Houston, We Have an Oil Problem

Posted on: Wednesday, 18 June 2008, 03:00 CDT

By Steve Huff huff.column@earthlink.net

The other day at least three of my patients could not afford the gas to come to the doctor. On the way home I glumly pumped $44.85 into my Mini Cooper. That night I paid $600 for a plane ticket that used to cost $275.

It was a flight to Houston where my sister lives. An oil town, new buildings had popped up across the skyline, old buildings enjoyed facelifts, luxury services flourished and Chevy Suburbans ruled the road. Houstonians haven't seen a boom like this since 1982.

Clearly, $130 a barrel is not bad for everyone.

With profits at record levels, Big Oil feels little incentive to do anything except find more oil. Beyond petroleum? Renewable energy projects have long since degenerated into forays to the Rocky Mountains to wring out shale.

That, I believe, is where windfall oil profits become reprehensible. Sure, a profit margin of 10 percent is respectable for the average company, but we must remember who we're talking about.

Exxon Mobil's profit margin is a "reasonable percentage" of a number so huge that, according the MSN Money's Charley Blaine, it could rival the gross domestic product of the 17th largest economy in the world (Turkey). Renewable, low-carbon sources of energy ought to find a place in a budget like that.

But they haven't. Yes, it's a free country and a free market. Oil companies are thriving, paying their taxes, pleasing their stockholders. Why should they change?

Answer: Because the planetary gas gauge is heading toward red.

Whether oil production peaked in 1972 or will peak in 2050 we are within a human lifetime of declining oil extraction. We also are on the upswing of booming demand from China, India and other developing countries. Oil speculators may re-speculate and the puny dollar may strengthen, but "easy" oil will disappear in the blink of a dinosaur's eye.

As developing countries clamor for fossil fuels, we should work frantically toward the next best thing: electric, hydrogen, biodiesel, cellulosic ethanol, liquid coal or whatever wins out, based on aggressive, well-funded, impartial research.

Detroit is getting that message, but Houston is not. When Big Business looks to immediate gratification at the expense of future development, it's time for the government to take the reins.

Alas, we have a wishy-washy 2009 budget proposal from President Bush that, in spite of his greenish rhetoric of late, proposes more of the same: increased coal, drilling in nature preserves, reduced wind and solar research, reduced mass transit and reduced funds for weatherization of homes. He's fine with rising carbon emissions through 2025.

In addition we have an ineffectual Congress, mired in such non- starters as gas-tax suspensions, Arctic National Wildlife Refuge, offshore drilling and windfall taxes.

Across the ocean, the war in Iraq burns through the equivalent of the Department of Energy's annual budget every couple months. One wonders how vital a role Iraq was to play in Mr. Bush's pre-war energy scenarios.

If we were faced with pure economic pressures I could better understand the argument to let the free market run.

However, far more is at stake. We have grown dependent on countries that are, to put it mildly, unsympathetic to our plight; we suffer the environmental and medical consequences of smog; we are beginning to experience the mayhem of global warming.

By boosting oil production in 10 or 15 years by 1 or 2 million barrels per day, we will merely extend our environmental and climate woes and will create a false sense of energy independence.

Instead, we must focus our resources and enthusiasm on the development of low-emission, domestic energy sources: solar, wind, water and, yes, nuclear. Coal is abundant, but it is carbon. Only when it can be burned cleanly should we increase its use.

Conservation. Americans will curb their energy cravings sooner through prudence, or later through necessity. I'm hoping for sooner. Carbon capping, trading and taxation seem a reasonable way to induce industry to do the same.

In spite of common perceptions, the United States consumes more oil and emits more carbon dioxide than any other country. The next administration needs to work with the next Congress to set an example for the world. Our short-term pain will give way to future generations of improved health, wealth and security.

Huff, who lives in Patrick County and practices family medicine, is a columnist for The Roanoke Times.

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