A Millennium Late and a Barrel Short

-----Original Message-----
From: Kimberly
Sent: Nov 10, 2004
Subject: Bush Looking Anew for Alaska Oil Drilling - EarthLink - Political News
Hooray! Oil costs will start to come down as we make progress!

Don't count on it. Oil is a non-renewable resource which will continue to go up in value and price. Exploration in Alaska is expensive and the extent and location of the reserves is unknown. Expect to pay more for gas from Alaska. There is also no evidence that sufficient oil can be drilled in Alaska to free us from our dependence on foreign oil which is the real problem. We still need to intervene in the Middle East in order to secure our oil supply.

Iraq has the second largest (after Saudi Arabia) oil reserves in the world and the exploration is already done and the reserves proved. We just need to set up an infrastructue in Iraq to get the oil out. The catch is that as long as the US intervenes in the Middle East, we will be targets for terrorists who find foreign intervention upsetting (to put it mildly). We can't stay in Saudi Arabia to secure the world's largest oil reserve because the peninsula is considered holy to too many of those Muslim folks.

Neo-cons thought that Iraq would present a good alternative to Saudi Arabia, but their strategy is running into some unexpected resistance and the US is drawing the ire of Islamic militants who suspect that the US wants to set up a permanent military presence in Iraq and export her oil to theUS using US oil companies, US workers. Their suspicions are in fact true, but we're doing it in their best interest which is why Rumsfeld, Cheney, Wolfowitz, et al can't understand why there is an insurgency going on.

I am forgetting about the increase in oil consumption overseas. In October, Greenspan noted in a speech that "Adding to the difficulties is the rising consumption of oil, especially in China and India, both of which are expanding economically in ways that are relatively energy intensive."

Greenspan along with many other economists (both conservative and liberal) believe that "... much of world oil supplies reside in potentially volatile areas of the world. Improving technology is reducing the energy intensity of industrial countries, and presumably recent oil price increases will accelerate the pace of displacement of energy-intensive production facilities. If history is any guide, oil will eventually be overtaken by less-costly alternatives well before conventional oil reserves run out. Indeed, oil displaced coal despite still vast untapped reserves of coal, and coal displaced wood without denuding our forest lands."

By "reducing energy intensity", he means using less oil. This all means that oil prices will remain high due to steadily increasing world demand, but the high prices will accelerate the pace of developing alternatives.

Alaska doesn't matter one way or the other. By the time Alaska can come online, we may not need it anymore. The benefit of development in the Alaskan wilderness is short term and temporary job creation during the exploration and building phases, and short term windfall profits to the owners of a very few companies. There are no long-term benefits to development in Alaska. We probably don't fully understand the long-term risks of developing Alaska. Some try to suggest that the risks are only to the environment, the wildlife and man's spirit; however, we are learning a little late about the connectedness of the various elements that make the Earth uniquely life supporting.