Should Energy Policy be Rooted in Logic or Fashion?

Unfortunately, the U.S. is not self-sufficient in petroleum and we have a way to go. We consume 19.96 million barrels of crude oil per day (Mbbl/day). Of that, we produce 13.134 Mbbl/day. We also export about 6 Mbbl/day, where prices and transportation costs are attractive. In 2017, we imported about 10.4 Mbbl/day from countries such as Canada (4.05 Mbbl/day), Saudi Arabia (0.96 Mbbl/day), Mexico (0.68 Mbbl/day), Venezuela (0.67 Mbbl/day), Iraq (0.6 Mbbl/day), Russia (0.389 Mbbl/day), and Nigeria (0.334 Mbbl/day). Some of the U.S. exported crude oil could be retained if we chose to ship it to our own markets by tanker car or by pipeline, but logic and economics sometimes shows export to be the smarter move.

In total, 17% of our imported crude oil comes from the Persian Gulf, and 3 Mbbl/day of our imports come from countries whose stability is, at best, precarious for political reasons. Some of our big suppliers are longtime friends of the U.S. Saudi Arabia is lately erratic, and Iraq is still unsteady. Venezuela is overtly hostile toward the U.S. Russia is unstable and uses crude and natural gas as a tool of international hostility toward the U.S. Nigeria is politically unstable, suffering chronic terrorist attacks on its production base. Mexico and Canada are civil and have been a standby energy source.

We dragged our feet over committing to a pipeline that could connect the Canadian Tar Sands (aka Oil Sands) source to the US petroleum hub in Cushing, Oklahoma. Crude is extracted from oil sands by several methods – a common process being digestion by hot water. That pipeline could have given the US the guarantee of a steady crude supply from a sane neighbor.

US politicians allowed their own chronic dithering and activist opposition to the use of fossil fuels to undermine the economic security of US consumers. After waiting for years for a positive decision on pipeline and crude purchases, Canada was jilted on a US deal. Canada is now in the grip of its left-wing politicians, who claim to be reconsidering the damage from extracting crude from the Oil Sands. Simultaneous with holding that fashionable posture, Canada is considering the advantages of building its own pipeline to the West Coast and signing up to supply China on a long-term basis.

Again, Canada and US consumers lose. China and US activists win.

In the US, we have disparaged the highly productive technology of fracking. Fracking could bolster the US’s own crude oil production and cut our reliance on unreliable producers. There are prudent safeguards for use in fracking that can safeguard the purity of groundwater and runoff. There are also imaginary “safeguards” that threaten the environment so severely that they preclude a productive outcome from any kind of drilling process.

A proposition in the recent Colorado election would have prohibited fracking closer than a half mile from any building – not limited to a meaningful structure, the ban is triggered by any building. The distance limit means that fracking would be banned anywhere in any one-mile circle that contains a building. Fortunately, voters (both Republican and Democrat) saw the lunacy of the restriction and voted it down.

In both the Tar Sands and Colorado fracking restriction, we dragged our feet because fossil fuels are considered unfashionable. Somehow the same agitators who use fossil fuel powered transport to reach school, work, rock concerts, family gatherings and urban protest marches are blind to the hypocrisy of their public reliance on the fossil fuels they loudly denigrate. The same hypocrisy applies to the energy-consuming information technology that is the foundation for many of our salaries.

We all celebrate the progress made by wind, solar, geothermal, and hydroelectric energy, but their energy production requires specialized terrain or equipment that is too costly to meet all of America’s needs. In many instances, fossil fuels supply transportation and electric energy more cheaply than non-fossil fuels. In some instances, hydroelectric, solar, and wind power are less costly for consumers.

Until the right mix of affordable energy production is available to all consumers, agitators should focus on goals with integrity – such as better research on batteries, smart ways to network energy distribution that serves all of us (not just those on the coasts), and the right balance between energy self-sufficiency and economic security for consumers.

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