Goodbye Future, Give Us Right Now

By Gil Smart

Her tone was all but panicked, and if you’ve discussed the issue, you’ve heard the same thing:

“We’ve got to drill!”

It’s the debate du jour this summer, what to do about high gasoline prices – prices, it must be noted, that are coming down even as the debate escalates.

Many, like John McCain, want to “drill here, drill now” – believing that if the oil companies are granted offshore leases, it will bring down gas prices immediately.

Will it?

The federal government itself – via the Energy Department’s Annual Energy Outlook 2007 – has said that drilling on the continental shelf “would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.” Those who back drilling seem to bank on the psychological effect, the message it would send to the market – which, we’re told, would be enough to bring prices down.

But there’s an aspect of this debate being ignored as we pretend that drilling is a panacea. Oil from the contintental shelf will take years to get to market; and by the time it arrives, it may not be enough to offset production declines elsewhere.

The second-largest oil field on the globe is in Mexico, called Cantarell. Mexico’s state-run oil company, Pemex, recently said that it expects production from Cantarell to fall from 1.15 million barrels per day earlier this year to 1 million by the end of 2008. Overall, Mexico – our third largest source of oil – expects to produce a maximum of 2.85 million barrels per day this year. That’s down from 3.08 million barrels per day in 2007.

The largest oil field in the world is Ghawar, in Saudi Arabia – and there’s long been speculation that it, too, is in decline (Saudi oil-field information is a closely guarded state secret). In July, Businessweek magazine wrote of how the kingdom, long considered the “swing producer” (the only major oil-producing nation with spare “capacity,” the ability to pump significantly more oil) simply cannot sustain production at the rate it has promised. And the stuff it does pump out of the ground, increasingly, will be “heavy” crude, which is more difficult and expensive for refineries to process.

Bottom line, even if these new American supplies of oil come on line, we still may have less oil available on a daily basis 10 years from now than we have right this moment.

Now, in one respect declining production elsewhere makes an even stronger case for developing American sources of oil. Yet if global oil production has peaked – as many think it has – the message ought not be that we need to squeeze every last drop of oil from the ground so we can keep driving our Hummers. The message ought to be: We need to trade the Hummer in for a hybrid.

If we have entered an era in which oil, a finite resource, is in shorter supply, and thus more expensive, we need to stop holding onto the past with a death grip – and think about the future.

We need to think about renewables. Drilling can be a stopgap measure but cannot be permitted to be the end goal of any legislation passed to permit it. But as noted last week, it will be. All last week I argued with conservatives who insisted that sure, renewables are fine and everything, but they’re too far off to be viable; we’re better off investing in oil, which could pay off here and now.

And it is that mind-set – both at the corporate level and at the individual level, in the minds of those who panic and say, “We have to drill!” – that ensures that renewable energy remains decades away, that the future will always be jettisoned for the here and now.

And that’s the recipe for a disaster that makes high gas prices seem a downright bargain by comparison.

Gil Smart is associate editor of the Sunday News. E-mail him at gsmart@lnpnews.com, or phone 291-8817.

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