If a foreign power tried to dictate our energy policies to us, we would declare war. But no foreign power is to blame for our energy troubles. Rather, we’ve pointed a gun at our own head. In a case without historic parallel, the United States has opted for national suicide when the answer to many of our energy problems lies literally under our feet.
As I write this, oil prices are hovering around $100 a barrel and seem set to rise further, despite a reduction in global demand caused by the earthquake in Japan. But make no mistake about it, oil prices were going up under any circumstances. Collapsing Arab governments had brought us to the $100 threshold a few months earlier. Regardless of what happens in the Middle East, the price of oil is set to go much higher, not because we are running out of the stuff, but because we are not looking hard enough for new sources or exploiting the sources we have. By 2015, or quite possibly earlier, the world will hit a crunch where new supplies will not be coming online fast enough to meet soaring demand.
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The last time demand got ahead of capacity was in 2008, when the price of a barrel of crude hit $147 and helped spark the global economic collapse that is still haunting our economy. When, as a result, the price of gasoline pushed through $4 a gallon, a single battle cry threatened to sweep all resistance before it: “Drill, Baby, Drill.”
The resistance revolved around two points. The first was that the U.S. had only 2 percent of the world’s oil reserves, so no matter how much we drilled, there was not enough oil in the country to make a difference. Second, even if we started drilling immediately, it would be years before the oil started arriving on the market. The first was and remains a lie. The second may be the dumbest argument for sitting on our hands ever created. Did anyone think that there would never again be a shortage of oil? Here we are a few years later and its déjà vu all over again.
Unless we start drilling immediately, in a few years we will look back at $100-a-barrel oil as a fond memory. Surging demand in emerging nations, a ravenous China, and the needs of hopefully growing U.S. and European economies will soon outstrip supplies. Once that happens for a prolonged period, the price of oil will not stop south of $200. Present estimates place spare oil-production capacity at approximately 4 million barrels a day (MBD), most of which is in Saudi Arabia. As demand grew at an annualized rate of 3.3 MBD last quarter, it is clear that we are almost at the end of our tether.
Even as gasoline once again pushes towards $4, the United States remains at the mercy of foreign suppliers to meet its needs. Each year we use almost 7 billion barrels of oil, of which more than half are imported. About a quarter of our imports come from the Persian Gulf. Every year we drain our economy of $350 billion to pay other nations for their oil, many of whom would welcome the demise of American power. Despite the promises of eight consecutive presidents to reduce our demand for foreign oil, we are worse off than ever.
The old rule of thumb was that for every $10 increase in the price of oil, the nation’s GDP was reduced by .02 percent. But that approximation was based on a healthy economy at or near full employment. In an economy that is still struggling to recover, an oil-price shock is likely to have more dire consequences. As unbalanced capital flows return and oil-based inflation takes hold, there is a real chance that the U.S. could slip back into recession. The resulting demand destruction will lower the price of oil for a time, but at a terrible cost. Moreover, the same roller-coaster ride will happen again and again, whenever we begin to recover economically. The only long-term solution is to find and consume our own energy reserves.
You have to expect leftists to block fossil fuel production. That's the only way to achieve their utopia where all energy comes from the sun and the wind. The first obstacle to progress is the gullible Republicans who have not figured out that global warming alarmism is a hoax. Senator Lindsey Graham is a prime example. He says things like we have to "clean up carbon pollution", because when he visits college campuses concern about climate is a "value". Not only can't he figure out global warming is a hoax, he hasn't figured out that college students are being indoctrinated. With suckers like that running the government, we're a long way from a rational energy policy.
President Obama needs Chevy Volts sold, and that is improved with higher oil prices, not lower. Between now and 2015, the higher oil prices are, the better his chance to get that 1,000,000 Volt on the road.
I couldn't agree with this article more. I also think selfevidenttruths brings up an excellent point. They have kidnapped our children's attitudes and it's time the sane people stood up and spoke the plain truth, "hurt feelings" nonwithstanding. We should also brook no argument, this is truly insane and we have to start drilling NOW.
I'm a staunch environmentalist, yet I believe that it is in the best interests of our country (and the interests of the environment!) for us to responsibly utilize all of our own energy resources, especially including oil. And I can even manage to convince most of the people I know, who are mostly also staunchly environmentalist, that my position is the correct one. But I really wish that the pro-drilling crowd would find some other way to advocate its position than yelling, "Drill, baby, drill!" It is crude and offensive, and it makes the person saying it sound like some kind of earth raping yahoo. I think that it is actually detrimental to the pro-drilling position. So, if there must be some short and easy way to advocate exploring for oil reserves within the territory of the United States, can someone please come up with something else to chant?
I actually have a question and hope someone can help answer it. Mr. Lacy says the oil in the Great River Basin can be profitably recovered when prices reach $25 a barrel. My question is why is it only profitable when the price falls? Wouldn't $100 a barrel make it more profitable? I'm confused. Thanks for the help!
NateDog09- I think the point is extracting that oil is profitable anywhere above $25/bl, so what the heck why aren't we going after it now at >$100/bl?
Energy runs an economy, and an economy runs a country. The Left wants to run the country, so short of becoming dictators, they have to control access to energy. And ruin the country in the process. I'd prefer not to believe that the current administration aims to ruin our country, but I'm hard pressed to find evidence to the contrary.
We need to get this point across to any and all who will listen, and can make or change the policies and regulations in time to keep this ship from running aground. DRILL BABY DRILL, while it can still make a difference.
Article reads, "What does it take to get at this oil? Only that the government get out of the way. As the prices of oil surges, the Obama administration is doing everything possible to block further exploration of our own supplies."
If this is true, and it's Obama's fault that we don't "get all of this oil", why didn't we get it all under Bush/Cheney (extremely pro-oil administration?) That was only slightly more than two years ago, and oil prices were even higher in 2008 than they are now. Why didn't "we get all this oil" four years ago, under Bush and a Republican congress?
As I remember, the only real debate back then was ANWR, which doesn't hold anywhere near as much oil as Mr. Lacey is talking about.
This is a serious, non-rhetorical question--it's so illogical to conclude that Obama's at fault when he's only been president for 2+ years. Maybe someone can bridge that logical leap w/ add'l information, but the article doesn't bother to, so I'm tempted to throw the whole thing away as anti-Obama rhetoric.
One need only read Travis Kavulla's piece in the Jan 24th edition of NR to understand that before "drill baby drill" becomes a reality there are a few "sacred" lib-progressive agencies that will to get the ax!!!
The suspicion is that not many who visit and post "comments" at NRO subscribe to NR, substantiated by the entertaining, deeply philosophical, and enlightened lib-progressive stupidity that gets posted across the board as no subject is left unscathed...but keep them coming as you're such fun!!!
Wow, this author cites not a single source for any of his outrageous claims. 400 years of coal? Keep dreaming. In fact the energy content of the coal we mine peaked in 2005 and has been falling ever since.
1.4 trillion barrels of oil? Wishful thinking? Where did you pull these numbers from? They are ludicrous.
Tim L
I thought the numbers were astounding myself, perhaps the author will give us his sources.
I looked into it briefly; you may know that much of the oil reserves we have is in oil shale, and indeed well over 1.5 trillion barrels available in just one region. Do some research, for instance geology.com, you'll be surprised.
Yes its more expensive but still profitable to get oil from the shale; at anything above $50/bbl its profitable and we are well above that.
If you mean that we peaked the equivalent energy from the total of coal we mine, I'd agree there are other factors supressing the coal mining activity. However we still have a lot of coal not being mined. Also add natural gas to the equation- there is a LOT of energy available here within our borders, and I don't mean wind.
@George99
Perhaps before you, "...throw the whole thing away" you should re-read it. I believe you missed the following: "Despite the promises of eight consecutive presidents to reduce our demand for foreign oil, we are worse off than ever."
Does it seem less like anti-Obama rhetoric now?
