By Ghost of John Brown -
Yesterday, was the first part of this article on the 10th Anniversary of the Senate Democrats defeating the exploration of oil in the Arctic National Wildlife Refuge. Click here to find it. Today, we continue the article and discuss some of the implications.
Dependence on Foreign Oil
US net imports of oil hit it's highest percentage based on consumption in 2005 at roughly 60%. Since that time, our imports have fallen slightly to roughly 50% of total consumption, largely due to the economy. Today, we import about 1,900 million barrels of oil daily from the Persian Gulf. About half of that amount could be eliminated with full production from ANWR alone. (Yes, I know, we don't use all of our oil and there are different types - I'm talking net).
Looking at oil purchases to the Middle East, that amounts to $70 billion per year sent to countries that are often times supporters of terrorism.
On top of money alone that we send to the Middle East virtually every significant conflict that we have been involved in over the past several decades has been because of our need to keep Middle East oil flowing.
In constant 2011 dollars:
First Persian Gulf War $102 billion
Iraq $784 billion
Afghanistan $321 billion
Post 9/11 Iraq $1,147 billion
Look, I'm no liberal peace-nik. However, if you look at it realistically, would our decision to go to war in the middle east have been the same if we didn't rely on foreign oil as much as we do? To be fair, we are in a global marketplace. If the Middle East goes up in a tinder box, our oil prices would rise whether or not we imported oil directly from them or not. We might have made the same war time decisions that we have, but then again, maybe not.
Proven Oil Reserves
Perhaps one of the most disingenuous arguments that is made regarding oil production is that we just don't have very much of it left. The US Energy Information Administration says that we have between 21-30 billion barrels of oil in proven reserves. Given that we use approximately 7 billion barrels of oil annually in the US alone that doesn't seem very comforting. As you might well expect, there is more to the story than that.
Since 1900, our Proven Oil Reserves have never been above 40 billion barrels. However, we've been pumping out over 1 billion barrels of oil consistently ever since the mid 1930's, and for a number of years, over 3 billion barrels per year. For instance, in 1944 we had 20 billion barrels in proven reserves, but since that time, we have produced 8x that amount, or 167 billion barrels. Doesn't that seem contradictory? Not really - here's why.
"Proven" oil reserves are not static. It fluctuates based on a number of factors. Several decades ago, we didn't even know about half of the oil fields that we are currently exploiting. On top of that, there have been technology changes. When was the first time you heard about "fracking", the use of pressure and chemicals to break apart rock that holds oil tightly? We now have 3-D seismic sensing that allows us to see deep below the ground and discover previously unknown oil reserves. Just because we don't know about a particular oil field today doesn't mean we won't be pumping that "black gold" from it in 10 years. Click here for an excellent article on the subject.
Anyone in the current Administration that truly believes that we only have enough oil to last us a few years is either incredibly ignorant of the facts or is purposely manipulating the public for the benefit of a failed policy.
A Proven Way to Bring in More Revenue
By developing ANWR, the Federal Government would be in line for a huge windfall of revenue. Lease sale revenues for the exploration are estimated to be between $4-6 billion and the royalties and taxes at $100/barrel would be between $85 -238 billion. Compare that to the "Buffett Rule" that the President is pushing, which according to the Congressional Joint Taxation Committee would raise only $47 billion over the next 10 years. Of course Congress probably doesn't take into account the fact that many subject to the Buffett Rule would flee the US to avoid the tax, but that's another story.
Jobs, Jobs, Jobs
It is estimated that ANWR alone would generate 735,000 jobs. I bet that's actually more jobs that the President's Stimulus Bill created, and without tax money. DEFINITELY more jobs that have been created pursuing "green energy".
For decades, this country has seen trillions of dollars leave our shore when there is no good reason for it to. We have enough energy reserves to fuel this country's needs for at least decades without relying on foreign oil. The only reason that we aren't self sufficient is because we choose not to. We believe it is better for other countries to get their hands dirty than to allow our own people to get their hands dirty. That's just oil, not to mention the huge reserves we have in coal and natural gas.
We only lack the political will to have a decent energy policy.
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