oil — VOICES for REASON

To me, the most interesting part of a recent New York Times feature describing corruption in the relationship between certain oil companies and the Minerals and Management Service is a passing reference to what the Gulf Coast was like before deepwater drilling.

For years, fading interest in the Gulf of Mexico had punished the local economy and left Louisiana to mourn its “Dead Sea.” Now, rising oil prices and new technology were setting off the deep-water version of a gold rush.

We have heard endless stories about how the oil spill has “ruined” the Gulf–the same Gulf the administration is now admitting it is already safe to eat from. But while the dangers of drilling accidents have been overblown, the fundamentally productive, life-giving nature of oil drilling has been largely evaded. We should remember that it was oil drilling that brought the “Dead Sea” to life.

Image: Wikimedia Commons

As an advocate of laissez-faire capitalism and a champion of America’s abundant oil use, it is rare that I get taken to task for being too tame in my defense of oil and in my expose of oil’s anti-industrial opponents.

But a superb letter to the editor in Tuesday’s Wall Street Journal by Paul Gilmour does just that. Responding to my point in my op-ed last week that oil spill hysteria ignores that “large amounts of oil enter the ocean every year through naturally occurring oil seeps,” he writes:

the situation is even more idiotic than the one Mr. Epstein describes.

Most of the oil in the Santa Barbara Channel and on nearby beaches comes from natural leakage of buried reservoirs, not man-made spills. Europeans who visited the area in the 16th century reported the sea was covered by a “sheen of oil, visible for as far as the eye could see,” and that local Indians waterproofed baskets and canoes with tar collected on beaches. It is estimated that, yearly, these seeps release the equivalent of one third of the oil spilled by Exxon Valdez.

Seeps of oil are common in coastal California, having given rise to such place-names as Oil Creek, Oildale, Brea (Spanish “tar”) and Coal Oil Point. By far the best known is the La Brea Tar Pits, located in downtown Los Angeles.

Wouldn’t it be nice if reporters actually told us this stuff, instead of only reporting things that reaffirm to them that oil is an “addiction”?

In today’s Wall Street Journal, I have an op-ed piece entitled “Obama Follows Nixon on Oil Spill.” It explains how Richard Nixon’s anti-oil, anti-development response to the Santa Barbara oil spill of 1969 helped bring about an energy crisis–and how President Obama’s policies are ominously similar. Read it here.

In general, I have found that studying the history of oil is essential for understanding the present world. For example:

• How did so much of the world’s oil end up in the hands of dictators even though it was discovered by citizens of free countries?
• How is the history of oil connected to the history of terrorism?
• What policies led to the greatest amount of production and innovation, and what caused the least?

I cover these and many more questions in my course “The Triumph and Tragedy of the Oil Industry.” Listen to it online or download in MP3 here.

Image: Wikimedia Commons

My colleague Alex Epstein has published a new commentary at Forbes.com, “Three Myths About Oil.” Noting that the average American consumes three gallons of oil a day, Alex observes that nevertheless,

… oil’s detractors call it an addiction, downplaying its enormous benefits as fleeting pleasures that will necessarily bring long-term pain and destruction. An oil-based economy will inevitably collapse, they say, because oil is finite and will run out, because foreign oil causes terrorism, because oil, as a fossil fuel, will bring about climate catastrophe. Let’s examine these myths about oil.

Read the whole thing.

At a time when hostility against the oil industry is at a high, while politicians and editorial-office heroes call for “ending our addiction to oil,” it’s important to reflect on why oil is so valuable—so “addictive,” in the terminology of our time.

A couple months ago, I blogged that “Most of us think of oil simply as the stuff that puts gasoline in our car. But oil, thanks to the ingenuity of the oil industry, does so much more. For one, it’s the building block for thousands of petroleum products—everything from Blu-Ray discs to asphalt to stitches to lipstick. And it provides the safest, most powerful, most convenient fuel, not only for automobiles but for the freighters, jets, trucks, and industrial machinery that power our global economy. Oil makes every aspect of our lives better.”

In that post, I illustrated how oil was vital in making possible something as basic as an affordable, healthy breakfast. The other day, I witnessed firsthand how vital oil is in making possible a safe, effective hospital. Sitting in on a highly advanced surgical procedure, I was struck by the skill of the surgeons, the stunning advances in medical technology (almost all of which involve petroleum components), and—what I want to talk about today—everyone’s commitment to maximize safety by keeping the environment as hygienic as possible by using oil-based products at every turn.

One of the virtues of petroleum products, including plastics, is that they are incredibly resistant to bacteria, moisture, germs. Another is that they can very easily be made impermeable, protecting whatever you want from whatever you don’t want to contaminate it. They can also be made incredibly cheaply, which allows for disposable products that are never used by more than one patient.

All of this was at work in the operating room. Just about all the furniture—the chairs, the cabinets, the drawers, were made of or coated by petroleum to keep them sanitary. The patient was lying on the bed, connected to durable, flexible plastic (oil) tubes that safely delivered food, coming from a sealed plastic (oil) bag that securely stored it. Another oil tube was designed to vacuum excess fluids. There were disposable foam (oil) cradles to prop up the patient’s arms or legs if necessary—made of oil to be disposable. The disposable, sterile gloves were either latex or synthetic—i.e., made of oil. Ditto for the disposable surgical masks and head-coverings. The doctors frequently needed to throw biological material away—which, thankfully they could do sanitarily with plastic (oil) trash-bags that could be taken away leaving no trace of their hazardous contents. Imagine if these products would have been made of wood, cloth, or metal. Can you imagine the corrosion, the bacteria-traps, the health risks? Infection used to be a highly common and deadly product of surgery—and lack of petroleum products was a big reason why.

Thanks both to the medical profession and petroleum products, you can have every expectation of your next trip to the hospital being a safe one.

Source: Wikimedia Commons

As Americans ponder how to react to the BP disaster in the Gulf of Mexico, with many calling for massive restrictions on oil drilling, it’s important to know the story of the Santa Barbara oil spill of 1969–and the disastrous American reaction to it.

Daniel Yergin summarizes the spill and the ensuing outcry in The Prize:

in January 1969, the drilling of an offshore well in the Santa Barbara channel encountered an unexpected geological anomaly, and as a result, an estimated six thousand barrels of oil seeped out of an uncharted fissure and bubbled to the surface. A gooey slick of heavy crude oil flowed unchecked into the coastal waters and washed up on thirty miles of beaches. The public outcry was nationwide and reached right across the political spectrum. The Nixon Administration imposed a moratorium on California offshore development, in effect shutting it down.

The Santa Barbara outcry and ensuing restrictions on drilling started right before the 1970s…which turned out to be one of the most traumatic decades energy-wise in recent history. The decade was notable for scarce energy, the OPEC oil embargo of 1973, gasoline shortages, and the belief that energy would never again become abundant and affordable. But underlying all that were the post-Santa Barbara domestic restrictions on energy development, particularly offshore drilling. American companies had had plans to develop plentiful oil reserves in Alaska and off the coast of California, reserves that would greatly increase our flexibility in a then-volatile international oil market, but an oil spill in Santa Barbara changed all that.

Yergin writes:

However great the need for oil, the leak increased opposition to energy development in other environmentally sensitive areas, including the most promising area in all of North America, the one most likely to stem the decline in American production….Alaska.

Today, we face a similar situation. An offshore oil spill–a very unfortunate, very rare, but still inevitable part of offshore drilling–is empowering the forces who are against offshore drilling, period, even though such drilling is a means to a resource indispensable to our standard of living.

And to learn the story of the 1970s in detail, I refer you to Part 3 of my course on the history of oil, “The Triumph and Tragedy of the Oil Industry,” available here. (The story begins around the 14 minute mark and ends just after the 29 minute mark.)

Image: Wikimedia Commons

Anytime you see an electric car you are likely to see a “zero emissions” sticker on it, implying that the driver of the car is driving without emitting CO2. Electric car companies are using this idea to market their cars, and to imply that those of us who drive gasoline-powered cars should feel guilty. For example, Coda Automotive, an electric car company, brags that its not-yet-existent sedan, once it exists, will be “An all-electric car to let you drive your way out from under the thumb of big oil. To help steer us away from climate change, polluted skies…”

It is true that electric motors do not emit CO2, and electric cars don’t have tailpipes that emit CO2 or anything else. But ask yourself (or Coda): Where does the electricity that charges the “zero emissions” car come from? Answer: It almost certainly comes from burning coal or natural gas, by far the leading sources of electricity production in America, because they produce the cheapest, most abundant power. Another question: What happens when you burn coal or natural gas to produce electricity? CO2 is emitted.

To call a car “zero emissions” because it generates CO2 at the power plant instead of the engine is intellectually indefensible–and dishonest. And it is a particularly dangerous form of dishonesty, because it promotes the idea that oil and other fossil fuels are dispensable to our standard of living. They are not.

Image: Wikimedia Commons

Every day, Americans use about 3 gallons of oil a day. That’s almost one billion gallons total.

It’s hard to find anyone who thinks this is a good thing. Indeed, the overwhelming view heard in our culture is that our use of oil is an “addiction”. This term was popularized by former President–and oilman–George W. Bush in his 2006 speech.

Barack Obama is even more opposed to oil: “the age of oil must end in our time,” he has declared unequivocally. And: “the country that faced down the tyranny of fascism and communism is now called to challenge the tyranny of oil.” (Note: our President is comparing our use of oil to movements that killed a combined 100 million people.)

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I have found learning the history of oil to be invaluable when looking at today’s controversies. For example, when watching Congress haul oil executives to Washington over gasoline prices that are “too high,” and calling for “investigations”—it is instructive to know that this practice has been going on since the 1920s. Or, when reading references to the oil embargo of the 1970s, along with the idea that it proves the necessity of “energy independence,” it is crucial to know what really happened and what America’s real mistake was.

As long as any of us have been alive, oil issues have dominated both domestic policy and foreign policy. Yet Americans have surprisingly little background knowledge about this coveted commodity. In an effort to educate people more about the oil industry and oil policy, ARC has just released my 3-lecture course, “The Triumph and Tragedy of the Oil Industry,” available online for free in MP3 format. The purpose of the course is to explain how today’s state of affairs in oil came to be—both the benefits and the problems associated with oil.

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As I blogged recently, August 27 was the 150th anniversary of the oil industry.

Given that oil lit up the world in the 19th century and mobilized it in the 20th, and given that to this day oil generates 40% of energy worldwide, August 27, 2009 should have been a day of celebration. Above all, it should have been a day of celebration by the intellectuals who analyze the culture and by the oil industry itself. Instead, it was a day of silence.

Where were the tributes—or even critical retrospectives—in the leading newspaper op-ed pages last week? There were none in the Wall Street Journal, none in the New York Times, none in the Washington Post, none in the Los Angeles Times. I am grateful to Investor’s Business Daily for being the most prominent exception to this trend, and for choosing an op-ed I wrote to commemorate the occasion. The Wall Street Journal finally got around to publishing an oil piece on the following week (though hardly a celebratory one) by historian Daniel Yergin, but the lateness is almost more insulting to the anniversary of oil than not publishing anything.

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