Might As Well
I don’t burn with outrage at the very thought of drilling for oil in the Alaska National Wildlife Refuge anyway, but it seems to me that if you think there’s anything to “peak oil” theory, then drilling in ANWR becomes a downright good idea. If you don’t believe in peak oil you can probably afford the luxury of keeping the “pristine wilderness” of ANWR super-duper pristine. But if you do, the marginal impact on the ecosystem there seems to lose cleanly to the benefit of cushioning the shock of world demand outstripping world supply. The extra time for the globe’s economies to find substitute in other resources and processes for petroleum can spare a lot of genuine hardship.
Comment by Bill —
December 22, 2005 @ 12:23 am
ANWR oil isn’t going to make much of a difference in the big scheme of things. Maximum production is estimated to be 850 000 BOD vs world production of 75 million BOD. If Iraq ever gets up to speed it could produce a lot more than ANWR.
I don’t know why people get so excited about ”Peak Oil” , I remember hearing about it in school 30 years ago. All it means is that oil is going to get progressively more expensive until people start using other sources. It doesn’t mean we are going to wake up next week and there will be no gasoline for sale, which is the impression you get from reading some blogs.
ANWR could be exploited with a minimum of disturbance, but this isn’t a scientific or an economic question as much as a religious one.
Many environmentalists see the petroleum industry as the devil incarnate rather than just another commodity business.
I think someday ANWR will be drilled, it will just get more tempting as oil gets scarcer.
Comment by Bones —
December 22, 2005 @ 3:00 am
Or maybe we should be saving it for the day when oil is too expensive to burn but still needed to make plastics, etc.
Comment by Frank —
December 22, 2005 @ 3:01 am
Jim- I also don’t get mad at the idea of drilling at ANWR. The question is about timing. I think there is a case to be made that we should wait until we can no longer import much oil. Think of it as a part of our strategic oil reserve. I think we should at least wait until oil hits $100 a barrel.
Comment by Stephen —
December 22, 2005 @ 4:23 am
A breathtaking post. Is my sense of humour failing? Are you on cold meds?
As I understand it, ANWR would provide you with an extra year’s oil, and that several years down the line. What exactly is likely to be done by your politicians, in a year, to ”cushion” the shock? That couldn’t be painlessly achieved by gentle encouragement not to drive so many damned trucks? You know, don’t you, that you’re going to have to join the rest of the planet above 20mpg one day?
And what is a libertarian doing, deploying government to fiddle at the margins of supply and demand?
And lastly, you seem oddly confident that this government will endeavour to make only ”a marginal impact on the ecosystem”. Really? If there was a lobbyist’s dollar at stake?
Comment by Stephen —
December 22, 2005 @ 4:50 am
One more thing (sorry but this post really wound me up): as Yglesias is fond of pointing out, oil is a global commodity sold in global markets. It doesn’t matter where it comes from. The ANWR oil is ”yours” in the sense that your oil companies will profit because your government will control the contracts, and some of the hardy individualists up in Alaska may deign to get off the government tit and work. But any ”cushioning” of price movements can only occur in the global market, in which ANWR’s contribution would be utterly trivial and, more to the point, just as beneficial to France and China as to US Republicans.
Comment by kief —
December 22, 2005 @ 8:02 am
The extra time for the globe’s economies to find substitute in other resources and processes for petroleum can spare a lot of genuine hardship.
Do you really believe the globe’s economies would actually use any extra time they bought to find substitutes, rather than just saying ”whee, crisis averted, business as usual!” until the extra time was gone?
I don’t.
Comment by matthew hogan —
December 22, 2005 @ 8:04 am
Privatize and drill away, it’s tundra, folks with a few holes in it. It’s not even a close debate or ought not be. Oil, humans need and use for basic activities. It is Oil drilling at the most remote and harmless place we could ever hope for for such activity, short of the moon.
Drill it and shut up.
Comment by Nell —
December 22, 2005 @ 8:41 am
Whatever your views on drilling in ANWR, there’s no excuse in the world for the way Stevens & Co. are trying to ram this through. The abuse of process in the House and Senate under these thugs is appalling.
I’ll listen to an argument in favor of ANWR drilling after we’ve tried a whole long list of other ways to cut down on oil use — all the things Reagan tossed aside in favor of making cozy with the house of Saud.
Comment by wade —
December 22, 2005 @ 9:22 am
and after we’ve pumped the arctic dry, we can start on antarctica – theres shit loads of valuable coal, oil and gas down there…
or alternatively, we could stop someway short of despoiling every last corner of the earth we happen across and sucking up every last drop of oil, and save some for later… (that’s not in your lifetimes, rugged individualists..)
Comment by Rich Puchalsky —
December 22, 2005 @ 9:41 am
Eh, Jim just thinks he’s getting too close to the liberals, so he decided to write something to reinforce his seperation. Like the guy who’s never acknowledged to himself that he’s gay renting a hetero porn video and ostentatiously joking about it with his friends even though he somehow never gets around to watching it.
Comment by Jim Henley —
December 22, 2005 @ 9:49 am
I dunno, Rich. It’s a nice theory, but then when I read wade’s comment shouldn’t I . . . feel something? Some shuddering horror at the idea of extracting resources from Antarctica or throbbing shame at the idea of ”despoiling every last corner of the earth”? I don’t even feel stung. Instead I just thought, and almost commented, ”There’s the religion stuff that Matthew was talking about.”
Comment by Rich Puchalsky —
December 22, 2005 @ 10:06 am
Well, maybe; the analogy is not exact. But if the imagined gay guy did sit down and watch the video, it’s not that he would really feel much about it. Similarly, I doubt that you’re going to go out and start lobbying your representatives about ANWR in the same way that you might about the issues that are important to you, like torture and domestic spying. It becomes a convenient public marker; libertarians reading your blog can be reassured that you’re still one of them.
Comment by Jim Henley —
December 22, 2005 @ 10:16 am
I’ve got an Elliott Spitzer outrage to blog tonight that’ll do that as well. FWIW the story really pisses me off. Were it not for the complicating factor that I like Seth Farber and his wife personally, and they both work for Spitzer, the item might reach Colin Maye levels of outrage.
Comment by Leonard —
December 22, 2005 @ 11:17 am
Rich, although I guess this post does reassure me that Jim isn’t sliding off the rez, I really wasn’t worried about that anyway. And certainly not in the context of an ”issue” of such little meaning either way (to a libertarian) as whether or not the state should exploit resources on its land. I think it should, given it has them, but I don’t think it should have them. I also think if ANWR were privately owned by a conservation-minding non-profit, they wouldn’t drill it. So, what?
Think of this as educational for liberals.
As for ANWR and ”peak oil”… it’s very unclear to me how those might relate. If you assume that oil prices will go up/up/up, then holding off on drilling up there might be a good idea – basically, you should not drill so long as the price of oil is expected to rise faster than the real interest rate. That may mean drilling now, or it may mean waiting almost indefinitely.
You will, however, eventually suck out and use the oil. You’re just waiting for the best price. And it has nothing to do with conservation; it’s just greed.
It is only if you don’t buy into ”peak oil” that drilling in ANWR becomes an obvious move (and then only if you, like most but not all people, are not moved by the concept of pristine wilderness in some place you’ll never see). If oil is like most other commodities, then its long-term price will only decline (given world capitalism); in such a case you might as well pump it out and sell it now, while the price is as high as it will ever be.
Comment by jlw —
December 22, 2005 @ 12:08 pm
Given the fact that the authorization for ANWR dilling needs only pass once–no matter how many times it is turned down beforehand–I think it is a done deal, eventually. Unless it can be put off long enough that oil is no longer prized, which seems unlikely. So it seems to me that the point of putting off ANWR drilling is to make it worth the cost of wrecking the tundra up there. In some alternative universe in which ANWR was first exploited in the Reagan administration and the field’s peak production and decline hit during the Clinton Administration (i.e. $10 a barrel oil) I think it would have been a bad deal all around.
Considering that there is a growing consensus that (due to a number of factors) world oil production may reach a peak within the next ten years, it seems that the ultimate price that ANWR oil fetches will be higher later than sooner in almost any time frame you care to pick. It’s probably gonna do the most good during or after the Obama Adminstration, so we ought to time the beginning of ANWR exploration to coincide with that.
Comment by jlw —
December 22, 2005 @ 12:10 pm
Grrrrrr. Make that ”. . .a growing consensus that (due to a number of factors) world oil production WILL reach a peak . . .”
Comment by realish —
December 22, 2005 @ 1:22 pm
Argh. This ANWR debate maddens me.
First: What Stephen said. Oil is fungible. ANWR oil will not be ”ours.” It will be sold on world markets. It will do nothing for this country, only for Alaskans and oil-service companies.
Second: The amount of oil we could get out of ANWR would do absolutely nothing to cushion an oil shock, if an oil shock there is to be. It’s a tiny drop in a very huge bucket.
Third: Is there something about being a libertarian that’s supposed to make it uncool to think that ecosystems might have some value beyond the merely instrumental? That too ”fuzzy” for you hard-headed manly types? How is it any more ”religious” than valuing your fellow human beings?
Fourth: The people, through their elected representatives, have *repeatedly* expressed their preference that ANWR be preserved. This venal piece of shit move by Stevens was just the latest in a long string of attempts to circumvent the will of the majority. Those who say drilling is ”inevitable” are just saying that the greed of Alaska politicians and oil-service companies (oil companies themselves have little interest) — combined with the ideological zeal of the far right, combined with corrupt twisting of the legislative process — make a travesty of the democratic process inevitable. That doesn’t piss anyone off?
Fifth, and most importantly: The amount of oil we could get out of ANWR could EASILY EASILY EASILY EASILY (pant, pant) be saved through efficiency and conservation. Ten times over. Twenty times over. EASILY. With no economic hurt — in fact, it would be an economic boon. Just keeping the tires on Americans’ cars properly inflated alone would save that much oil.
There are 100 ANWRs worth of oil laying all around us in easy efficiency measures. There’s an enormous amount of literature on this, despite how little press it gets.
This is what I don’t get about the current energy debate. Everybody is focused monomaniacally on supply, but demand is much, much more flexible. There are low-hanging fruit all over the place. Read some Amory Lovins. Efficiency is the largest and most profitable source of energy in this country. He says — and believe me, he’s done the math — that we could eliminate oil use in the country for less money than it costs us to buy the oil. And long-term, oil prices are only going to rise.
I mean, even if you only value untouched nature a tiny bit, shouldn’t it sway you that there are much easier ways to get the oil?
Take-home message here: Don’t be fooled by Republican (and, okay, most Democrats) obsession with supply. It’s a function of their ownership by corporate interests. Demand is where the flexibility is. Demand is what will cushion us from oil shocks.
Comment by realish —
December 22, 2005 @ 1:26 pm
Instead of reading all that crap I just wrote, read Winning the Oil Endgame by Amory Lovins. You can download it for free.
Comment by Gene Callahan —
December 22, 2005 @ 3:24 pm
Jim, world demand cannnot outstrip world supply — at the equilibrium price, the demand and supply curves always intersect. We’ll just pay more for oil than we are used to.
Comment by Jim Henley —
December 22, 2005 @ 3:31 pm
Gene, that’s true. I’m talking about the suddenness of the adjustment, which is what I take to be the concern of the Peak Oilers. (I’m agnostic-to-skeptical on Peak Oil.) If the demand and supply curves go upside down quickly enough, your equilibrium price can change very rapidly. That’s a shock, for all that the price function restores the balance over time.
Also, a world of Elliott Spitzers provides no guarantee that price is what gets to realign the curves – war and rationing are possibilities too.
Comment by Leonard —
December 22, 2005 @ 4:05 pm
realish – getting oil out of the ground is a very different thing to a libertarian than saving oil via state-enforced conservation.
Quoting the report you linked, in its summary list of recommendations: Most importantly, revenue- and size-neutral `feebates’ can shift customer choice by combining fees on inefficient vehicles with rebates to efficient vehicles.
Got that? More taxes to pay for state management of customer choice. That may be many things, and it may well work, but it is emphatically not libertarian and can never be. Whereas, drilling for oil is OK by us. State-mandated conservation may be EASY EASY EASY, but creating it via aggression is WRONG WRONG WRONG (pant). (Also I somehow doubt it is quite as easy as Loving thinks.)
I dream of living in a moral society: a society that aggresses against no one. Now, I happen to believe that a free market will make us rich; and thus, the moral imperative to treat others as I would be treated does not conflict with the desire for a high quality of life. But I’d rather live in a poor but moral society than a rich immoral one; if the choice is to impoverish ourselves via a free market in oil and automobiles, or to stay rich via extensive state regulation of the economy, I’ll take the former.
Comment by Rich Puchalsky —
December 22, 2005 @ 4:16 pm
Leonard, really. You’re aggressing against people every time you drive your car. People in the Maldives, Bangladesh, etc. are going to drown because you gas up. Libertarians have no answer to this besides crackpot denialist pseudoscience. That’s a fundamental flaw with the philosophy; it just doesn’t work to say that you care about aggressing against others and then go ahead and do it through negative externalities.
Comment by Leonard —
December 22, 2005 @ 4:48 pm
Rich, really. You think my 100 pounds of CO2 will drown someone? Presumably by incrementally raising the temperature of the earth over the next 200 years by 0.000000001 degree, leading to an additional ton of ice melting in the pole, and that water displaced onto the impoverished, raising the sea level by 12 nanometers and drowning an incremental Bangladeshi? Whose ancestors had no means to avoid it in that 200 years?
Well, perhaps. Whereas, there is a dead certainty that if you tax me to force me to use carbon in a way you’d prefer, you’ve aggressed against me.
Now, which is preferable? The future possibility of a wrong, or the present certainty of it?
The fact is you don’t have to go to cars to get CO2 output – we all breathe. So, is it ”aggression”? Your call. Is it ”aggression” to release a single molecule of C02 against the will of anyone, anywhere?
Me, I am an anarchist, not a rights-theory libertarian, in part because of questions like this. Rights-theory is a very powerful and useful thing, so long as you stick to most real-world questions (is taxation morally acceptable?). But rights-theory breaks when pushed into the extremes. Anarchism can accept imperfection because it is not an attempt at reifying a moral theory. Which is not to say morality is unimportant, just that ultimately philosophy must accord with the world-that-is.
Comment by Rich Puchalsky —
December 22, 2005 @ 6:00 pm
Leonard, your first paragraph has a lot of suspect science in it, but I won’t bother with that. Suffice it to say that you’ve already caused harm. For instance, global climate change raises surface water temperatures, which has already contributed to more severe hurricanes. The only real uncertaincy about the harm you’re causing is created by denialist press releases.
The ”single molecule of CO2” thing doesn’t work either. Ecosystems are capable of handling the CO2 that people breathe perfectly well.
And lastly, if your philosophy is going to accord with the world-that-is, you have to realize that you don’t live in an anarchy, you live in a state whose industrial policy permits you to drive in the way that you do, sheltered from the market forces that might induce you to conserve. Pretending that you’re in an anarchy is all very well, but if you’re going to pretend that there’s no state then you should decline to have even the minimal opinion about ANWR that you do.
Comment by Realish —
December 22, 2005 @ 6:11 pm
Leonard, really. Your personal vehicle will only do a little bit of harm, which is why Lovins’ proposal would just add a little bit onto the purchase price, while trimming a little bit off the purchase price of a car which does a little bit less harm. It’s a public-policy decision to make the cost of the car better reflect the relative harm it causes. If you consider that being aggressed upon, I would suggest that you haven’t fully thought through your buzzwords.
Comment by Jim —
December 22, 2005 @ 9:23 pm
ANWAR would only make a difference if they used the small edge it would give as a transition to less consumption & different resources. Instead, it would be used to make someone very rich & would be pissed away by all the idiots driving around in SUVs.
We will not make a graceful transition beyond Peak. It will be a crash & burn, with the oil companies taking their marbles elsewhere & the rest of us wondering just what happened to us.
Comment by jimo —
December 22, 2005 @ 10:54 pm
Our car companies have answered the supply/demand equation by building more gas-hog vehicles that raise the price of gas for everyone, and pour money in the coffers of those who don’t hold us in high regard. Meanwhile Toyota and others can’t build enough more gas efficient vehicles, GM and Ford are in dire straits financially, and Toyota is about to be the world’s leading car company. I think somebody needs to pull their heads out.
Comment by The Editors —
December 23, 2005 @ 12:59 am
AMWR, SHWAMWR. When will we finally start exploiting the untapped oil reserves in Pat Riley’s hairdo?
Comment by sixteenwords —
December 23, 2005 @ 8:39 am
Toyota isn’t about to become the largest auto maker on the back of the Prius and Ford isn’t in trouble because of the Escape Hybrid.
But, pumping ANWR? You’d think you’d let that sit until it’s about the last of the supply, why use what we have when others are going to sell us what they have?
It’s not like if we start tapping ANWR while prices are relatively low it’s going to SHOCK anyone into conserving, nope, we’ll just drink up the ”reserve” as fast as we can.
Comment by James Aach —
December 23, 2005 @ 1:52 pm
I don’t find drilling in ANWR to be more than a minor, temporary diversion from solving our energy problems, and as I was also raised by caribou, I’m rather partial to leaving the place alonge.
I’ll risk annoying readers by going a little off subject. All the global warming and future energy talk has raised the profile of nuclear power again. I’m not sure if that’s a good idea or not- – and I’ve worked in a nuke plant for years – -but I am confident we’ll make better decisions if we understand our current energy sources.
So . . . I wrote a techno-thriller novel about the American nuclear power industry that’s available at no cost online at RadDecision.blogspot.com. Take a look at ”Rad Decision”, you might enjoy it. (The comments I’m getting from readers seem to be quite positive.)
”I’d like to see Rad Decision widely read.” – Stewart Brand, futurist, tech icon and founder of The Whole Earth Catalog.
http://RadDecision.blogspot.com
Comment by Jon H —
December 24, 2005 @ 1:24 am
”but it seems to me that if you think there’s anything to “peak oil†theory, then drilling in ANWR becomes a downright good idea.”
Not while Hummers are still selling.
It would be far better to hold onto it until oil really *is* scarce. It’s our *real* strategic petroleum reserve.
Comment by Jon H —
December 24, 2005 @ 1:32 am
” I’m talking about the suddenness of the adjustment, which is what I take to be the concern of the Peak Oilers. ”
But Jim, you must realize that any oil supplied by ANWR would be treated about as wisely as Bush handled the budget surplus Clinton left.
Comment by chuck —
December 24, 2005 @ 11:49 pm
Original post’s logic seems to be: ”If you think we are going to have a supply crisis you should support draining and consuming ANWR now.”
I just don’t get that logic. The oil is a treasure. Save it till we really need it, and then do it carefully under a Democratic administration with some regulations and oversight.
Comment by Gary Farber —
December 26, 2005 @ 2:39 pm
”I don’t burn with outrage at the very thought of drilling for oil in the Alaska National Wildlife Refuge anyway, but it seems to me that if you think there’s anything to “peak oil†theory, then drilling in ANWR becomes a downright good idea”
Well, mostly if I don’t know much about a topic, I try to shut up about it.
Particularly if I only know half-assed theory.
Not that it would be much wiser of me to say anything about anyone else pulling what they have from their rear end. I’m relatively easy about getting that. (If this offends, I apologize, useless as that ever is; why I’m commenting, I know not; waving, I guess; happy Florida.)