Editorial Comment

	Vol. 225 No. 11
PERRY A. FISCHER, EDITOR

Who are you? By the time you read this, the US presidential election will be over. And not a moment too soon. If you're lucky enough to not live in the US this past year, you might have no idea of how inundating political marketing has become. I'm writing this about two weeks before the election, and I was wondering how you might feel about the outcome. I often wonder who World Oil readers are, politically – but I'm especially curious now. It's not as if we have Nielsen ratings or a World Oil reader political poll to go by. The difficulty lies in the “world” part of World Oil: it's truly a big, diverse world. It would be easy to make assumptions based on nothing; so instead, I'll make assumptions based on next-to-nothing: polling and readership data, together with extremely unscientific, educated guesses. I'll do this in “real time,” without modification, in segments, so the outcome will be unknown, even to me, until the final addition.

Our latest BPA statement (a non-profit circulation-auditing organization) shows that as of June 2004, there were 35,269 qualified readers about which we know something, such as where you live. About 53% were in the US. Of those, some 12,100 were in the highly conservative states of Louisiana, Oklahoma and Texas.

I recall reading somewhere, a few years ago, that polling data indicated 67% of Southern white males voted Republican in national elections. Taking that as a minimum proxy, and bumping it because, from personal experience, the oilfield in those states tends to be strongly conservative, I'll guess that 80% would vote Republican. But then, a few Republicans are genuinely upset with Bush because of border, spending, and nation-building policies, to name a few. Add to that those few readers who are ex-pats living in the large oilfield cities, and I'd guess that 75% actually wanted Bush to win, or about 9,100.

Of the remaining 6,000 US readers, California has the highest concentration, with 1,324, followed by Colorado, with 833. Readers become quite spread out among the remaining states after that. California, Colorado and many of the remaining states would likely be, on average, less conservative than Louisiana, Oklahoma and Texas, but still a majority are conservative, nonetheless, within the oil patch. So, I'll assign them as 65% Bush supporters, or about 3,900.

Outside the US, we have the remaining 47% of our readers. In Canada, even in Alberta, poll numbers are surprisingly strongly anti-Bush. Elsewhere in the world, Bush's numbers were equally bleak, with a few exceptions such as Poland and Israel. These polls, taken as proxies, even allowing for some conservative shifting to the right due to the oilfield business, give a best-I-can-muster of about 35% for Bush internationally, or 5,800. Adding, I get 53% of our readers supporting Bush, 47% Kerry, with the assumption that everyone cares. I've run the numbers several different ways, adding or subtracting 5% here or there, but the conclusion remains the same: Now that the election is over, no matter who won, roughly half of you are disappointed. And the rest are delighted.

ANWR revisted. With the election over, the Arctic National Wildlife Refuge 1002 Area will become an issue again. If Kerry won – which is unlikely – he will attempt to put it off-limits to drilling for a very long time. For those who believe that the world is running out of oil and alternatives will not be forthcoming, an optimist would find that Kerry brings good news: The US will deplete someone else's oil first, holding on to its ANWR reserves for later. For the rest of us, assuming Bush won, it's possible that he will stop using it as a political tool, strip the ANWR portion of other legislative encumbrances (probably designed to ensure its defeat earlier), and pass it, at the very least, as a budgetary item.

Most of the Democrats will want to block ANWR drilling of any kind. To garner a bit more bipartisan support and appeal to the few Republican holdouts, as well as some crossover Democrats, what's needed is some limited appraisal drilling, say, 12 to 24 wells. This would probably require an agreement beforehand that only appraisal drilling would take place, with a guarantee of no development without debate. Financing such drilling would be complicated, but doable. The argument as to whether to develop would be a separate, subsequent issue, based on results.

I suspect that politicians are afraid of the things that most of us in the oil field already know: that government geologists are, at best, no better than private geologists and, therefore, federal estimates of 4 – 12 billion barrels of technically recoverable oil could be completely wrong (in either direction); that garnering a lot of press and holding an auction is no guarantee oil companies will line up and bid high; that whatever accumulations are found could still be messy – in highly fractured or dispersed pools, rather than in massive, hoped-for blocks, or of poor quality.

An even better approach would be to use ANWR 1002 as an expansion of the Strategic Petroleum Reserve (SPR). Rather than lease, drill and produce ANWR in the usual way, it could be agreed upon beforehand that if large commercial discoveries are made, they would not be produced, except in times of national emergency. If they exist, such discoveries could be set up for early production, yet remain shut-in. Complex lease agreements would be necessary, with the federal government providing substantial incentives in exchange for public disclosure of the data and indefinite delay of production.

I realize that this is a rational and insane compromise. The proper way to expand the SPR – which many in Congress want to do – is to fully develop ANWR, pump the oil via the Alaskan pipeline system, tanker it to south Louisiana, then pump it into newly constructed SPR storage facilities within salt domes, all at considerable expense. A portion of the profits thus obtained could be given to a political action committee, whose message would be to curb wasteful government spending.

Incidentally, in a move reminiscent of former President Clinton's emergency heating oil buildup, and under similar repayment terms, President Bush has deemed the recent effects of Hurricane Ivan as cause to release about 2 million bbl or so of oil from the SPR.