Bush Digs Dry Well in Alaska
WASHINGTON, D.C.Docile as always, members of the Senate yesterday narrowly voted to support President's Bush quack solution to the energy crisis, i.e. opening up the Arctic National Wildlife Refuge to oil drilling. In addition to wrecking the ecology, oil drilling in Alaska won't produce more than a puddle of crude toward reducing energy imports in the Lower 48.
The vote was close and represents but the first volley in the continuing struggle to stave off exploitation of the Arctic refuge. Still, it already has been taken as a symbol of Bush's strength on domestic issues. In this case, opponents of drilling are to be found among environmentally minded members on both sides of the aisle. Nonetheless, the right back benches, which drive the Congress, held firm and squashed the middle. This vote can only embolden the right to upnot lowerthe ante on any number of issues, from Social Security to energy to Medicare.
Oil drilling in Alaska isn't going to solve any problems, and may make them a good deal worse, by providing the yuppie SUV owners reason to think they can keep on guzzling gas. Yesterday's misreported OPEC production increase isn't really an increase at all, but an acknowledgement that the cartel already is producing all it can, and the already high prices are likely to increase, not decrease.
All sorts of oil people these days are predicting the energy industry is exhausting existing reserves. There are no new big finds. Many analysts believe the much ballyhooed discoveries in the Caspian basin have been hyped way beyond their actual size. Not to mention the extraordinary costs of building pipelines over thousands of miles to haul oil and gas to Europe in the West, and industrial China in the East.
To be sure, the frozen north holds untapped reserves, but the Arctic play to date has largely centered on Canada, and sucking up and piping its oil reserves down to California and the mid-continent.
Analysts at John S. Herold, Inc., the energy research outfit that first spotted the flimflam at Enron, have joined the crowd in predicting oil production is topping off. Robert Bryce, in Salon, wrote on Tuesday, "Since last fall, Herold has done peak estimates on about two dozen oil companies. Herold believes that the French oil company, Total S.A., will reach its peak production in 2007. Herold expects 2008 to be critical, with Exxon Mobil Corp., ConocoPhillips Co., BP, Royal Dutch/Shell Group, and the Italian producer, Eni S.p.A., all hitting their peaks. In 2009, Herold expects ChevronTexaco Corp. to peak. In Herold's view, each of the world's seven largest publicly traded oil companies will begin seeing production declines within the next 48 months or so." Says Herold Executive Vice President Richard Gordon: "If the dinosaurs are going extinct, we are trying to figure out which ones are going to go extinct the soonest."
As oil prices continue to climb, the oil producers hopefully will continue to pump their proceeds into American dollars. But there is a widening acknowledgement that the American economy is a touch-and-go affair, not about to crash, but not about to boom, a wobbly situation. What happens if central bankers in Asia and elsewhere begin to shift their dollar holdings? "What foreign central bankers have it in their power to do," notes the Economist, "is to reveal before all the world that the mighty American economic empire has no clothes." A good part of the reason would be the government's inability to come to grips with the energy crisis that has been in our face since the early 1970s. There is no alternative but to move away from fossil fuels. But this is anathema to the right wing in Congress.
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