My friend Jane Van Ryan at API played interviewer in this video shot a few days ago. I’ll share the video first, then my thoughts.
First of all, she looked a little chilly – then again, standing out in the street for whatever time it took to get three minutes of usable footage would tend to be a bit frosty. Since I’ve never done one of these on-street interviews I have no idea.
More importantly, the group Jane represents wanted to make their thoughts known about continuing oil exploration and its associated job creation to the incoming Obama Administration.
Certainly I’m not an expert in the oil business. Before I started communicating to Jane on an occasional basis, I never really thought about all the steps involved in getting something from a mile or more underground in some instances through the entire refining and transport process to the gas pump where I stand and fill my car’s gas tank. If nothing else, I have learned a little bit about the business side of things there thanks to her.
But Jane also serves to put a face on the human side of the equation. There are a whole lot of people who depend on the oil industry for their livelihood, and in truth with oil prices beginning to bottom out her industry may be in for some fairly difficult times. That’s not to say many people will be shedding tears for those in the oil business since all they hear about is the huge profits oil companies made in 2008.
On the other hand, with oil prices so low at the moment, the onetime plan to collect a windfall profits tax on oil when prices were over $80 a barrel isn’t going to happen – unless the Obama Administration does something to drive prices up to that level, such as restoring the offshore drilling ban. Remember, there are some BHO supporters who thought that $4 a gallon gasoline was a good floor price, so I’m sure they shake their head disapprovingly at gas going for $1.75 per gallon. (Either that or they think this is a great time to increase the federal gasoline tax.)
Yesterday I noticed that Obama in his inaugural address spoke briefly about wind and solar power. That’s all well and good, but I think we have better uses for our tax money than subsidizing the building of bird shredders and ice chunk throwers, or turning the desert into a sea of reflective surface. It’s what would need to happen in order to bring the percentage of energy created by either process out of the miniscule share it has now.
Furthermore, the key phrase I noticed in her video came from the gentleman who noted that planes which run on wind power haven’t been invented yet. (For the purpose of this exercise, we’ll ignore gliders.) It’s what I mean when I say that the need for oil is going to be around quite awhile yet.
We also don’t consider the heavy usage of plastics in our consumer products, which also are oil-based.
It’s our headlong rush to embrace a speculative theory based on dubious computer modeling that is preventing the domestic petroleum industry from employing even more people and helping us avoid giving our hard-earned cash to foreign interests.
While people think that all oil companies are interested in is drilling and that they’ll not be happy until the Earth resembles Swiss cheese, it’s worth noting that the oil industry spent an estimated $3.2 billion on environmental concerns in 2007, along with an additional $700 million for remediation and (mostly) prevention of spills. This is based on companies who answered an API survey on the subject, which about half participated in. (I told you Jane was good with figures, and indeed when I asked she sent the word along once she received the answers!)
She also noted:
The industry overall has invested more than $175 billion since 1990 toward improving the environmental performance of its products, facilities and operations. That’s $582 for every man, woman and child in the United States. In a 1993 report, the Department of Energy praised the U.S. oil and natural gas industry for integrating “an environmental ethic into its business culture and operations.”
I even asked a question about environmental concerns during a recent conference call.
Granted, oil isn’t the cleanest of fuels. But until technology catches up (and with such heavy government involvement I’m not holding my breath) it’s what we’re going to lean on for our transport needs for a good while yet. So let’s accept the reality and work on the parallel paths of more oil and natural gas exploration along with looking into eventual replacements.
There’s no need to make these mutually exclusive, but no need to subsidize one at the expense of the other. As we’ve seen, the oil companies pay their own way.
You don’t mention ending subsidies for nuclear power. Shouldn’t they have to compete on a level playing field as well?
I think they should, yes. But perhaps some of the subsidy was in response to the tremendous amount of red tape and regulation nuclear plants have to go through.
I once lived about smack in the middle between two nuclear plants (Davis-Besse in Ohio and Fermi 2 in Michigan) and there was little concern about their safety among the general public for the most part – although D-B did have some issues in the early part of this decade.
It’s a little off-topic, but I found out when I got my electric bill the other day that 33.2% of the electricity used to power this computer in the last half of 2007 and first half of 2008 came from nuclear sources. The rest: 55% coal, 7.1% natural gas, 0.3% oil, and 4.5% renewable energy and hydroelectric over 30 MW. Compare that to 2006 figures I mentioned here.