Energy, Access, and Myths That Mask Reality
By Lee C. Gerhard. Ph.D.
EDITOR'S NOTE: This Article appears in the current issue of the Republic Advocate.
Dr. Gerhard is an Honorary Member of the American Association of Petroleum Geologists, past president and Honorary Member of that society's Division of Environmental Geosciences, an Honorary Member of the Association of American State Geologists, and an Honorary Member of the Kansas Geological Society. He was inducted into the Kansas Oil and Gas Hall of Fame.

He has published more than 175 papers and books on geology, petroleum exploration, natural resources, and environmental policy.

America has a problem. Some have already recognized it, others soon will. America is running out of inexpensive energy, and it is its own fault.

America used over 100 quadrillion btu's of energy in 2002, and the amount of energy needed to run the country continues to grow as population grows, despite increased efficiency of our industry.

America's economy is directly tied to the cost of energy, especially oil and natural gas. Every economic downturn since 1973 can be directly tied to an increase in the price of oil. The demise of major airlines is tied to the price of oil. The inability of American manufacturing to prosper is tied to the price of energy. Our national energy policy has always been "cheap energy at any cost!"

So what's the problem? We're not running out of oil are we? That's Myth #1. The world will probably never "run out" of oil if we are willing to pay the cost of finding, producing, and delivering it. But we are close to running out of oil that we can afford to burn without regard to the real cost of burning it. And we are likely to see competition for oil supply from other countries as their economies grow and energy demands increase.

At the same time the cost of exploring for and producing oil spirals to new heights as we seek new oil resources in ever more remote and harsh climates. There are experts who think that the world's annual oil production has already peaked, those who think it will top out in 10 – 20 years, and those who think that it will top out in 30-40 years. But there are no experts who believe that it won't top out within 50 years.

It will take huge amounts of capital to continue to find and produce oil at the same rates we consume it today. Reserves, oil that is known to exist, do not dictate producibility, the ability to produce a given quantity of oil from a well, a field, or a country. We may have large reserves, but producibility is controlled by technical and natural rates of production and transportation, not the amount of oil in the rocks.

Last year, for the first time in twenty years the industry found more than it produced, meaning reserves went up, but deliverability did not go up. Much of the reserve growth is attributed to recalculating reserves based on development drilling, not new exploration success. That remains as less than half of production (about 26 billion barrels consumed, 10 billion discovered).

The other BIG problem? America is going broke by spending more than it makes in foreign trade. We are well down that slippery slope, from a $400 billion net foreign investment surplus in 1980 to more than $1.5 trillion negative today, that is, foreign investors control and take the profits from $1.5 trillion of our economy. We are now seeing the price we have to pay for our trade imbalance: Foreign ownership of our assets and means of production.

The Germans own Chrysler, the British own Amoco and Arco. The pharmaceutical industry is largely foreign owned, as is the concrete industry. Even the high tech consulting services of the former Ernst and Young Consulting Group are now owned by French interests. Farmland, ranchland, factories, and natural resources, and our income-generating industries are being purchased by overseas interests, with our money, most of it money that we have thrown overseas largely because we refuse to access our own energy resources.


America has tremendous energy resources, from oil in the Arctic to coal bed methane in the west, and natural gas off Florida's west coast. Yet we refuse to allow ourselves to explore more than 65% of our public lands on shore, and almost none of our offshore.

Canadians are producing oil and natural gas from offshore Eastern Canada, and planning exploration offshore of British Columbia. The United States declines to permit exploration of our companion areas, plus we refuse to access the riches of much of the Rocky Mountain west, and much of the Arctic coastal plain because environmental preservationists hold sway in Congress. They demand that we stop using energy, flagellate the economy, and drive poor people deeper into poverty. They use the endangered species law and procedural court tactics to prohibit energy development, while your tax dollars pay their lawyers.

They falsely argue that the earth's environment cannot withstand energy production, while they use ever more energy, and pour hundreds of millions of dollars into their coffers. And you stand for this and whimper, but take no action.

Myth #2: Some of these preservationist groups portray the Arctic as scenic mountain vistas with cuddly polar bear cubs nestled in their dens. The truth is that the coastal plain is bleak and forbidding, and bears, caribou, and birds all get along well with well planned, highly regulated, clean and neat energy development. Myth #3: They tell you that the petroleum industry is destructive and that oil spills will harm our wildlife. But what they don't tell you is that of all the oil in the North American coastal waters, 61% is natural seepage, and 35% is spilled by American consumers. Exploration and production is responsible for only about 1% of oil in the coastal environment, and even refining and transportation of oil is only about 3%. American consumers, including those same environmental preservationists, are responsible for nearly all the non-natural oil in the coastal waters of North America. Please stop abusing our hard-won earth resource products!

We almost ran out of natural gas during the winter of 2002-2003. A normal winter. Our natural gas reserves are being drained faster than we are able to find new sources. We know that there is a huge amount to explore for and produce, but we are not permitted to access public lands through much of the west and off the coasts except in the western Gulf of Mexico. 213 trillion cubic feet of gas, potential home heating fuel, is in lands that are off limits, largely without scientific reason. The result is that natural gas prices are much higher today than a year ago, and the prospects for continued high prices are great. You who purchase natural gas are paying the costs of environmental preservation, costs that do not buy any environmental gains, and in fact, force people and industry to use more coal and crude oil, exacerbating the import problem and adding to air pollution. It looks like natural gas costs will be even higher next winter.

There are those who claim that forcing the nation off its public lands for energy development will force the nation to adopt new alternative sources of energy, such as wind, ethanol, biomass, and solar. This would condemn our people to a low energy subsistence, since none of these sources can come close to supplying this nation with its energy. Biomass is the most polluting of all energy sources. Ethanol requires more energy input than its output, and produces pure carbon dioxide. If one is to worry about carbon dioxide additions to the atmosphere, than this is certainly not the fuel of choice. Wind machines cover the landscape and produce undependable and small amounts of electricity, usually far from the need, so that line attenuation reduces even the small amount of electricity they can produce. One example of the potential impact of wind generation is a comparison between the potential of the proposed 2000 acres of ANWR development for oil and the number of wind machines that would have to be constructed to equal the energy of those 2000 acres. If one were to replace the annual output of oil from the Arctic coastal plain ANWR area with wind machines, one would have to cover all of the New England states, and they would have to run at full speed 24 hours a day, 365 days a year. Not much of an environmental trade-off is it? Solar has some possibilities, and is useful today in remote locations and special climates, but new technology advances are needed in both solar generating devices and in better batteries before any widespread replacement of fossil energy can be made with solar. Gas hydrates have held much promise, but they are just natural gas, and if feasible, they could extend the life of our natural gas heritage. A very interesting experiment is now being conducted in the Arctic to test feasibility of sub-tundra hydrates, but even if successful, hydrates will require physical access to public lands. In short, if the nation does not access its oil and gas resource base, it will have to mine more coal and build more nuclear energy plants. That's the only real choice.

Since we have not been able to bring sound science to environmental preservation groups, we must bring sound science to the Congress and pass a comprehensive energy policy that provides for conservation, production, and future technology development. Are our elected representatives up to the task? We'll see\\

This Article is © 2003 but may be reproduced in whole or in part if proper credit given the author, Instiotute, and publication.