Thursday, June 05, 2008

The Neverending ANWR Oil Song And Dance


George Will, in a rather typical display of poor thinking, argues against the dastardly environmental concerns that keep our nation from fully exploiting and depleting all of our oil and natural gas reserves.
Rising in the Senate on May 13, Chuck Schumer, the New York Democrat, explained: "I rise to discuss rising energy prices." The president was heading to Saudi Arabia to seek an increase in its oil production, and Schumer's gorge was rising.

Saudi Arabia, he said, "holds the key to reducing gasoline prices at home in the short term." Therefore arms sales to that kingdom should be blocked unless it "increases its oil production by one million barrels per day," which would cause the price of gasoline to fall "50 cents a gallon almost immediately."

Can a senator, with so many things on his mind, know so precisely how the price of gasoline would respond to that increase in the oil supply?
Will instructs us,
One million barrels is what might today be flowing from ANWR if in 1995 President Bill Clinton had not vetoed legislation to permit drilling there.
Er, yeah, "might". Now I'll give Will as much credit as he's due for not tossing out a certain figure, particularly on the heels of his attack on Schumer for asserting a projection as fact. But that isn't much, given that the rest of Will's column treats his own projection as a certainty.

Will proceed to attack Schumer, and everybody else who has opposed ANWR oil drilling, as being "complicit in taking $10 away from every American who buys 20 gallons of gasoline". This, of course, is raw fiction. Will pretends that world oil production - on the whole, and by individual nations, can only rise. Will pretends that a nation like Saudi Arabia won't limit its own output, well below capacity, in order to protect its own reserves and maximize its profits - yet if Saudi Arabia weren't doing exactly that, Will's contentions would be even more absurd.

Let's take a moment to consider reality:
President Bush used a private visit to King Abdullah’s ranch here on Friday to make another appeal for an increase in oil production that might give American consumers some relief at the gasoline pump. The Saudis responded by announcing they had decided a week ago on a modest increase of 300,000 barrels a day.
That's Saudi Arabia snapping its fingers and adding to the marketplace 30% of the daily oil production Will optimistically proposes might be drawn from ANWR.
The White House said the increase would not be enough to lower gasoline prices, which are nearing $4 a gallon, and industry analysts called it mostly symbolic.
Meanwhile, what else is happening?
The International Energy Agency, which advises industrial countries, recently reduced its estimates for oil demand growth this year, with consumption expected to fall in the United States, Europe and Japan. But demand should still rise by one million barrels a day thanks to growth in China and the Middle East.
Let's refer back to Will:
One million barrels is what might today be flowing from ANWR if in 1995 President Bill Clinton had not vetoed legislation to permit drilling there.
Bill Clinton? Oh yeah - the guy who was in the White House before ol' whats-his-name, who apparently bears no responsibility in Will's mind for failing to open ANWR to drilling despite having Republican majority in both houses for six years. Will seems intent on flushing the entire G.W. Bush Administration and its record down the memory hole.

The projections for increased world demand for oil highlight another fallacy of Will's argument. He forgets that oil is priced according to a global marketplace. Demand for oil has not stood still since 1995 - it has increased substantially. Saudi oil production has not stood still since 1995 - it has increased by over a million gallons per day. But in some years it decreased - Will deludes himself if he believes that Saudi output would be unaffected by new production in ANWR. (And if he doesn't believe that, but is arguing it anyway....) It's these realiities that lead to projections such as,
If Congress were to open up the Arctic National Wildlife Refuge to drilling, crude oil prices would probably drop by an average of only 75 cents a barrel, according to Department of Energy projections issued Thursday.

The report, which was requested in December by Sen. Ted Stevens, R-Alaska, found that oil production in the refuge "is not projected to have a large impact on world oil prices."
Will complains,
America says to foreign producers: We prefer not to pump our oil, so please pump more of yours, thereby lowering its value, for our benefit.
You would think that a self-professed conservative like Will would embrace that approach for as long as it works. But Will appears to prefer a model whereby we pump every drop of our own oil, thereby lowering its value, while allowing Saudi Arabia to hold larger reserves.

At this point, we can abandon all pretense that Will was trying to construct an honest argument. The one source he cites gives him away:
In his book "Gusher of Lies: The Dangerous Delusions of 'Energy Independence,' " Robert Bryce says Brazil's energy success has little to do with its much-discussed ethanol production and much to do with its increased oil production, the vast majority of which comes from off Brazil's shore. Investor's Business Daily reports that Brazil, "which recently made a major oil discovery almost in sight of Rio's beaches," has leased most of the world's deep-sea drilling rigs.
Bryce has been singing the same song for years. To some degree he has a point: We cannot sustain our present way of life without importing energy, other energy sources are decades away from being viable alternatives, and we shouldn't disadvantage ourselves by focusing on domestic energy production rather than seeking the cheapest energy sources in a global commodities market.

Bryce is not as myopic as the title to his book makes him sound, and advocates energy research (particularly new battery technologies for storing large quantities of electricity), solar and nuclear energy. But that part doesn't interest Will - who knows if he really even read past the title - who appears to embrace it as an endorsement of unbridled energy consumption. But Will's perception is once again lacking - the thesis of his column is premised upon the very concept his sole source decries as a myth.

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