Footnotes

Can We Drill Our Way Out?

Good news from Washington for the oil companies. The U.S. senate just passed a narrowly focused bill that will open 8.3 million acres for new energy development in the Gulf of Mexico [1]. A hundred miles off the coast of Florida, encroaching on a moratoria region, it is called “Sale 181 Area,” and may contain as much as 1.2 billion barrels of oil [2]. The house has its own version that is even more ambitious. It would expand the drilling to most of the continental shelf off the Atlantic and Pacific coasts [3]. And yes, this means off New England.

The senate majority leader Bill Frist rammed this bill through the senate during the remaining time for legislation this year without any amendments. Hyped to “Enhance the energy independence and security of the United States,” the hurried plunge will be sold to the public as an answer to our problems. And some people will believe it.

It seems this administration’s attitude is to convince the people of the U.S. that we can appease our oil gluttony if we just focus on drilling in the last reservoirs of oil under our control. This blind charge doomed any discussion in the senate of sensible provisions to address our addiction to oil, only a misguided attempt to feed it.

As dictated by Bill Frist, there were no amendments offered for stringent fuel efficiency standards for cars that really could drastically reduce imports. Try 40 mpg average rather than the current 21 mpg. That would save the import of some 4 million barrels a day from you know whom.

Unfortunately there was no discussion of repealing the total royalty relief programs for energy companies that are currently taking our oil for free. Traditionally, this royalty is one-sixth or 16% based on the selling price of oil. That relief was intended to encourage expensive deep drilling in our dwindling Gulf reserves. In truth it is a government giveaway of $7 billion dollars over the next five years to energy developers of royalties that belong to you and me [4]. And who’s making record profits? In this last quarter alone the windfall goes to: Exxon Mobil - $10 billion, ConocoPhillips - $5 billion, and BP - $7 billion. We pay for it at the gas pump. That’s simply outrageous.

And far beyond the imagination of most senators, much less for discussion, is the development of renewable energy for long-term sustainability. They could have at least extend the modest production tax credit for wind energy that ends next year. But no. Not in this bill. Better to drill for the dwindling reserves, feed the profits, and get elected again.

A billion barrels sounds like a lot of oil. But consider the reality in relation to our import of 11 million barrels a day [5]. Just suppose this new Gulf area could magically be brought online at a rate equal to these foreign imports. The production would last just about 110 days! We certainly are addicted to oil! Or more plausibly, if pumped at a rate of just one million barrels a day it would last for about three-and-a-half years. So what’s next? I’m concerned about an inconvenient conclusion.

Remember Denmark? In 1973 they generated 90% of their electricity from imported oil. Never again. Now not only are they energy self sufficient, but they export 50% of their oil, 30% of their natural gas and 19% of their electrical energy [6].

And remember wind energy? The wind is free and plentiful and not subject to cutoff. Denmark is the world’s leader in the generation of wind energy and also in the manufacturing and technology of wind turbines. By the way, where do you think the five big wind turbines in Massachusetts were made? You guessed it. Denmark [7].

So here we sit under the shadow of unhealthful emissions from the Canal power plant that consumes about 8 million barrels of oil a year. That’s almost two days production from all the oil wells in the continental United States [8]. And our Senator Kennedy and Representative Delahunt are doing all they can to kill the country’s first offshore windfarm on Nantucket Sound that could potentially replace 2 million barrels of that imported oil to generate pollution-free electricity with GE wind turbines and no global warming impact.

Unfortunately many members of congress feel compelled to drain the last of Mother Earth’s oil in a fleeting gluttonous feast of fun in big cars and energy company record profits to ensure their election for another term. With little view of the future and the impact of global warming they will quickly burn through our remaining resources that should be saved and stringently parceled out by future generations. It remains to be seen what the compromise bill will look like after the summer recess is over. But the oil companies will undoubtedly be delighted.

So, do you still think we can drill our way out? Think again. I just ordered my Prius.

Chuck Kleekamp, P.E. Ret.

Vice President, Clean Power Now

Footnotes:

1. “Senate Passage of Energy Bill Appears Assured,” by Michael Janofsky, New York Times, July 27, 2006. This is Senate Bill S. 3711 introduced on July 21, 2006.

2. Map of 181 Area identified as map 15, page 58, of the Proposed Final Outer Continental Shelf Oil and Gas Leasing Program for 1997-2002 of the Minerals Management Service.

3. Senate Bill Lifts Hopes of Big Oil Offshore,” by Clifford Krauss, New York Times, August 3, 2006.

4. U.S. Has Royalty Plan to Give Windfall to Oil Companies,” by Edmund Andrews, New York Times, February 14, 2006.

5. EIA This Week in Petroleum (Crude Oil), http://tonto.eia.doe.gov/oog/info/twip/twip_crude.html

6. Energy in Denmark 2003,” Danish Energy Authority, p. 9

7. The five large wind turbines in Massachusetts are manufactured by Vestas in Denmark and they are: Hull One - 660 kW, Hull Two - 1.8 MW; Massachusetts Maritime Academy – 660 kW; Orleans (to be delivered soon) two 1.5 MW units.

8. EIA This Week in Petroleum (Crude Oil):

http://tonto.eia.doe.gov/oog/info/twip/twip_crude.htmlDaily US production in 2005 was 5.120 Mbbls/day, subtracting Alaska: 0.801 Mbbls/day = 4.319 Mbbls/day.