy and more. In 2011, the country imported just 45 percent of the liquid fuels it used, down from a record high of 60 percent in 2005.
“There is no question that many national security policy makers will believe they have much more flexibility and will think about the world differently if the United States is importing a lot less oil,” said Michael A. Levi, an energy and environmental senior fellow at the Council on Foreign Relations. “For decades, consumption rose, production fell and imports increased, and now every one of those trends is going the other way.”
How the country made this turnabout is a story of industry-friendly policies started by President Bush and largely continued by President Obama — many over the objections of environmental advocates — as well as technological advances that have allowed the extraction of oil and gas once considered too difficult and too expensive to reach. But mainly it is a story of the complex economics of energy, which sometimes seems to operate by its own rules of supply and demand.
With gasoline prices now approaching record highs and politicians mud-wrestling about the causes and solutions, the effects of the longer-term rise in production can be difficult to see.
Simple economics suggests that if the nation is producing more energy, prices should be falling. But crude oil — and gasoline and diesel made from it — are global commodities whose prices are affected by factors around the world. Supply disruptions in Africa, the political standoff with Iran and rising demand from a recovering world economy all are contributing to the current spike in global oil prices, offsetting the impact of the increased domestic supply.
But the domestic trends are unmistakable. Not only has the United States reduced oil imports from members of the Organization of the Petroleum Exporting Countries by more than 20 percent in the last three years, it has become a net exporter of refined petroleum products like gasoline for the first time since the Truman presidency. The natural gas industry, which less than a decade ago feared running out of domestic gas, is suddenly dealing with a glut so vast that import facilities are applying for licenses to export gas to Europe and Asia.
National oil production, which declined steadily to 4.95 million barrels a day in 2008 from 9.6 million in 1970, has risen over the last four years to nearly 5.7 million barrels a day. The Energy Department projects that daily output could reach nearly seven million barrels by 2020. Some experts think it could eventually hit 10 million barrels — which would put the United States in the same league as Saudi Arabia.
This surge is hardly without consequences. Some areas of intense drilling activity, including northeastern Utah and central Wyoming, have experienced air quality problems. The drilling technique called hydraulic fracturing, or fracking, which uses highly pressurized water, sand and chemical lubricants that help force more oil and gas from rock formations, has also been blamed for wastewater problems. Wildlife experts also warn that expanded drilling is threatening habitats of rare or endangered species.
Greater energy independence is “a prize that has long been eyed by oil insiders and policy strategists that can bring many economic and national security benefits,” said Jay Hakes, a senior official at the Energy Department during the Clinton administration. “But we will have to work through the environmental issues, which are a definite challenge.”
The increased production of fossil fuels is a far cry from the energy plans President Obama articulated as a candidate in 2008. Then, he promoted policies to help combat global warming, including vast investments in renewable energy and a cap-and-trade system for carbon emissions that would have discouraged the use of fossil fuels.
More recently, with gasoline prices rising and another election looming, Mr. Obama has struck a different chord. He has opened new federal lands and waters to drilling, trumpeted increases in oil and gas production and de-emphasized the challenges of climate change. On Thursday, he said he supported expedited construction of the southern portion of the proposed Keystone XL oil pipeline from Canada.
04-17-2012, 02:43 PM
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Mr. Obama’s current policy has alarmed many environmental advocates who say he has failed to adequately address the environmental threats of expanded drilling and the use of fossil fuels. He also has not silenced critics, including Republicans and oil executives, who accuse him of preventing drilling on millions of acres off the Atlantic and Pacific Coasts and on federal land, unduly delaying the decision on the full Keystone project and diverting scarce federal resources to pie-in-the-sky alternative energy programs.
Just as the production increase was largely driven by rising oil prices, the trend could reverse if the global economy were to slow. Even so, much of the industry is thrilled at the prospects.
“To not be concerned with where our oil is going to come from is probably the biggest home run for the country in a hundred years,” said Scott D. Sheffield, chief executive of Pioneer Natural Resources, which is operating in West Texas. “It sort of reminds me of the industrial revolution in coal, which allowed us to have some of the cheapest energy in the world and drove our economy in the late 1800s and 1900s.”
The Foundation Is Laid
For as long as roughnecks have worked the Permian Basin — made famous during World War II as the fuel pump that powered the Allies — they have mostly focused on relatively shallow zones of easily accessible, oil-soaked sandstone and silt. But after 80 years of pumping, those regions were running dry.
So in 2003, Jim Henry, a West Texas oilman, tried a bold experiment. Borrowing an idea from a fellow engineer, his team at Henry Petroleum drilled deep into a hard limestone formation using a refinement of fracking. By blasting millions of gallons of water into the limestone, they created tiny fissures that allowed oil to break free, a technique that had previously been successful in extracting gas from shale.
The test produced 150 barrels of oil a day, three times more than normal. “We knew we had the biggest discovery in over 50 years in the Permian Basin,” Mr. Henry recalled.
There was just one problem: At $30 a barrel, the price of oil was about half of what was needed to make drilling that deep really profitable.
So the renaissance of the Permian — and the domestic oil industry — would have to wait.
But the drillers in Texas had important allies in Washington. President Bush grew up in Midland and spent 11 years as a West Texas oilman, albeit without much success, before entering politics. Vice President Dick Cheney had been chief executive of the oil field contractor Halliburton. The Bush administration worked from the start on finding ways to unlock the nation’s energy reserves and reverse decades of declining output, with Mr. Cheney leading a White House energy task force that met in secret with top oil executives.
“Ramping up production was a high priority,” said Gale Norton, a member of the task force and the secretary of the Interior at the time. “We hated being at the mercy of other countries, and we were determined to change that.”
The task force’s work helped produce the Energy Policy Act of 2005, which set rules that contributed to the current surge. It prohibited the Environmental Protection Agency from regulating fracking under the Safe Drinking Water Act, eliminating a potential impediment to wide use of the technique. The legislation also offered the industry billions of dollars in new tax breaks to help independent producers recoup some drilling costs even when a well came up dry.
Separately, the Interior Department was granted the power to issue drilling permits on millions of acres of federal lands without extensive environmental impact studies for individual projects, addressing industry complaints about the glacial pace of approvals. That new power has been used at least 8,400 times, mostly in Wyoming, Utah and New Mexico, representing a quarter of all permits issued on federal land in the last six federal fiscal years.
The Bush administration also opened large swaths of the Gulf of Mexico and the waters off Alaska to exploration, granting lease deals that required companies to pay only a tiny share of their profits to the government.
These measures primed the pump for the burst in drilling that began once oil prices started rising sharply in 2005 and 2006. With the world economy humming — and China, India and other developing nations posting astonishing growth — demand for oil began outpacing the easily accessible supplies.
04-17-2012, 02:43 PM
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By 2008, daily global oil consumption surged to 86 million barrels, up nearly 20 percent from the decade before. In July of that year, the price of oil reached its highest level since World War II, topping $145 a barrel (equivalent to more than $151 a barrel in today’s dollars).
Oil reserves once too difficult and expensive to extract — including Mr. Henry’s limestone fields — had become more attractive.
If money was the motivation, fracking became the favored means of extraction.
While fracking itself had been around for years, natural gas drillers in the 1980s and 1990s began combining high-pressure fracking with drilling wells horizontally, not just vertically. They found it unlocked gas from layers of shale previously seen as near worthless.
By 2001, fracking took off around Fort Worth and Dallas, eventually reaching under schools, airports and inner-city neighborhoods. Companies began buying drilling rights across vast shale fields in a variety of states. By 2008, the country was awash in natural gas.
Fracking for oil, which is made of larger molecules than natural gas, took longer to develop. But eventually, it opened new oil fields in North Dakota, South Texas, Kansas, Wyoming, Colorado and, most recently, Ohio.
Meanwhile, technological advances were making deeper oil drilling possible in the Gulf of Mexico. New imaging and seismic technology allowed engineers to predict the location and size of reservoirs once obscured by thick layers of salt. And drill bits made of superstrong alloys were developed to withstand the hot temperatures and high pressures deep under the seabed.
As the industry’s confidence — and profits — grew, so did criticism. Amid concerns about global warming and gasoline prices that averaged a record $4.11 a gallon in July 2008 ($4.30 in today’s dollars), President Obama campaigned on a pledge to shift toward renewable energy and away from fossil fuels.
His administration initially canceled some oil and gas leases on federal land awarded during the Bush administration and required more environmental review. But in a world where crucial oil suppliers like Venezuela and Libya were unstable and high energy prices could be a drag on a weak economy, he soon acted to promote more drilling. Despite a drilling hiatus after the 2010 explosion of the Deepwater Horizon in the Gulf of Mexico, which killed 11 rig workers and spilled millions of barrels of crude oil into the ocean, he has proposed expansion of oil production both on land and offshore. He is now moving toward approving drilling off the coast of Alaska.
“Our dependence on foreign oil is down because of policies put in place by our administration, but also our predecessor’s administration,” Mr. Obama said during a campaign appearance in March, a few weeks after opening 38 million more acres in the gulf for oil and gas exploration. “And whoever succeeds me is going to have to keep it up.”
An American Oil Boom
The last time the Permian Basin oil fields enjoyed a boom — nearly three decades ago — Rolls-Royce opened a showroom in the desert, Champagne was poured from cowboy boots, and the local airport could not accommodate all the Learjets taking off for Las Vegas on weekends.
But when crude prices fell in the mid-1980s, oil companies pulled out and the Rolls dealership was replaced by a tortilla factory. The only thriving business was done by bankruptcy lawyers and auctioneers helping to unload used Ferraris, empty homes and useless rigs.
“One day we were rolling in oil,” recalled Jim Foreman, the general manager of the Midland BMW dealership, “and the next day geologists were flipping burgers at McDonald’s.”
The burger-flipping days are definitely over. Today, more than 475 rigs — roughly a quarter of all rigs operating in the United States — are smashing through tight rocks across the Permian in West Texas and southeastern New Mexico. Those areas are already producing nearly a million barrels a day, or 17 percent more than two years ago. By decade’s end, that daily total could easily double, oil executives say, roughly equaling the total output of Nigeria.
04-17-2012, 02:44 PM
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“We’re having a revolution,” said G. Steven Farris, chief executive of Apache Corporation, one of the basin’s most active producers. “And we’re just scratching the surface.”
It is a revolution that is returning investments to the United States. Over several decades, Pioneer Natural Resources had taken roughly $1 billion earned in Texas oil fields and drilled in Africa, South America and elsewhere. But in the last five years, the company sold $2 billion of overseas assets and reinvested in Texas shale fields.
“Political risk was increasing internationally,” said Mr. Sheffield, Pioneer’s chief executive, and domestically, he was encouraged to see “the shale technology progressing.”
Pioneer’s rising fortunes can be seen on a 10,000-acre field known as the Giddings Estate, a forsaken stretch inhabited by straggly coyotes, rabbits, rattlesnakes and cows that forage for grass between the sagebrush. When Pioneer bought it in 2005, the field’s hundred mostly broken-down wells were producing a total of 50 barrels a day. “It was a diamond in the rough,” said Robert Hillger, who manages it for Pioneer.
Mr. Hillger and his colleagues have brought an array of new tools to bear at Giddings. Computer programs simulate well designs, minimizing trial and error. Advanced fiber optics allow senior engineers and geologists at headquarters more than 300 miles away to monitor progress and remotely direct the drill bit. Subterranean microphones help identify fissures in the rock to plan subsequent drilling.
Today, the Giddings field is pumping 7,000 barrels a day, and Pioneer expects to hit 25,000 barrels a day by 2017.
The newfound wealth is spreading beyond the fields. In nearby towns, petroleum companies are buying so many pickup trucks that dealers are leasing parking lots the size of city blocks to stock their inventory. Housing is in such short supply that drillers are importing contractors from Houston and hotels are leased out before they are even built.
Two new office buildings are going up in Midland, a city of just over 110,000 people, the first in 30 years, while the total value of downtown real estate has jumped 50 percent since 2008. With virtually no unemployment, restaurants cannot find enough servers. Local truck drivers are making six-figure salaries.
“Anybody who comes in with a driver’s license and a Social Security card, I’ll give him a chance,” said Rusty Allred, owner of Rusty’s Oilfield Service Company.
If there is a loser in this boom, it is the environment. Water experts say aquifers in the desert area could run dry if fracking continues expanding, and oil executives concede they need to reduce water consumption. Yet environmental concerns, from polluted air to greenhouse gas emissions, have gained little traction in the Permian Basin or other outposts of the energy expansion.
On the front lines in opposition is Jay Lininger, a 36-year-old ecologist who drives through the Permian in an old Toyota Tacoma with a hard hat tilted on his head and a federal land map at the ready.
A former national park firefighter, he says he is now battling a wildfire of a different sort — the oil industry.
Nationally, environmentalists have challenged drilling with mixed results. Efforts to stop or slow fracking have succeeded in New York State and some localities in other states, but it is spreading across the country.
In the Permian, Mr. Lininger said, few people openly object to the foul-smelling air of the oil fields. Ranchers are more than happy to sell what water they have to the oil companies for fracking.
Mr. Lininger and his group are trying to slow the expansion of drilling by appealing to the United States Fish and Wildlife Service to protect several animal species, including the five-inch dunes sagebrush lizard.
“It’s a pathetic little lizard in an ugly desert, but life needs to be protected,” he said. “Every day we burn fossil fuel makes it harder for our planet to recover from our energy addiction.”
04-17-2012, 02:45 PM
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Mr. Lininger said the oil and ranching industries had already destroyed or fragmented 40 percent of the lizard’s habitat, and 60 percent of what is left is under lease for oil and gas development.
The wildlife agency proposed listing the lizard as endangered in 2010 and was expected to decide last December, but Congressional representatives from the oil patch won a delay. Oil companies are working on a voluntary program to locate new drilling so it will not disturb the lizard habitat.
But for Mr. Lininger’s group, the Center for Biological Diversity, that is far from sufficient.
Brendan Cummings, senior counsel of the center, said protecting the lizard was part of a broader effort to keep drilling from harming animals, including polar bears, walruses and bowhead whales in the Alaskan Arctic and dwarf sea horses and sea turtles in the Gulf of Mexico.
“When you are dealing with fossil fuels, things will always go wrong,” Mr. Cummings said. “There will always be spills, there will always be pollution. Those impacts compound the fragmentation that occurs and render these habitats into sacrifice areas.”
A Turn Toward Efficiency
If the Permian Basin exemplifies the rise in production, car-obsessed San Diego is a prime example of the other big factor in the decline in the nation’s reliance on foreign oil.
Just since 2007, consumption of all liquid fuels in the United States, including diesel, jet fuel and heating oil, has dropped by about 9 percent, according to the Energy Department. Gasoline use fell 6 to 12 percent, estimated Tom Kloza, chief oil analyst at the Oil Price Information Service.
Although Southern California’s love affair with muscle cars and the open road persists, driving habits have changed in subtle but important ways.
Take Tory Girten, who works as an emergency medical technician and part-time lifeguard in the San Diego area. He switched from driving a Ford minivan to a decidedly smaller and more fuel-efficient Dodge Caliber. Fed up with high gasoline prices, he also moved twice recently to be closer to the city center, cutting his daily commute considerably — a hint of the shift taking place in certain metropolitan areas as city centers become more popular while growth in far-out suburbs slows.
“I would rather pay a little more monthly for rent than for just filling up my tank with gas,” he said, after pulling into a local gas station to fill up.
Mr. Girten is one of millions of Americans who have downsized. S.U.V.’s accounted for 18 percent of new-car sales in 2002, but only 7 percent in 2010.
The surge in gasoline prices nationwide — they are already at a record level for this time of year — has contributed to the shift toward more fuel-efficient cars. But a bigger factor is rising federal fuel economy standards. After a long freeze, the miles-per-gallon mandate has been increased several times in recent years, with the Obama administration now pushing automakers to hit 54.5 m.p.g. by 2025.
As Americans replace their older cars — they have bought an average of 1.25 million new cars and light trucks a month this year — new technologies mean they usually end up with a more efficient vehicle, even if they buy a model of similar size and power.
California has long pushed further and faster toward efficiency than the rest of the country. It has combated often severe air pollution by mandating cleaner-burning cars, including all-electric vehicles, and prodded Washington to increase the fuel efficiency standards.
Thousands of school buses, trash trucks, tractor-trailers and street sweepers and public transit buses in the state run on natural gas, which is cheaper than gasoline and burns more cleanly. That switch cuts the consumption of foreign oil, as does the corn-based ethanol that is now mixed into gasoline as a result of federal mandates.
Longer-term social and economic factors are also reducing miles driven — like the rise in Internet shopping and telecommuting and the tendency of baby boomers to drive less as they age. The recession has also contributed, as job losses have meant fewer daily commutes and falling home prices have allowed some people to afford to move closer to work.
The trend of lower consumption, when combined with higher energy production, has profound implications, said Bill White, former deputy energy secretary in the Clinton administration and former mayor of Houston.
“Energy independence has always been a race between depletion and technologies to produce more and use energy more efficiently,” he said. “Depletion was winning for decades, and now technology is starting to overtake its lead.”
04-17-2012, 02:56 PM
he second oil revolution
By Victor Davis Hanson
Sunday, Apr. 01, 2012 | 12:00 AM
The world was reinvented in the 1970s by soaring oil prices and massive transfers of national wealth. It could be again if the price of petroleum crashes -- a real possibility given the amazing estimates about the new gas and oil reserves on the North American continent.
The Canadian tar sands, deepwater exploration in the Gulf of Mexico, horizontal drilling off the eastern and western American coastlines, fracking in once-untapped sites in North Dakota, and new pipelines from Alaska and Canada could within a decade double North American gas and oil production.
Given that North America in general and the United States in particular might soon be completely autonomous in natural gas production and within a decade without much need of imported oil, life as we have known it for nearly the past half-century would change radically.
Take the Middle East. The United States currently devotes about $50 billion of its military budget to patrolling the Persian Gulf and stationing thousands of troops in the region.
America was the target of a crippling oil embargo following the 1973 Yom Kippur War. Ever since, it has often hedged its support of democratic Israel in fear of oil cutoffs or price hikes from the Middle East. Just as often, the United States finds itself hypocritically calling for democracy while supporting medieval sheikdoms and monarchies in the oil-exporting gulf. Likewise, Western petrodollars seem to find a way into the coffers of terrorists bent on killing Americans and their allies.
But at a time of shrinking defense budgets, an oil-rich America might not need to protect Middle Eastern oil fields and lanes. U.S. foreign policy for once really could be predicated on the principle of supporting those nations that embrace constitutional government and human rights, without worry that offended dictators, theocrats and kings would turn off the spigots.
Curbing the voracious American appetite for imported oil could also help lower world petroleum prices for everyone. Poorer nations in Africa, Asia and Latin America would save billions of dollars on their imported-energy bills.
High-cost oil has warped the global system by rewarding luck and punishing accomplishment. Oil-poor countries that earned their wealth through hard work and innovation -- China, Germany, India, Japan, South Korea and Taiwan, for example -- should be rewarded with reduced imported-energy costs, while those that became rich by having someone else find and develop the oil beneath their feet might find their windfalls reduced.
Americans tend to admire the earned wealth of China and Japan more than the accidental riches of Saudi Arabia and Iran. Without high-priced oil, Hugo Chavez and Mahmoud Ahmadinejad are just neighborhood loudmouths rather than regional threats.
Unemployment here in the United States has not dipped below 5% since February 2008, during the last year of the Bush administration. But some estimates suggest that 3 million to 4 million jobs will follow from new gas and oil production alone. That figure is aside from the greater employment that would accrue from reduced energy costs. Farmers, manufacturers and heavy industries could gain an edge on their overseas competitors, as everything from fertilizer and plastics to shipping and electrical power would become less expensive.
America is spending nearly a half-trillion dollars a year on imported oil -- the greatest contributor to the massive annual U.S. trade deficit. We are also currently borrowing more than $1 trillion a year to finance chronic budget deficits, which in turn weaken the dollar and make oil imports even more expensive.
But without the drag of high-cost imported oil, the economy would grow more rapidly, and that could shrink both trade and budget deficits -- lessening somewhat the need for spending cuts and new taxes.
The problem with green energy has not been the idea, per se, of wind and solar power and electrical cars, but the use of massive federal subsidies, in times of record fossil-fuel prices, to rush into commercial-production technologies that are not yet cost-competitive or reliable.
The president recently talked of vast algae reserves. True, energy-rich scum may prove to be helpful in the distant future. But right now we don't have the money to find out -- unless we tap our burgeoning fossil-fuel supplies, which can provide a critical bridge to new sources of green energy.
The world was transformed for the worse in the 1970s, when world oil prices quadrupled. A half-century later, it could change again for the better should oil prices crash. We should do our part in ensuring that at last the tables are turned.
Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University. You can reach him by visiting email@example.com. His column appears Sundays.
Read more here: http://www.fresnobee.com/2012/03/30/2782173/the-second-oil-revolution.html#storylink=cpy
04-17-2012, 05:39 PM
Yep! Obama is hoodwinking the environmentalist on this issue. This dude is a slick slick Chicago style politician and really his own party has not caught up to him yet.
When people on the board say the right is stupid, look at Obama he is just like a repub they are right, but still fooled. They see him making trade deals that screw unions and labor, see him fighting wars just like Bush. On issues like Keystone he lies to his base saying he will fight it. Saying he is an environmentalist. But at same time hes like once i am re-elected **** them. I will just stall Keystone, let the non controversial parts get built, then when i can, build the part to Canada. Obama has known all alone this pipeline is going through. Its been funny watching us all argue over something that is already being built.
He's the classic Chicago style politician. He's both liberal, center, and right all in the same President. He will choose whatever position suits him at the time to get what he wants. He's a lot better politician then i gave him credit for originally.
Not sure Romney can crack this nut. Not with media firmly in the Obama nutsack.