New York Times Editorial - LisLessons from Prudhoe Bay
New York Times Editorial - LisLessons from Prudhoe Bay
Copyright by The New York Times
Published: August 9, 2006
No sooner did BP announce that a corrosion problem was forcing a shutdown of its pipelines serving Alaska's Prudhoe Bay than prices again shot up, with oil temporarily gaining more than $2 a barrel, to nearly $77, pushing up gasoline prices. Consumers are understandably rankled. But there's nothing necessarily predatory about what's going on - this time.
Refineries and gas stations that are not well stocked rush to buy when there's a sudden shortage, provoking an immediate price increase.
What is predatory is some American politicians' attempt to use the shutdown to realize their drilling dreams. Pete Domenici, the Senate Energy Committee chairman, was quick off the mark pronouncing BP's travails as yet another reason to drill more at home. That's backward, for two reasons.
First, even all-out drilling won't vaccinate the market from unexpected shortages because there simply isn't enough potential domestic supply to dent Americans' demand. The United States holds only 3 percent of global oil reserves, yet uses 25 percent of the world's oil.
Until marketable alternatives to oil are available, the only thing that will truly reduce Americans' vulnerability to oil shocks is reduced demand. According to the nonprofit National Environmental Trust, if Americans had started a 10-year phase-in of 40- mile-a-gallon driving standards in 2001, they would already be saving 267 million barrels of oil a year. That's nearly twice the amount produced annually at the Prudhoe Bay field.
No matter what Domenici and other oil company cheerleaders say, the BP fiasco also a reminder why the fate of America's wilderness should not be put in the hands of the oil companies.
BP has a lot of explaining to do, starting with why the ragged condition of its pipelines went undetected for so long. But it has already reinforced one lesson: True energy security does not entail more drilling, especially in Alaska.
Copyright by The New York Times
Published: August 9, 2006
No sooner did BP announce that a corrosion problem was forcing a shutdown of its pipelines serving Alaska's Prudhoe Bay than prices again shot up, with oil temporarily gaining more than $2 a barrel, to nearly $77, pushing up gasoline prices. Consumers are understandably rankled. But there's nothing necessarily predatory about what's going on - this time.
Refineries and gas stations that are not well stocked rush to buy when there's a sudden shortage, provoking an immediate price increase.
What is predatory is some American politicians' attempt to use the shutdown to realize their drilling dreams. Pete Domenici, the Senate Energy Committee chairman, was quick off the mark pronouncing BP's travails as yet another reason to drill more at home. That's backward, for two reasons.
First, even all-out drilling won't vaccinate the market from unexpected shortages because there simply isn't enough potential domestic supply to dent Americans' demand. The United States holds only 3 percent of global oil reserves, yet uses 25 percent of the world's oil.
Until marketable alternatives to oil are available, the only thing that will truly reduce Americans' vulnerability to oil shocks is reduced demand. According to the nonprofit National Environmental Trust, if Americans had started a 10-year phase-in of 40- mile-a-gallon driving standards in 2001, they would already be saving 267 million barrels of oil a year. That's nearly twice the amount produced annually at the Prudhoe Bay field.
No matter what Domenici and other oil company cheerleaders say, the BP fiasco also a reminder why the fate of America's wilderness should not be put in the hands of the oil companies.
BP has a lot of explaining to do, starting with why the ragged condition of its pipelines went undetected for so long. But it has already reinforced one lesson: True energy security does not entail more drilling, especially in Alaska.
posted by Carlos T Mock at 10:49 AM
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