The Presumption of Buggy Whips
By Richard Girard
Much of the discussion during this election, directly and indirectly, concerns the future of energy production and use in our nation and the world.
The United States has exhausted much of its vast natural resources in the Twentieth Century's two World Wars. Our vast deposits of hematite ore (65% iron) in northern Minnesota were all but exhausted by the Second World War, leaving us with the far less rich magnetite ore (22% iron) as our primary source of iron. Iron and its daughter steel are the skeleton upon which modern industrial society is built.
Petroleum has been the lifeblood of our industrial society for nearly a century. The United States used almost one-third of its petroleum reserves in the Second World War. As T. Boone Pickens points out in his ads, by the early 1970's we had to import almost one-quarter of our total oil requirement. That percentage has risen to approximately seventy percent today. About one-half of our monumental trade deficit is directly related to the oil and natural gas we import, primarily from Canada, Mexico, and Venezuela.
George W. Bush, John McCain and the other oil lobby apologists are demanding the development of oil fields in places like the Arctic National Wildlife Refuge (ANWR) and the outer region of our continental shelf, in order to reduce the current outrageous gasoline prices. What they neglect to mention (besides the minimum of five years between approval of exploration and the first oil reaching the gas pumps) is that even today, not all of our current domestic production is used by the United States itself. Much of the oil from the North Slope of Alaska is exported to Japan and the Far East.
If we develop these fields, we have no guarantee that the new production from ANWR and the outer continental shelf would actually go to consumers in the United States. We must also take into account at least two other factors when considering drilling in these new areas: refining capacity and potential ecological disaster.
Oil refineries in the United States are operating at approximately 89% capacity at last report. While no new refineries have been built in the last twenty years, existing refineries have been modernized and had their production capacity increased. The oil companies have no real desire to build new refineries, since control over capacity at their existing refineries permits them to manipulate production to their own advantage. Put three or four refineries “down” for maintenance, and you can raise the price of petroleum products an additional ten percent or more. This also means that even if we had additional petroleum to refine from ANWR or the continental shelf, we lack the capacity to do so.
The current outrageous gasoline prices are not due to a lack of supply: There are no lines at the gas pumps or limits on the amount of gas you can purchase. The current price outrage is due solely to greedy, immoral speculators who think that wealth forgives them all of their sins against the rest of humanity. Oil futures are traded on a world-wide commodities market. Speculators are taking advantage of thirty years of escalating American deregulation of its financial markets, to push the price of oil futures through the roof.
The real reason the oil companies want these new leases to “explore” for oil in ANWR and the outer continental shelf, is it increases the value of their stocks, whether they drill or not. These leases are assets they can carry on their books, and they can also be used as collateral for loans, even if the land is not currently producing oil. Unlike their brethren in the coal industry—who are required to use the land they lease from the government or lose their lease—the oil barons can hold on to their government leases indefinitely, whether they use them or not.
We must also consider the ecological fallout of these new leases. I'll start with the Arctic National Wildlife Refuge, which is one of the most beautiful and pristine pieces of wilderness in North America. It is extremely fragile arctic tundra, whose ecological balance is easily disrupted, and nearly impossible to repair. Large herds of caribou (numbered in the hundreds of thousands) use ANWR and its vicinity for summer grazing. These caribou in turn are the primary food source for wolves and other predators when they migrate south in the winter. These caribou are a linchpin for ecological systems throughout much of Alaska and Northwest Canada. Disrupting ANWR will disrupt more than one-quarter of a million square miles of Arctic ecological systems.
As for drilling on the outer continental shelf, this is a disaster waiting to happen. Hurricane Katrina caused numerous spills at existing oil rigs in the Gulf of Mexico. We did not hear about it, because of the tsunami of human misery in Louisiana and Mississippi. Our oceans are already suffering from numerous “dead zones,” areas where there is no oxygen to sustain life. Combine this with near continental masses of floating plastic and garbage, and I for one do not want to risk additional further, long-term damage to our world's oceans.
I have nothing against making a profit, but everything against profiteering. I define profiteering as taking advantage of other people's misery and misfortune to enrich oneself. The current price of gas at the pump is both outrageous and indefensible. Those prices are easing slightly now, because the oil branch of the robber barons is hoping that a decline in gas prices will ensure a McCain victory in November. I am hoping that We the People are smarter than that. If we are not, I will guarantee you that a McCain Presidency will see gasoline climb back to $4.00 per gallon within a year, and around $5.00 per gallon before the next Congressional election, unless we go into an economic depression.
The war against and continuing occupation of Iraq has always been, and continues to be, about the control of the second largest proven reserves of oil on the planet. George W. Bush, and his gang of thugs, do not want to return control of Iraq to the Iraqis until they are certain they have control over Iraq's petroleum for the foreseeable future. We are beginning to learn that the nut cases were right: the seizure of the Iraqi oil reserves were a cornerstone of George W. Bush's foreign policy from day one. By controlling those Iraqi reserves, Bush—and McCain if he is elected—ensures that oil continues to cost more than $70.00 per barrel. This in turn makes their friends in the Saudi royal family and the Big Five oil companies wealthy beyond the dreams of avarice.
All of the discussions about drilling misses our most important, long-term consideration about petroleum: it is too important a commodity to waste by burning in the air to fuel our transportation.
I remember reading, some twenty years ago, that future world food production was more dependent on energy than on acreage. We depend on petroleum for thousands of items in our everyday life: clothing, plastics, pharmaceuticals, fertilizers, lubricants, etc. We in the United States, have a tremendous opportunity to lead the rest of humanity into the next stage of our planet's economic evolution, based on decentralized, non-hydrocarbon energy and transportation industries.