Brian Ertz posted a story several days ago about this topic. This is my take.
In the last week we have had the President’s answer to high energy prices, drill for domestic oil, and develop oil shale deposits.
The primary economic result of this will be to enrich the oil companies even more. They don’t know how to extract oil from shale and produce net energy. It’s like corn ethanol, only worse. It is not a matter of the price of a barrel of oil getting high enough to make oil from this rock containing a petroleum related substance a source of energy.
In addition, environmentally oil shale is probably a worse proposition than Alberta’s devastating oil sands production.
More oil shale leases on public lands will make oil company stocks go up, not stimulate production.
There is, of course, more conventional oil in the ground, but domestic production has been falling since the peak of 1970. More leasing and fewer protective regulations will not alter that fact. It is inevitable.
There is irony, or maybe just propaganda, when they say new “protective techniques” have been developed for drilling and production. It is true that they have. The key point is that when the oil companies and Bush say most of the public lands are “locked up” from development they really mean that they are or will be required to use these protective techniques they so loudly proclaim.
There are few areas with oil potential on public lands where leasing and development are truly “locked up,” to use phrase as it is commonly understood — off limits or prohibited. The Arctic National Wildlife Refuge accounts for most of that.
The President continues to ignore the demand side of the equation. There are no White House proposals for more efficient use of existing supplies. He’s leaving $4/gal, probably soon to be $5, to take care of that; and it is beginning to painfully work.
The United States uses about 20 million barrels of oil a day. Seventy per cent is imported. Now other economies are strongly adding to the demand. The high price is predictable with stable international supply and rising demand (of course, oil speculation causes rapid changes on top of the basic situation).
The immediate key to stable diesel and gasoline prices, or a slowing of the increase, will be price induced reduction of the quantity demanded. It will take place without the Administration’s help. It is inevitable. The only logical alternatives are rationing or flat out shortages.
Fortunately there is a chorus against Bush. It does not seem to include John McCain.
Bush’s oil shale call meets with skepticism. Casper Star Tribune.
Power struggle over oil shale. By Anne C. Mulkern. The Denver Post
Don’t Expect Too Much From ANWR. Wall Street Journal. The WSJ says only a 1% decrease in the price of a barrel of oil after 20 years if the Arctic National Wildlife Refuge is opened up.
Addition June 22. Dan Froomkin writes a lengthy weekly blog for the Washington Post — “White House Watch.” He has a piece out about “Bush’s Oily Embrace.”