June 27, 2008
The Trouble With Drill, Drill, Drill
The latest Bush/McCain energy mantra sounds like deja-vu all over again: Increase drilling offshore and in the Alaskan Wildlife Refuge. In seven to 10 years, they assure us, we'll begin to tap those 30 billion barrels believed to be in the ground.
Houston, we have a problem. Current world production has hovered around 31 billion barrels a year and is inching up ever so slightly. Most of the increase comes courtesy of the Saudis. The 30 billion barrels touted by the party of oil barons falls just short of a single year's supply. Meanwhile demand has risen worldwide, and the estimated gap between supply and demand is just under half a billion barrels per year. If we don't find as much new oil as we burn every year, we will eventually run out.
Herein lies one of the problems of the drill, drill, drill mindset. Demand from China and India is on an upward trajectory. Both have sought to expand their middle classes. Both have been succeeding. Major automakers have invested huge efforts in expanding the Indian and Chinese car markets. The huge urban building booms have led to accompanying rises in energy demand. Even as we Americans drive less this year, the decrease is more than matched by the foreign increases.
Assuming that the price of oil comes down a bit in the future, the effect will lead to an increase in our demand. Folks will be able to drive like it's 2007 again. Once demand skyrockets domestically, consumption will go back up. That, in turn, leads to having to find even more oil every year to replace what is spent.
Originally published by For the Monitor.
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