Thu, May

Oil and Lemonade

LEANING RIGHT - We are all truly blessed to live in the greatest country ever that unites diverse ethnics, religions, colors, income levels, skills, trades, occupations, and aspirations.

We do however share commonalities in that we all smile the same and we all object to other people’s hands in our pockets. 

The immediate observation is to ask why we don’t object to OPEC and the other world’s oil producing countries having their hands in our pockets all the time. It doesn’t make any sense when you consider that we have more oil right here in the United States than all the rest of the world combined. An examination of this dilemma will illustrate.   

Oil is all right outside our front door. The former President of Shell Oil, John Hofmeister, currently the head of citizens for Affordable Energy, a non-profit group, aims to promote sound U.S. energy solutions  for the nation. 

Mr. Hofmeister’s plan would require U.S. oil production to increase from around 6 million barrels per day up to 10 million barrels per day. Mr. Hofmeister skepticism that oil supplies could expand fast enough to meet growing demand, and that the consequence would be higher oil prices which would result in stagnant growth. 

If we stay on the current trajectory under current plan expectations, and if the United States maintains its current off-limits position on offshore access, on the Arctic, and on Colorado oil shale in the Piceance Basin, and the continued diminishing of access to federal lands, then nothing will happen. 

On the other hand he paints a scenario of not only significant economic prosperity, but actually significantly increased domestic supplies of energy in the United States along the following lines: “If we could ever get past the perversity of the partisanship that we see in the Congress, if we could ever get past the aspirational headlines put forward by politicians — with actually no plan behind the aspirational headlines — if we could ever stop misleading the American people into what we are not doing, by suggesting we are doing what we are not doing, I believe we could lead a bonanza of domestic natural resource production which could fuel an economy even if prices in the short term remain high.” 

And what that looks like is the following, and it addresses the transportation dilemma of cost and availability that I would otherwise see in this decade: And what it would consist of is setting a national objective in the United States to get back to the production level of the 1970s and 80s of 10 million barrels a day. We are currently at 6, we’re up from 5 four or five years ago, now we are at 6. We should set a national goal of a 10 million barrel a day production target that we could achieve in the next 10 to 12 years if we were serious about it.


Reduce our imports by 5 million barrels a day by using natural gas as an alternative to the internal combustion engine oil products – current system. And that is to start using compressed natural gas for trucking to displace 2 million barrels a day of imported oil. That would take 14 or so bcf (billion cubic feet) of additional natural gas. The other 3 million barrels of imports could be eliminated by virtue of converting natural gas to methanol for flex fuel engines to the tune of about 16 bcf per day.


That’s 30 additional bcf, up from 60 to 90. So 10 million barrels oil is a goal; 90 bcf is a production target for natural gas, where 30 bcf would be converted to either CNG or methanol to displace imported oil.


Meanwhile, continue the journey toward higher efficiency automobiles and continue the journey to more electrified vehicles as well, both batteries and hydrogen fuel cells. And I think we could go a long way in the next 10 to 12 years and beyond, particular beyond the next 10 to 12 years for electrified vehicles to bring a rational sense of well being to the transportation system of the country with more affordable prices because of the use of natural gas and less imports, and because of the increased electrification and less demand for oil. But that would take rational, thoughtful, pragmatic planning, which is 180 degrees from anything we have seen from a public policy standpoint.


Leonardo Maugeri of the Harvard Business School along with every other institute and study group all flatly point out that the United States has more oil than the rest of the world combined. The issue has been studied to death. Now all we have to do is start drilling.


Why hasn’t any of this happened? It is not necessary to focus on Reverend Jeremiah Wright who defiled the United States for 20 years while President Barack Obama sat there. The name Bill Ayers keeps cropping up.


President Obama announced his candidacy in Ayer’s living room. But who exactly is Bill Ayers. Well he has had several arrests for several political issues. He is not an individual who champions good for the people of the United States.


Therefore do not blame President Obama for failure to champion the best for us.


In any event if you are in the neighborhood, hopefully not after having used half a tank of gas to get here, stop by to share a smile, enjoy a tall glass of lemonade made from lemons out of our garden, and we can talk and laugh for a long, long time on the front porch.


Just keep your hands out of my pocket and remember that when we start drilling we will start enjoying the greatest prosperity ever imagined.


(Kay Martin is an author and a CityWatch contributor. His new book, Along for the Ride, is now  available.)






Vol 11 Issue 64

Pub: Aug 6, 2013