Amory Lovins' rap on ANWR, petro, etc. - PeachParts Mercedes-Benz Forum

cmac2012 · #1 10-30-2008, 11:31 PM

Drilling in All the Wrong Places

By Amory B. Lovins

DRILLING FOR OIL IN THE ARCTIC National Wildlife Refuge should offend conservatives because it’s insecure, unimportant, unprofitable, and uncompetitive.

Oklahoman ex-CIA Director R. James Woolsey testified against drilling because its “real show-stopper is national se- curity. Delivering that oil by its only route, the 800-mile- long Trans-Alaska Pipeline System (TAPS), would make TAPS the fattest energy-terrorist target in the country— Uncle Sam’s ‘Kick Me’ sign.…Doubling and prolonging de- pendence on TAPS…imperils [national] security.”

“TAPS,” he wrote, “is frighteningly insecure. It’s largely accessible to attackers, but often unrepairable in winter. If key pumping stations or facilities at either end were dis- abled, at least the above-ground half of 9 million barrels of hot oil could congeal in one winter week into the world’s biggest ChapStick®. The Army has found TAPS indefensi- ble. It has already been sabotaged, incompetently bombed twice, and shot at more than 50 times[;]a drunk shut it down with one rifle shot. In 1999, a disgruntled engineer’s sophisticated plot to blow up three critical points with 14 bombs, then profit from oil futures trading, was thwarted by luck. He was an amiable bungler compared with the [9/11]attackers.”

Importance? The Energy Information Administration (EIA) says the Refuge’s limited and scattered oil—its biggest field is one-tenth of a Prudhoe Bay—could start flowing around 2018, peak in 2027 at 3 percent of U.S. use, and temporarily cut oil import dependence by two percentage points and 2025 oil prices by 2 cents a gallon.

Profitability? EIA in May 2008 found today’s quint- pled oil prices won’t yield more or earlier Refuge oil, because drilling costs have soared even higher: Alaskan onshore drilling costs rose 564 percent during 2000–2005, then reallystood up on end. Today’s soaring capital costs for frontier hydrocarbon projects strain even the biggest oil companies’ exploration budgets. In 2001, Refuge oil’s costs and risks were among the highest in the industry’s global portfolios. Today’s higher oil prices don’t change prospects’ relativemerits, better technologies tend to advantage other prospects more, and volatile oil prices raise financial risks in a sour capital market, so Refuge oil still lacks a sound business case.

Competitiveness? My team’s Pentagon-cosponsored 2004 study Winning the Oil Endgame (free at move.rmi.org/oilendgame) road-mapped eliminating U.S. oil use by the 2040s, led by business for profit, at an average cost of $15 per barrel—lucrative at $26/bbl, far more so with today's far higher prices. Refuge oil would be costlier and slower than those efficiency and supply-side competitors, and they’re getting cheaper.

So why press for a project that would create a new and even more vulnerable Strait of Hormuz, depend for decades on a geriatric pipeline (corroding, maintenance- challenged, already past its 30-year design life), yield little oil slowly and riskily, and lose money? Perhaps advocates simply misunderstand the nature of America’s oil problem.

The U.S. has lifted oil faster and longer than any other country, so it’s more depleted, and the next barrel costs more at home than abroad. A market economy offers only three solutions: protectionism, trade, and substitution.

Protectionism distorts relative prices by taxing foreign oil (violating free-trade rules) or subsidizing domestic oil (suppressing efficient use). Both approaches weaken com- petitiveness. Both illogically suppose the solution to domes- tic depletion is to deplete faster—or as David Brower said, “strength through exhaustion.” Oil-less countries like Japan and Germany trade—buying oil from the cheapest sources (diversified and buffered by stockpiles), earning the money to pay for it, and maintaining good relations with exporters. The U.S. buys copiously but lags in earnings and friendships.

By substituting resources that do oil’s tasks better and cheaper, the U.S. can lead the world beyond oil. Face facts: America’s oil output peaked in 1970 and Texas is now a net importer of oil. Let’s get on with what we cando together, better than anyone: saving oil quickly and de- pleting it slowly.

If the U.S. had kept saving oil as fast as it did during 1976– 1985, we wouldn’t have needed any Persian Gulf oil ever since. But now wildcatters are finding new gushers of savings: more than 8 million barrels per day (nearly a Saudi Arabia’s worth) in the Detroit Formation, 0.9 in the Seattle Formation—in all, over 14 million barrels per day of “negabarrels” (saved oil) that is all-American and inexhaustible, climate-safe and secure, costing an average of $12 a barrel.

If oil companies went to the ends of the earth drilling for very expensive oil that might not even be there, while innovators and entrepreneurs found all those negabarrels under Detroit, wouldn’t the old-fashioned drillers be embarrassed, even bankrupt?

Smart developers drill the most prospective plays first. We should all be able to agree about that. If we do it, then the oil we don’t agree about—at least 50 times smaller and several times costlier—will become superfluous, America will be richer and stronger, and the world will be cooler and safer.

Emmerich · #2 10-31-2008, 12:27 PM

Thats really lame. If it wasn't profitable nobody would do it, thats common sense. doh! And the pipeline already exists transporting oil and it is obviously a big target, has been for 30 years, and nothing has happened to it. Blowing a refinery would have more effect and there are a lot of refineries in the world.

Botnst · #3 10-31-2008, 12:39 PM

Don't do something because it might be a target?

Fock that. Don't let some murderous 7th century pinhead dictate what we can or cannot do.

B

aklim · #4 10-31-2008, 01:19 PM

Quote:

Originally Posted by Botnst

Don't do something because it might be a target?

Fock that. Don't let some murderous 7th century pinhead dictate what we can or cannot do.

B

Doesn't Bertran Russell say something about that in his book "In praise of Idleness"? As I understand it, if I invest money in an enterprise and it fails, it will cause suffering. Therefore, don't invest. Same thing here. Don't build it because it might become a target. Go build a bunker so you can protect yourself from bad things. Oh wait. What if the bunker collapses. You will hurt yourself. People might also get hurt building that bunker.

cmac2012 · #5 11-01-2008, 08:54 PM

I don't believe Lovins was saying don't do it. Just that to put our faith in it over much is not prudent.

It would be a lot easier to find an unprotected part of the pipeline than an unprotected refinery. Lot easier to get away with no matter how the attack was carried out.

mwood · #6 11-01-2008, 09:14 PM

If it was only providing 2% of our usage why would anyone attack it in the first place? Doesn't sound like a high value target to me.

P.S. McCain is against drilling there BTW. Yeah, I know, Palin is for it but she's not making the decisions.

cmac2012 · #7 11-02-2008, 05:50 PM

My crystal ball says that eventually we'll drill in ANWR and a few years later the new cry will be to expand mountain top removal coal mining. Our appetite is boundless but supplies are not.

tankdriver · #8 11-02-2008, 09:08 PM

Quote:

Originally Posted by Emmerich

Thats really lame. If it wasn't profitable nobody would do it, thats common sense.

That's not really accurate. It may not be profitable now, but the oil co. wants to lock in the rights now. That makes business sense even though it currently won't be tapped if it is too costly to do so.

aklim · #9 11-02-2008, 10:47 PM

Quote:

Originally Posted by cmac2012

My crystal ball says that eventually we'll drill in ANWR and a few years later the new cry will be to expand mountain top removal coal mining.

Our appetite is boundless but supplies are not.

It's a resource to be used. Nothing more, nothing less.

When that day comes, the party's over. When that will come, nobody knows. No sense in borrowing the problems of the next century and look for a solution today