Editorial Comment

	Vol. 224 No. 10
PERRY A. FISCHER, EDITOR

Everything is possible. The other day I was looking at the old newspaper that I’d saved from July 20, 1969. I remember thinking how odd it was that that extraordinary day is not remembered.

I wonder how, a century or two from now, historians will view the relative significance of December 7, 1941 (a day that will live in infamy), September 11 and July 20. Sure, the bombing of Pearl Harbor – largely about oil supply – led to the US declaring war on the Axis Powers. It also directly led to the rapid development and, thus far, only detonation of an atomic bomb over a city. We are still too much in the midst of the 9-11 aftermath to see where that will take us. And although no one died on July 20, a record world audience watched on TV as Walter Cronkite, overcome by emotion, removed his glasses to wipe his eyes. I remember being choked up too – after all, this was the day that humans left their planet to walk on another world. When we landed on the moon, at least for people of that generation, the world changed. It was the day that everything became possible.

So here we are, 62 years after Pearl Harbor, and North Korea is saber-rattling over, among other things, nuclear bombs and oil supply. The US and UK have just won their second war against Iraq – at least the conventional part. And while I’m sure some would say that those wars were not fought over oil, not even in large part, does anyone truly believe that those wars would have occurred if the region was famous for, say, asparagus, instead of oil? When it comes to oil, the imbalance between importing and exporting nations seems certain to get worse, and so will the consequences of that imbalance. What, if anything, can be done?

When US President John Kennedy made his famous pledge to “...achieve the goal, before this decade is out, of landing a man on the moon,” it was 1961. He was guessing. Sure, it was an educated guess; he had several months of talking with NASA consultants to advise him, but there is no possible way he could have been certain that anyone could land a man on the moon ever. 

Half of the oil used worldwide is for transportation. About two-thirds of the oil consumed in the US is for transportation. It’s well known that if a low-fuel demand transportation substitute could be achieved, the amount of imported oil would drop dramatically. Unlike the program to send a man to the moon, such technology already exists, is proven, and is rapidly improving. The US, by not requiring an increase in car fuel economy for many years, has exacerbated rather than mitigated its imported oil situation. 

In the last 15 years, fuel efficiency – after climbing more than 50% since 1975 – has been allowed to slip back to where it was in the early 1980s. Despite US government inaction, the Japanese have forged ahead and are offering high-mileage (40 mpg+) hybrid cars whose sales have topped 50,000 in the US. If 50,000 cars can be sold, then 50,000,000 can be sold, especially with the sort of government incentives that are used for corn, dairy and many other products. Japanese and US automakers will soon begin offering hybrids in the coveted SUV style.

For every 1 mpg increase in fuel efficiency, 400 – 500 thousand barrels of oil per day are saved. To ensure that this reduction results in more purchases of domestic crude, a small tariff could be levied on imported oil. 

Volumes have been written criticizing the so-called CAFE fuel efficiency standards. They were supposed to “destroy our economy” if implemented, and there’s the dreaded, “we’ll all be driving around in sardine cans.” They supposedly have caused “carnage along the highways” with “thousands of additional deaths.” Close examination reveals a highly complex subject that can be manipulated to suit any viewpoint. Deaths can be measured in highway miles, passenger miles, time and as a function of speed, vehicle size and weight. Adopting tighter CAFE standards is not completely risk free. Neither is the status quo. And it would be foolish to try to accomplish a dramatic reduction in OPEC dependency entirely through CAFE. Many other things could be done as well, such as drilling in ANWR, and opening other public lands and restricted offshore areas to exploration.

It’s easy to make the mistake that if you can put a man on the moon, then everything is doable. But in this case, achieving energy independence – or close to it – is a more certain goal compared to a 1961 commitment to walk on the moon.

If the US teamed with Europe and Japan in a man-on-the-moon type project to create hybrid cars and other alternatives for the purpose of increasing oil independence worldwide, they would likely succeed. So, why don’t they embark on such a project? Here’s something that you’ll never hear a US president say:

“The US imports about 56% of its oil. But if we pull together, if we open up drilling on all of our public lands, on all of our coasts, if we tax imported oil to raise domestic oil prices and spur domestic production, if we carpool, use public transportation and, yes, conserve and sacrifice, we can decrease oil imports to about, say, 50%, before it starts to rise again. So, what do you say, America? 

No, you won’t hear any US president say that and, by extension, any leader of an oil importing nation say anything like it. It’s just too honest. They would rather say something like, “... help lessen dependence on foreign oil,” a pathetically weak, possibly meaningless, statement. You can debate the precision of the numbers, but the lesson is the same: you cannot drill your way to anything remotely close to energy independence, especially in a mature oil region like the US with its voracious appetite for oil.

What you can expect is the status quo. Why? Because eventually, every US president, whether Republican or Democrat, realizes that cheap oil is one of the best ways to help him stay in power. It boosts the economy, and it’s much easier and quicker to ask your favorite sheik, Latino or African leader to pump a little extra oil in exchange for a little something, than to nearly achieve energy independence over a decade or so. It’s a short-term strategy that keeps men in power.

The other reason that the US won’t embark on such a project, the nasty unspoken secret, at least between politicians and the public, is that there is no way OPEC would stand by and watch such a project succeed. It would consider it an act akin to war and would wield its oil as a weapon. You could count on wild price swings, both up and down, with attempts to interfere with the political process every way possible. No politician is willing to take the heat that would inevitably be brought by OPEC and likely cost him his job. It’s also why you will not find words like these in an oilfield trade magazine.