Please visit this sponsor!!

Wednesday, March 16, 2011

OIL THAT IS, BLACK GOLD, TEXAS TEA

Did you miss me? I tried to quit blogging. I really did. I can't do it. So here we go again -

Oil. We need it. A 42-gallon barrel of oil produces just over 19 gallons of gasoline. The rest goes into products we use everyday. For instance, those big fat tires on your car contain about 7 gallons of petroleum each. The grand aspirations of the current administration, Al Gore, and countless organizations to break our “oil addiction” will not work. Oil is in nearly everything we use, and it is used to get everything to its point of use. The monitor you're reading this on contains petroleum. It was built in a factory by machines that were made with petroleum and are lubricated by petroleum. The same holds true for the ships, trucks, forklifts, aircraft and cars that took your monitor from the factory to the warehouse to the store and finally to your house. The same goes for your keyboard. And for the paint on your walls, your carpet, the spatula you cook your food with, your toothbrush and toothpaste, clothes, pens and ink, fishing lures, CDs and DVDs, nylon, dentures and denture adhesives, hair coloring, dice, mops, roller skates and of course - petroleum jelly. Oh, and about 6,000 other items... all of which CONTAIN petroleum.

To say we are “oil addicted” is incorrect. We are oil dependent, and yes, there is a difference. Are you “addicted” to oxygen? To food? Of course not. However, you need them to survive. The same holds true with petroleum and and our modern industrial society. There is not a room in your house that was not built with petroleum and does not contain petroleum. Face it folks, you even consume petroleum. Artificial colorings and flavorings, and the preservatives BHA, BHT, and TBHQ are made from petroleum (and if you're a health-food nut, remember that those three preservatives can be listed in the ingredients as “anti-oxidants” since that's how they preserve). Mmm... oil.

The phrase “energy independence” has been a part of the American political vernacular since the oil embargo of 1974. But what have we done to become independent? We established reserves, but beyond that? Nothing of any real significance. Now the folks on Capitol Hill are talking about tapping into our Strategic Petroleum Reserves. Bad idea. The SPR was created in response to the aforementioned embargo. Bush Two finished filling them up to their 700+ million barrel capacity. That's a lot of oil, right? NOT! First, it's crude oil which means it still has to be refined, and less than half of it will be gas. Second, most – about 60% - of it is “sour” crude which means it contains sulfur. The sulfur has to be processed out before the crude can be refined, which equals? You guessed it! A higher production cost that will be passed right on to you. Sour crude is better suited for diesel fuel and fuel oil. Third, it would take about 13 days from the time Obama orders the use of the reserves for it to get to the pumps... remember, it's crude oil right now, not gasoline. Fourth, the SPR is an insurance policy against loss of supply, not high prices. Even at approximately 724 million barrels, the SPR could only support the US for about a month. We can not chew up our insurance policy to save a few cents - literally - at the pump, especially in times as tumultuous and unpredictable as these.

Don't even get me started on ethanol. How ridiculous have we become when in the face of higher food prices and potential food shortages we burn the food!? And how is that food grown? Well lets see, we have a bunch of machines, one to till, one to plant, one to spread fertilizer and another to spread bug killer (both chemicals are made with petroleum), one to harvest and finally one to catch the harvested crop. Each of those machines are made with, are lubricated with and burn petroleum. This is true of all of our food though, not just the corn that we'll burn up (by the way, did you know we're going from 10% to 15% ethanol?). The food that is lucky enough to get eaten will still need to be packaged, sent to distributors, then to warehouses, and then to your store. Then you'll put it in a plastic bag in the produce department, and after you pay for it with a plastic card they'll put that plastic bag inside another plastic bag. Do you see where I am going with this? We NEED oil.  We are a carbon-based lifeform living in a hydrocarbon-based society.

Yes, we are making strides towards alternative energy, and I am excited about them. I truly am. I talk to my wife regularly about geothermal heating and cooling, solar shingles, solar hot water and solar water pumps. I think wind energy is an excellent way to augment power production in some areas, just as tidal stream generators can be effective in others. I love the idea of renewable and sustainable energy. But as a thinking rational human I also realize that we are decades, if not centuries from the time when we will no longer need petroleum and other fossil fuels. Nearly all of these hybrid cars on the road plug into a coal burning power plant every night, and I am relatively certain there is no way to turn wind by-products into an artificial limb or siding for a home.

Environmentalists have a valid concern. I am not discounting their message. But they need to realize that their message is transmitted through thousands of miles of wires that are insulated in petroleum. We have generations of work to do before we can realistically do away with petroleum. Also, we can not block drilling in our country and expect the rest of the world to sustain us.  Not without paying through the nose for it. The high price of gas we are paying, which directly increases the cost of all goods and services, is the result of our own policies. We refuse to drill where we know oil exists. We impose moratoriums on established supplies. In a knee jerk reaction to a horrible accident our president has increased energy dependence rather than energy independence. I won't even go into the fact that he ignored a court ruling that overturned his ban on deepwater drilling by simply issuing a second moratorium (he likes to ignore the courts).

This country and it's surrounding waters have incredible amounts of untapped oil just waiting for us. We have people who need work, we want to be energy independent and the nation needs more revenue. North Dakota is producing 50% more oil than three years ago. The result? Unemployment in the 4% range, the McDonald's in Dickinson offering a $300 signing bonus, and the state expecting a surplus budget this year. This seems like a no brainer to me. We are ignoring a resource that could be a game changer for our society and our economy. Less regulation is what is needed, not more.

I hope we continue to explore new “clean” energy sources and develop better technologies to increase their efficiency. At the same time I expect us to continue to explore and develop our petroleum technologies. Rather than dismissing petroleum as bad, perhaps our focus should be on how to make it better. I'm not sure how the president thinks a fan in a field is a viable energy source, but he doesn't think we can makes gas burn cleaner and more efficiently, and also drill it safer and more efficiently.

The government must loosen its stranglehold on petroleum exploration and recovery. It has has to encourage R&D and the spirit of competition between companies in the arena of petroleum. We need to explore all of our options and exploit all untapped resources. Please call or write your Congressman and the president and tell them it's time.  Time for us to stop paying other countries for what we can get ourselves.

Just a footnote - I will never take a person seriously who rails against “big oil” as long as they live in a house, drive a car, wear clothes, or eat food. If you do ANY of those things... you're “addicted,” too.

Please comment below and share this blog with your friends. Share My2Cents

4 comments:

  1. Nice blog Mike. I like it. I've always enjoyed your rants on facebook.

    ReplyDelete
  2. Why does big oil need tax breaks from the U.S.? They cannot make a profit without the American taxpayer subsidizing them?

    ReplyDelete
  3. I suppose it's a matter of perspective. What you see as a tax break I see as investing. True, the oil companies make a lot of money. They also spend a lot of money. Exxon Mobile alone employs over 100,000 people. Granted they aren't all Americans, but they directly employ over 100,000 people. Indirectly, oil companies are responsible for MILLIONS of jobs in the United States. Why would anyone want to withhold money they can use to continue to do that? The company pays taxes on their profits and on the materials they purchase and their employees pay taxes on their income. How much revenue are the oil companies already creating both directly and indirectly? I'm also not aware of a single household or business in the country that isn't dependent on oil to succeed. The American taxpayer is not subsidizing the oil companies... we're living off of them. Instead of feeling like you're entitled to the fruits of their labor, how about you just thank them every time your car starts, and revel in the knowledge that millions of Americans will sleep in a bed tonight with a full belly and a roof over their head because of “Big Oil.”

    ReplyDelete
  4. Profit and return on investments are of course cornerstones of our capitalist free market, but Exxon Mobil reported $30.46 BILLION in profits for FY10. The way profit was explained to me (and I'm no economy major so maybe this is overly simple) was that is what you have left over after expenses. Expenses like exploration, drilling, transport, refining, delivery to your corner station, payroll for your employees, marketing/advertising, congressional kickbacks... ad nauseum. So now that all the noble infrastructure building and maintaining is done and paid for how about we discuss price point at the pump. $30.46 BILLION in your pocket sounds a little less like robust free market and more like piracy or extortion of a captive audience to me, honestly where else are you going to go to make the WHOLE system work? Whale blubber?? Don't rightly think the WWF (the one's with the panda logo, not the crowd in spandex and stock in human growth chemicals) will stand for that!

    What's the solution? You hear a lot about the "new hydrogen economy" but the guess where they currently plan on getting most of their "clean, evironmentally friendly" hydrogen... Oil extraction! No escape from the "Big Oil" crutch there. I don't honestly think a true alternative with be found until we are completely (or nearly so) out of oil. Nothing drives change if there is no PROFIT.

    ReplyDelete