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Building Energy, Economy and Environmental Bridges
Throughout the 21st century, the world will most likely transition from world serve to reinforce in my mind the very strong link between energy
vehicles that run on liquid fuels to vehicles that run on something else – and the economy and the need for good information. Modern economies
perhaps electricity or hydrogen – and electricity will represent an ever- are powered by reliable, affordable energy; energy is required for
increasing percentage of end-use energy consumption. Options for base- economic growth and health.
load electricity generation fuels today include coal, natural gas, nuclear
and, to some degree, hydro, which combined represent over 95% of The link between energy and the environment is more difficult to
present-day electricity. Emerging options for electricity generation include construct intellectually. I consider myself an environmentalist. To me that
wind, solar, biofuels, tides and hydrothermal. A big challenge in electricity means I am awed by the beauty of nature – from the tenacity of the desert
is efficient storage and transmission. Governments would be wise to focus to the majesty of the mountains to the magnitude of the sea. I spend time
research investment on these areas and let markets work in terms of out of doors, tread as lightly as I can and try to leave places better than I
‘clean’ generation options. Global interdependence – of commodities, find them. I contribute financially to certain environmental activities and
economies, financial markets, food, human resources and energy – is attempt to minimise my environmental footprint, given the available
becoming the norm. This is not a bad thing because education, trade and technological options and to the extent I can afford. But what does that
sharing of ideas and knowledge have historically served to enlighten and mean? The energy–environment bridge is built on an economic
improve humankind. foundation. Energy is required for a healthy economy, and a healthy
economy is requisite to a clean environment. Put differently, in a global or
“Why is the price of gasoline so high?” I was asked this question recently national recession not much is invested in the environment; we have other
while presenting before several US Senators in an ‘energy independence’ issues and concerns to deal with that are more pressing. This
forum. My response, “I don’t think gasoline costs too much, nor can the economy–environment link may not be widely understood.
US be energy-independent in the next quarter-century,” was not
particularly well received. In terms of gasoline price, I explained what is Today’s energy debate is often framed as a choice between fossil fuels
required to explore for and produce oil and to refine, transport and and non-fossil fuels, or between fossil fuels and the environment. Fossil
deliver it as gasoline for our cars. I compared it with bottled water being fuels, alternative energy, the economy and the environment are not
sold at US$1 or more per pint and Starbucks coffee at US$4 a cup, and mutually exclusive choices. They are inextricably linked. However, is it
emphasised that gasoline was a pretty good deal. In terms of not the case that fossil fuels are bad and wreck the environment? There
independence, the US consumes 25% of the world’s energy and imports was a time when production of fossil fuels had a major impact on the
30% of that energy in the form of oil (~65% imported) and natural gas surface of the Earth. However, understanding has advanced and
(~20% imported), with no scalable alternatives in the foreseeable future. technology has evolved and improved dramatically. Complex horizontal-
Striving for near-term US energy ‘independence’ by policy fiat may be a well configurations allow thousands of subsurface acres to be accessed
misguided aspiration. Instead, a strong bridge to the energy future from a 10-acre onshore pad or offshore platform. Pipelines and gas-
should, and will, be built by fossil fuels. Again, this was not satisfactory gathering systems are automated and efficient so that liquid and
to those before whom I was testifying. atmospheric releases are more readily detected. Marine production
and transportation systems of liquid and natural gas fuels are designed to
We did not have time in the short Senate session to explore the underlying react to natural disasters such as hurricanes and even earthquakes.
drivers of oil price, but I did so two weeks later in longer briefings to the Reclamation of coal-mining operations results in land that resembles
US House. We discussed factors that affect oil price, such as: demand in native conditions much more closely than did the pre-mining landscape.
Asia squeezing already tight global oil supplies; lack of access to critical Katrina and Rita were devastating natural disasters. However, the greatest
resources off US coasts and the message that those moratoria send to environmental story of the decade in terms of oil and gas was the one that
world markets; the impact of speculation and hedging on oil as a function followed Katrina and Rita: no major spills or leaks from offshore
of the weak US dollar; the impact of the struggling US economy; the operations – the environmental disaster that was not. Too bad major
lack of scalable liquid fuel alternatives; and weather, global warming and media outlets did not see fit to run that story.
the huge potential cost of reducing CO
2
output to the atmosphere. In
addition, I presented the positively correlated relationships between In the US today, oil and natural gas resources are found off every US
energy consumption and per capita GDP in global economies and coast – Arctic, Atlantic, Pacific Gulf – under drilling moratoria on the false
between the sharp increases in oil price and US recessions, which have pretence propagated by a media myth that drilling hurts the environment.
occurred at least three times in the past four decades. During these Yes, there are accidents – they happen whenever humans and large-scale
exchanges, it became apparent that US and global energy policies, or the technology come together. These accidents hurt the environment and are
lack thereof, had, just possibly, led us to this energy juncture. I also made not good, but they are relatively rare. Just as they have with oil and natural
it clear that America’s favourite whipping boy, so-called ‘big oil’ gas, they will happen with wind and solar systems when these are
companies, who combined control less than 10% of global oil reserves developed and deployed at the massive production scales needed to make
(sounds sort of ‘small’, does it not?) do not control the price of oil or an impact. The greater disaster, and one that is no accident, is policies that
gasoline. In fact, this is one of the 10 ‘energy myths’ that I discuss in impose drilling moratoria that do not allow development of fossil energy
various venues. resources – resources that would allow us to build a stable economic
bridge to an alternative energy future. The unintended consequence of
I may not be invited back to the hallowed halls of Congress. Kidding aside, this misplaced policy is harming our economy and, consequently, is
many did say that they appreciated a fact-based approach and my reducing the level of investment in our environment. A stable and
willingness to speak candidly, even if what I had to say was unpopular. continuous supply of fossil fuels is needed while we develop and expand
Visits to Washington and the speaking I undertake around the US and the alternative fuels – for our economy and for the environment. ■
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EXPLORATION & PRODUCTION – OIL & GAS REVIEW 2008 – VOLUME 6 ISSUE II
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