Get heads out of the (oil) sands

Jan. 1, 2020
Some really nasty regimes are holding us hostage. Shouldn't we at least be talking about how to escape?

New York Times columnist Thomas Friedman wants to make our reliance on oil obsolete. That seems to be a tad extreme, or is it?

Friedman’s logic is that we are held hostage by some of the worst regimes in the world –– Iran, Sudan, Saudi Arabia and Venezuela, to name the obvious ones. They don’t have to play by anyone’s rules other than their own and, if we want their oil, we are reduced to begging, cajoling and coddling them.

If that’s not bad enough, we are now in competition for oil with China and India, whose middle classes are rising as quickly as ours is falling. Clearly, we could wind up in a situation where oil will go to the highest bidder. Since we are deep in debt to China, we may come up on the short end of the stick. And let’s face it, our political standing in the world at this time wouldn’t win us any favors in an “us or them” showdown.

Friedman’s answer to escaping this addictive behavior to oil is sure to be distasteful to most Americans –– from business people to the poor. From an aftermarket point of view, Friedman’s answer could actually be crippling if not downright devastating, because it would lead to a severe drop in miles driven.

His answer? The “Bush Energy Freedom Act,” which calls for the government to buy back gas guzzlers. Well, that doesn’t sound like a bad idea, especially if you’re stuck with one of those suckers. It’s the other part that will cause most business people to write Friedman off as some left-leaning whacko. Anyway, he is proposing a $2 a gallon gasoline tax to finance the buy-back program. The elimination of gas guzzlers, Friedman believes, would naturally lead to two things: less gasoline consumption and the outcry from consumers to demand more fuel-efficient cars and trucks.

Although motivating an oblivious (at best) or apathetic (unforgivable) populace to think in such terms is a stretch, it’s a more likely scenario than relying on the government to take action. But no matter the benefits of a long-term plan, the talk of a gas tax is certain to make consumers nervous in a society where we rely on our vehicles for transportation.

Strangely, our government may be relying on Canada to bail us out because it is the richest oil nation in the world. Canada? Yes, Canada. Although you didn’t really hear about it in the last election, both President Bush and Senator John Kerry were carrying this little tidbit in their back pocket, ready to pull it out in case someone would try to grill them about our energy policy. That turned out to be something they really didn’t need to do since the campaign revolved around abortion, gay marriage and Vietnam war records.

But back to the point. Canada –– specifically Alberta, which is just 600 miles north of Wyoming –– has 1.6 trillion barrels of oil in their forests as compared to Saudi Arabia’s 262 billion barrels. But the Saudi barrels are much easier and far less costly to extract than the Canadian crude because it is extracted by the conventional method of digging a hole and hoping for a spout. In Alberta, trees have to be cut before the dirt can be excavated. That’s the easy part. The hard part is working with the dirt that has a sandlike consistency because it is saturated with oil (known as “oil sands”). Needless to say, the process to separate the two is time consuming and energy inefficient. 

Right now the United States buys half of Canada’s oil sands crude, which amounts to about 500,000 barrels a day or about 19.5 billion barrels short of what we need. This is going to increase over the next 10 years but not to the extent that we need. Even if it did, we would still be reliant on foreign oil. No matter how well we get along with Canada right now, who can say their position of power won’t change our relationship?

Shortly after Friedman recommended his Bush Energy Freedom Act, Vice President and former Halliburton CEO Dick Cheney was asked if such a plan is feasible. His answer was not surprising considering Mr. Cheney’s ongoing relationship with his former employer, the world’s largest oilfield services and products company. Basically, he says that although the Bush administration supports research to develop new methods of generating energy, it’s not up to government to impose a mandate. Just let the free market work.

Friedman doesn’t buy it. He says the global oil market is hardly free. “It’s controlled by the world’s largest cartel –– OPEC –– which sets output, and thereby prices, according to the needs of some of the worst regimes in the world. By doing nothing, we let their needs determine the price, and their treasuries reap the profits.”

Furthermore, Friedman says that “Cheney has no problem influencing the market by lowering taxes to get consumers to spend, but rejects raising gas taxes to get consumers to save energy –– a basic national interest.”

Perhaps it will take something as radical as a substantial tax to get us to start thinking about a real solution for energy, rather than seeking the next pie in the sky, or oil sands in the forest. Clearly, what is needed is for our legislators to throw away their political agendas and engage in a vigorous and open debate.

Meanwhile, other nations dictate our transportation future and toy with us over our reliance on oil. Maybe we can get to this after we’re done debating Cheney’s hunting accident.