The Shell Game

John Hofmeister, president of Shell Oil Co., the U.S. division of Royal Dutch Shell, appeared in an interview this morning on CNN’s ‘American Morning’. As one would expect, Mr. Hofmeister pressed the industry line:

I say we need more gas to be produced in this country. I’ve been saying that for three years, ever since I took this position [as president of Shell]. If the U.S. set a goal to produce 2 to 3 million barrels more a day in this country, we would send a shock around the world that would immediately say to the speculators, hey, U.S. is serious. President [Bush] said something yesterday about this.

He went on to praise President Bush’s repeated appeals to Congress to open the Alaskan National Wildlife Refuge (ANWR) for speculation and drilling. Republican efforts to open up ANWR for oil production are certainly not new. In 1995, President Bill Clinton vetoed a Congressionally-approved budget which included a provision to allow drilling in the refuge. His continued intransigence forced Congress to ultimately ditch the effort and draft a proposal without the addition. In 2002 (and later in 2005), Conservative (and Big Oil) plans for exploratory drilling were defeated, first by the Senate, and later by Democratic filibuster.

The actions of the Democratic politicians who have staunchly blocked Oil’s attempt at despoiling another natural habitat are noble. Environmental groups agree that the exploration and production of oil in ANWR would directly threaten a variety of unique species.

Even more disconcerting is really how little oil is available in ANWR according to estimates. The U.S. Department of the Interior claims that there are approximately 10.4-billion barrels that are economically recoverable. We’ll use this number even though it’s probably a high estimate (considering that the Department of the Interior is under the thumb of a pro-oil administration). Since domestic consumption is about 20.7 million barrels per day, if the U.S. were to rely only on ANWR oil reserves, they would last about a year and a half.

But wait, we currently import oil from all over the world to meet our demand, so is not it ludicrous to think that we would rely on a single source? This is certainly true; we do rely heavily on foreign oil. So, let us say that oil from ANWR was used to replace imports from Chavez’ Venezuela, which account for 10% of our imports. Providing 2 million barrels per day would cause the ANWR field to dry up in about fourteen or fifteen years. Furthermore, the United States would continue to depend on countries with questionable human rights records, like Saudi Arabia and Nigeria. Drilling in ANWR would decrease our dependence on foreign oil only fractionally.

Furthermore, arctic drilling would do nothing to reduce our general dependence on oil, a dirty, non-renewable energy source. The Bush administration, however, seems rather uncommitted to this goal. Only recently, with rising concerns over gasoline prices, have the Bushies acted to show Americans their concern with tougher stances on fuel efficiency and support for alternative (but wasteful) biofuels like ethanol.

So who would really benefit from drinking Alaska’s proverbial milkshake (as Daniel Plainview might say)? Oil companies, certainly, particularly those who are part of the Alyeska consortium that own and operate the Alaskan pipeline (BP, ConocoPhillips) and other major players (Shell and Mr. Hofmeister) who already have the resources and rights necessary to extract, process and sell what limited supplies are available on a raging market. Republican politicians would probably benefit as well (i.e. receive major campaign contributions from these corporations). The influence of big Oil is certainly strong in the Republican party as evinced by criminal accusations of bribery against former oil-company VECO, Alaskan Representative Don Young and Alaskan Senator Ted Stevens.

So it goes in Congress: you scratch my back, I’ll scratch yours, oil will flow, money will be made and damn the caribou! They don’t vote (or contribute) anyway.