Thursday, January 18, 2007

Liar! Liar! Pants on Fire!

Boy, some folks think we'll buy anything. Rigzone is featuring this release from the American Petroleum Institute (API) bemoaning the proposed Congressional actions on the petroleum industry, HR 6, the "CLEAN Energy Act of 2007,". Knowing our Congress, I am not convinced they are being saintly, but API goes over the top with this comment:

"Repeal of these tax provisions designed to encourage investment in the United States will discourage new domestic oil production and refinery investments, threaten American jobs, and make it less economic to produce domestic energy resources – thereby increasing our dependence on imported crude oil and gasoline." Emphasis is mine.

Yeah right. We import 60% of our oil now, not to mention natural gas. That proportion will rise regardless of anything the industry does. At best, the industry can hope to hold the line at 60% imports, but that's it. Declining supply is declining supply, and today's article at the Oil Drum about horizontal drilling makes it abundantly clear that more efficient technology results in faster extraction, thereby faster depletion, and ultimately a steeper cliff to fall off of once permanent decline sets in. The Oil Drum also chimes in with a graphic explanation of the volume of oil taken out of the ground and how that translates into alternative energy sources. Interesting reading.

So whine API, whine to your heart's content. In the long run it will all come out to the same conclusion.


The North Coast said...

Kheris, last I heard, we import fully 75% of our oil.

We only produce 5 million barrels (and falling)per day from our own dying fields. According to Kunstler, the 'water cut' at Spindletop is now 99%. Every little stripper well in CA, OK, and TX that can yield so much as 10 barrels a day has been uncapped and is back in production.

Yet we use 22 million barrels a day, so we are on our way to importing 80%. In another 10 years, 95%, the predicament Japan is in.

If our supply from the ME were to be disrupted, it would mean a drop of at least 20% and possibly 30% in our imports, very abruptly, which would be catostrophic for the economy.

We can't afford to lose one drop of that imported oil as we live at this moment, and any disruption would affect everyone here very adversely, not just people who live car-dependent lives in the distant burbs.

I can see why most of our leaders would rather talk about anything else. The implications are too frightening, and the more we cast about for solutions the more we are cast upon the truth that for most of the people in this country there is no near term solution.

Kheris said...

The Senate hearings revealed that 75% of the world's oil is owned by National Oil Companies (NOC), in OPEC, Norway, Britain, Mexico etc. Is that where the 75% came from? I posted a link in Multitasking to Sally Odland's Master's Thesis and her documentation has us using 77% of oil for transportation. Hirsch reported the 60% imports data -- I think without going back to look.

It's all academic of course, as you point out. The proportion of oil being imported will continue to increase.