Lies the Oil Companies Peddle

The current use of mythology in politics is not really new—it has been a tool of politicians for many, many years. For example, gasoline prices shooting beyond four dollars a gallon has paved the way for loud shouting by those pols who side with the oil companies and who are calling for more oil drilling in heretofore prohibited areas in America and off our shores.

Open the ANWR for drilling and our energy problems will be solved, is one of President Bush’s favorite war cries. He has always done what he could for his friends in the oil industry, in particular by very recently canceling an executive order prohibiting drilling in certain offshore areas, claiming, he says, that it will solve our energy problems. Similarly, John McCain, who will run for President as a Republican, has not given up on his proposal to cancel the gasoline tax until the crisis is over with.

All these proposals have some traction because they are riding on the wings of oil mythology, which holds that increasing the supply of oil in America will bring down the prices. The myth has a certain attraction, until, that is, one is able to look behind the myths to see what the truth is.

We should pay attention to the recent statements of T. Boone Pickens, whose marketing of oil has made him a billionaire. “We can’t drill our way out of this crisis,” he has said in his television commercials advertising his alternative energy plan. Mr. Pickens is no socialist dreamer, but an expert on making money in the oil industry, so there must be something to what he’s saying about oil supply and alternative sources of energy.

One certified, neutral expert on oil supply has said that even if the United States started drilling offshore today, it would be ten years before that supply would come online. Beyond that, Dr. Robert Kaufman of Boston University tells us that there are already approved offshore oil fields that contain more than 40 billion barrels of oil. The problem is the expense of bringing that oil online.

But President Bush’s cry — and that of the oil industry — is that we must open up more areas previously off limits offshore oil fields which are prohibited because of environmental concerns, including concerns voiced by California’s Governor Arnold Schwarzenegger.. Even if the offshore fields were opened today, and if we disregard the danger to the environment, those prohibited areas contain only 18 billion barrels–far less than the areas already opened for drilling.

Any drilling offshore would make only a small difference in supply of oil, from 1 per cent to 4 per cent, according to Dr. Kaufman. The same is true for drilling in Alaska in the heretofore prohibited Wildlife Refuge. Should that drilling be allowed the most America could realize out of that field would be one million barrels a day ten years from now. Because oil is really a fungible product, that is, it can be shipped anywhere on the planet, and because world oil consumption is now 86 million barrels a day, opening up the protected area in Alaska would make almost no difference when one takes into account what will certainly be a world wide decline in production over that ten year period.

Dr. Kaufman also states that the Alaskan pipeline has been amortized over the years and is now fully paid for. Oil coming out of the protected areas in Alaska would have to go through a newly constructed spur pipeline to the already paid for Alaskan pipeline, the result being a massive profit windfall for the industry. Small wonder Big Oil and its allies in the government are clamoring to drill in the ANWR.

Dr. Kaufman, who is not opposed to making money, is very much on target when he says that production of oil, and the shortages we are now facing are not really production problems. They are more a problem of profits for the oil giants. The question that should be asked is not how to find more oil domestically, but how much money can the industry make as a result of its eagerness to drill in protected areas.

He is also on target when he says that should the industry find it can make as much or more money with alternative, clean sources as it can make by drilling expensive holes 20,000 feet deep in the ocean floor, it will switch to clean energy production.

Perhaps if we can find a way for the oil and automobile industry to get rich from such alternative sources, they could then mobilize the politicians who are eager to do favors for them.

Ref: Counterpunch
James G. Abourezk is a lawyer practicing in South Dakota. He is a former United States senator and the author of two books, Advise and Dissent, and a co-author of Through Different Eyes. Abourezk can be reached at georgepatton@alyajames.net.