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Time to face realities of oil

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POSTED: June 21, 2010 3:31 p.m.
In spite of overwhelming facts, wishful thinkers still call for more drilling off our coastline.
Sen. Isakson and at least one candidate in Georgia’s race for governor insist that we need to get more domestic oil, wherever it may be, so that we can end dependence on “foreign dictators” who control our energy supplies.
Unfortunately, that goal cannot possibly be reached, no matter how much drilling is done within our borders unless we cut our use of petroleum by more than 75 percent.  
Due to the immense quantity of oil consumed in the U.S. compared with the small amount from all our domestic sources of supply – both existing and yet-to-be-tapped combined – as long as we depend so heavily on petroleum, the U.S. will be at the mercy of foreign suppliers.
Not only will offshore drilling fail to serve the goal of American energy independence, but for similar reasons it will not help reduce price at the pump either.
Under Congressional testimony, experts recently stated that the amount of additional oil to be tapped from new offshore oil wells would – at most – bring a savings of 3 cents a gallon, and no sooner than 10 to 15 years from now when such oil could possibly become available.
Those arguing in favor of more offshore drilling fail to grasp some of the most essential facts about supply and demand for oil as a globally traded commodity:
- The U.S. has less than 5 percent of the world’s total remaining supply of petroleum, while using about 20 percent of it.
- The price of oil is determined by the amount available around the world compared with total global demand for it at any given time.
- Given limited supplies and growing worldwide demand, the price of oil will be rising and amounts remaining will be declining relative to global use.
Therefore, there are only two ways for the U.S. to reduce energy costs and to achieve energy independence:
- Drastically decrease use of oil by converting to mass transportation and patterns of development that enable people to be less dependent on motorized travel.
- As rapidly as possible, transfer to using other forms of energy that are not constrained by supply. The most obvious and abundant sources are wind, solar, geothermal and tidal energy, all of which can be used to produce electricity. For transportation, this would mean converting to the use of electric vehicles and intensifying research in development of new battery technology.
The real costs of various energy sources also deserve closer examination.
We often hear claims about how “cheap” oil and nuclear power are relative to the renewable sources such as wind and solar. By contrast, consider the study done by the International Center for Technology Research.
They found that if all hidden costs were tallied – including U.S. military protection of access to oil fields in the Mideast, medical expenses for treating respiratory diseases linked to burning petroleum products, federal tax credits to oil companies (some $35 billion annually) and environmental protection (even prior to the BP disaster in the Gulf) – the price per gallon of gas would be $12 above the current amount. Imagine paying $14.50 a gallon at the pump.
In other words, if all hidden costs were included in the price of fuel, many uses of petroleum would already be obsolete because the market would support alternatives such as electric cars recharged from renewable power sources.
It is only because these costs are concealed that oil appears to be so cheap and the use of it continues to be defended.
Comparable hidden costs in the form of tax subsidies and other public bailouts are tied to every single dominant form of energy – including coal and, above all, nuclear power.
In a truly free market all existing energy forms would be significantly higher in price than they now are, while renewables would be comparatively cheaper.
Consequently, it is completely misleading to compare lavishly subsidized oil, coal, gas and nuclear power with modestly supported capital investments in wind, solar, and other clean energy sources. Moreover, once the clean energy infrastructure is built, the fuel is literally free. Defenders of free markets cannot justify continuing dependence on conventional forms of energy. 
One last inconvenient fact: corporate spokesmen testified in the recent Congressional hearings on the BP oil spill – including reps of BP and Halliburton.Every one of them said that they could not prevent another disaster like the current one from reoccurring. 
Thus, there simply is no fail-safe way of saving 3 cents a gallon with drilling, and it is unlikely there ever will be.
Responsible energy policy relies on the public being aware of the real costs and consequences of our choices.
 
Kyler is executive director for the Center for a Sustainable Coast on St. Simons Island.

 

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