I'm just watching the brief speech George Bush gave on his new idea for energy policy (that John McCain started using last week); specifically, that he wants congress to lift the ban on off-shore oil drilling, and in return he would lift the Presidential prohibition on such drilling. He also spoke of oil shale and ANWR, though they seemed secondary. I'm not entirely opposed to these ideas, though with the stipulation that they be performed with strong environmental safeties, and that the American people understand exactly what we get out of this.
What we get is not cheaper gas. At least, not cheaper that you'd ever notice. Most studies I've seen cite something along the lines of a $0.02 decrease in gas prices in about 5 years. It would take time to prospect for the oil, then construction of drilling rig, piping, or whatever is necessary to carry it to refineries, and then we can start pumping. All of which will likely take a couple years, maybe under one year if everything is rushed. Then we run into the problem of refining it. We need more refineries. We have for a while. The newest refinery in America is, I believe, almost 10 years older than I am. So if we get the oil from our own shores, at best it will replace oil coming from elsewhere, as refining is currently a bottleneck in getting usable forms of energy to the market. This is often cited as part of the idea of "energy independence" and as a national security issue. While it may be somewhat true, if America stops buying Arabian oil (or any other foreign oil), China, India, and many other industrializing nations will quickly snap up the difference. That's part of the problem.
There's lots of blame to be had with the price of oil right now. Democrats are inclined to blame George Bush, and his unnecessary war in Iraq, today in his speech, George Bush blamed the Democrats in control of Congress (who came back to power when oil prices were already much raised, as opposed to his own tenure for the entire length of this price spike) and effectively suggested that the voters hold the Democrats responsible for high oil prices. He also put blame on former-President Bill Clinton for the ban on offshore drilling, despite the fact that his own father, the first President Bush, is the one to ban offshore drilling in the first place. Every party in government (with the possible exception of the handful of Independents) holds some responsibility for this. More than once before, oil has spiked to levels which leave people desperate. But they go back down eventually, and no one does anything to solve the problems. There are also a number of very real reasons why oil prices are on the rise.
First, the American Dollar. Our economy of late has been weakening as we skirt recession, lose jobs, deal with inflation (much of which is, itself being pushed by rising fuel prices), see widespread home foreclosures, and spend billions in Iraq on a war that is widely unpopular. The end result is the falling value of the Dollar. With the value falling, all imports become more expensive, and our exports become cheaper. What this means is that the quantity of our exports are rising, as people want more American products at the newly reduced prices. We've avoided a technical recession by merit of our increased exports, preventing by slim margins our economy from having two sequential quarters of losses. Internally, we're suffering the effects of import prices rising. Necessities (food, clothing, fuel, etc.) are rising faster than the rest of the marketplace, due to an inflexible demand curve. Part of the high price of oil and gas right now is simply an extension of the fact that our Dollar is so weak right now.
Second, China. But not just China. India as well, and a number of other nations. Africa is rising somewhat, as well as other countries in Southeast Asia and South America. Specifically, all these nations are industrializing. China and India of course comprise about half the world population (compared to America and Europe's combined 17%), and in the last few years, they've really begun pushing forward with modernizing their nations, building cities, commercial centers, and getting their citizens in automobiles. As more people in industrializing nations try to live like Americans, they'll be taking up more resources that we want in America. This is another reason that we need to set an example on alternative energy, and efficient use of energy; other nations are trying to emulate our quality of life, and if we continue to be as wasteful as we have been, we're setting a very poor example. America uses far more energy per capita than Europe, especially Western Europe, and the newly developed countries are going to be less efficient anyway. So imagine for a moment: China and India, as they try to match our lifestyles, using 10 times as much energy as America...if they're that efficient. Perhaps 12 times as much, or 15. That isn't a level of energy usage that the world can sustain for long. At this point, America needs to show leadership. It's been a while since we showed true leadership. We've spent a while now simply issuing dictates that we seem to expect other countries to follow. We're the greatest country in the world, or so I've been told. It's time that we take the lead again, and develop cleaner, more efficient technologies, and hopefully we can begin to create ones which run on a renewable resource. If all our world's resources are burned up by China and India, we all suffer.
Third is the suggestion that we are now, or soon will be, at the point of peak oil. Peak oil is the point in time where maximum possible worldwide petroleum production is reached. After that point, oil production will begin to drop off, never to recover. We've known for a long time that there's a finite amount of oil under the surface of the earth, but there's little suggestion of what to do once it runs out. Even the optimistic projections put the time for peak oil in the 2030's. Rumors of peak oil approaching seem to be driving prices upward. Some people suggest that peak oil is a lie, and that petroleum is formed by natural processes of the earth, meaning that there is an infinite supply of oil, and that peak oil is simply a conspiracy to make us give up comfortable lifestyles for ones that use renewable resources. Until serious scientists support their theory, they are (like Young Earth Creationists) officially crazy. Don't pay attention to them. Leave it to professionals.
I suppose the moral of the story is this: We need to reduce our overall need for oil, not just foreign oil. Whether that's making lifestyle changes, or just technology changes, it doesn't matter. We can't keep going forever (or quite possibly, even for the rest of my life) on the track we're on. We need to take a leadership role in the world again, and get us on to renewable resources to power our world. A stronger economy will dent the price of fuel, but won't bring it back down to where it was in 2000. Unless we make changes of some kind, we're going to run into a wall on energy, because petroleum is a finite resource. You know, unless these guys make it renewable.
Listening to: Punchline - Flashlight