The International Energy Agency (IEA) has produced an estimates stating that the social upheaval in Libya has halted between 850,000 and 1.0 million barrels per day of the country’s exporting oil.
In the United States, oil prices has risen to over $106/barrel causing CA to fill up at the price for an astonishing $5/gallon. On the East Coast, prices loomed around a whopping $3.5/gallon.
It has been said that society could survive on gas pumps as high as $4.5/gallon but current recessive times are causing people to doubt that figure and instead are looking for ways to lower our gas costs.
Including myself. In fact, I have outlined options available below in order of feasibility from 1-7, with #5 being used as a LAST resort and the sub options within #6 and #7 sought to be implemented simultaneously while operating within the first 4 options.
Before the outline of options, A BIG thank you goes out from the Heart of America to Saudi Arabia, the IAE & Canada for offering to help us during this tumultuous time. I hope our “leaders” (and I use that term loosely) will come to their senses and take you up on your offer to help bring financial relief via the gas pump to the United States. Thank you, thank you, thank you. It’s comforting to see who our true friends are in a time of crisis.
Option #1- Seek assistance from the IEA
IEA, part of the Organization for Economic Cooperation and Development (OECD), holds emergency stockpiles equi va lent to at least 90 days of net oil imports, counting both government and industry stocks.
IEA executive director Nobuo Tanaka last week sought to calm markets by saying emergency oil stockpiles could be used if needed to counter the disruption from Libya.
“We can release 2.0 million barrels per day for two years. We don’t really have to worry too much about the supply side,” said Tanaka.
Option #2- Take up Saudi Arabia on their effort to help.
Top oil exporter Saudi Arabia has pledged to fill any supply void left by Libya.
Saudi Arabia was currently pumping around 9.0 million barrels daily and has spare capacity of 2.5 million to 5 million barrels per day; although that would cut global spare capacity to pump more oil.
Opponent of this idea are against it because we would be resting our demand in Saudi Arabia’s hands and their regional area is running amok with domestic civil wars and stability in Saudi Arabia is not guaranteed. A concern that is justifiable and definitely noted as Saudi Arabia’s “day of rage” will be initiated tomorrow.
Yet it is important to remember that OPEC [Organization of the Petroleum Exporting Countries] is capable of managing the situation, of exporting 2.5 to 4 million barrels a day are available from Saudi Arabia.
New production can be completed in a few days while price reductions become immediate.
Problem being? Is not so much the quantity but rather the quality that the US is searching for as Libyan oil is “sweeter” which makes it easier to be refined. Unfortunately, not too many countries can “measure up” to Libyan oil but at this point, “can beggars really stand to be choosers?”
Option #3- Seriously consider Canada’s offer to help while ensuring that the water of Ogallala is protected.
Canadian Prime Minister Stephen Harper on Friday urged U.S. officials to approve an oil pipeline from Canada to the U.S. Gulf Coast, calling his country a secure, stable and friendly neighbor that offers “ethical oil” as Canada respects human rights, workers’ rights and environmental responsibility. Not too mention the location convenience of having the oil right next door and on all things considered, “calm” land.
Canada is offering to build a 1,900 mile pipeline that would carry crude oil extracted from tar sands in Alberta, Canada, to refineries in Texas, producing more than 500,000 barrels a day of crude oil derived from formations of sand, clay and water in western Canada.
The $7 billion Keystone XL pipeline could substantially reduce U.S. dependency on oil from the Middle East and Venezuela, according to a report commissioned by the Obama administration.
“Keystone XL will also create 20,000 high-paying jobs for American families and inject $20 billion into the U.S. economy“, states CEO of Calgary-based TransCanada, the project’s developer.
The study suggests that the pipeline, coupled with a reduction in overall U.S. oil demand, “could essentially eliminate Middle East crude imports longer term.”
Yet opponents are responding that the project would bring “dirty oil” from a polluting source into the U.S. Specifically, portions of Colorado, Kansas, Montana, Nebraska, New Mexico, Oklahoma and South Dakota, Wyoming, before coming to it’s finally destination stop in Texas via the Ogallala Aquifer.
The Ogallala Aquifer holds the majority of the water in America’s high planes and uses 90% of the underground water to irrigate crops that provide 1/5 of the total annual U.S. agricultural harvest.
While I understand their concern of their deletable and non-renewable source of water; I have to think that Canada has run across similar concerns as this type of drilling is a relatively new concept.
Perhaps we could meet with them and find a way to allow access to their oil reserve while protecting the American plains irrigation water and make this a win-win for both parties involved.
Where there’s a will, there’s a way.
Option #4 – Opening up drilling in the US areas where already pre approved.
Now newer fields are showing promise, including the Niobrara, which stretches under Wyoming, Colorado, Nebraska and Kansas; the Leonard, in New Mexico and Texas; and the Monterey, in California and North Dakota.
By 2015, oil executives and analysts say, the new fields could yield as much as 2 million barrels of oil a day — more than the entire Gulf of Mexico produces now.
This new drilling is expected to raise U.S. production by at least 20 percent over the next five years. Within 10 years, it could help reduce oil imports by more than half.
** Please note- this is NOT an argument for additional drilling in the Gulf of Mexico after last year’s oil spill.
In fact, I would prefer for the existing drilling to be compliant with an independent drilling regulatory agency (as talked about: https://theheartofamerica.wordpress.com/2011/02/16/cg-adm-thad-allen-and-bureau-of-oem-support-an-indepenent-drilling-regulatory-agency/) before they are allowed to start drilling again.
In addition, I also would like existing Gulf drilling to be in full compliance of the new safety legislation, Implementing the Recommendations of the BP Oil Spill Commission Act (read more: https://theheartofamerica.wordpress.com/2011/01/28/safety-measures-for-oil-may-be-tedious-but-dont-throw-them-to-the-wayside-for-a-quick-dollar/)**
For the record, while I support existing and pre approved new drilling- I do not support any new drilling in the Gulf of Mexico as it provides a potential threat to our Country’s military mission off the West Coast and runs the risk of getting into the Loop Current near South Florida and be carried into the Gulf Stream which runs up the East Coast of Fla and of the United States.
Option #5 – Tapping our strategic oil reserve (THIS SHOULD BE AVOIDED AT ALL COSTS)
Democratic lawmakers are pushing the public into lessening our personal supply of oil for a (possible) relief at the gas pump by tapping into our strategic oil reserve which holds only 727 million barrels of crude.
The U.S. reserve’s stockpile is equal to 485 days of Libyan oil exports and about 60 days of total U.S. oil imports.
However, tapping this reserve has only been done on a few occasions in the past and is frowned upon by many as it reduces our energy self dependence (something that the Democrats, ironically enough, keep talking about).
If the Democratic Party is looking for “all the help we can get”- perhaps they should look to the solutions below instead of depleting one of our only stable sources of security.
Option #6: “All the help we can get” which includes other means of financing
One way that we can work towards investing in our alternative energy sources is by eliminating big oil subsidies and reduce royalties. You can read more about it by visiting: https://theheartofamerica.wordpress.com/2011/02/05/case-in-point-eliminate-big-oils-subsidies-and-royalties-reduction-of-national-debt-encourage-alternative-energy-and-give-back-money-to-the-american-taxpayers/
Another way of tackling the rising gas costs is to copy British finance minister George Osborne line of logic as he signaled he would cut the country’s fuel tax to counter soaring oil prices. A one penny-per-liter rise in the fuel duty planned by the previous Labour government is due to take effect in April. Perhaps we can do something similar here in America.
Option #7: “All the help we can get” which includes alternative energy
— Natural gas remains an important fuel for electricity generation worldwide as it is less expensive with natural gas than with oil as the primary energy source, and natural-gas-fired generating plants are less capital-intensive than plants that use coal, nuclear, or most renewable energy sources.
High world oil prices encourage consumers to turn to natural gas in the near term but this will only be a short term gain as natural gas supply is expected to start dwindling by 2020 – 2035.
— Solar Energy; Connects a solar thermal array with an existing combined-cycle natural gas power plant, reducing the use of natural gas when heat from the sun is available to help produce the steam needed to generate electricity.
The technology uses solar collectors with mirrored surfaces that reflect and concentrate the sunlight onto receiver tubes filled with a heat transfer fluid. After being heated, this fluid travels to a heat exchanger where it converts water into steam, which is used in the steam turbine generator to produce electricity. Look at FPL Martin Next Generation Solar Energy Center in Martin County, FL as an example.
** Side note: There is another option involving closed land fills. To find out more about the benefits of transforming closed landfills into solar facilities, please visit: https://theheartofamerica.wordpress.com/2011/01/31/saving-the-planet-one-landfill-at-a-time/
— Hydroelectricity which uses the Earth’s water cycle to generate electricity. Water evaporates from the Earth’s surface, forms clouds, precipitates back to earth, and flows toward the ocean.
This movement of water as it flows downstream creates kinetic energy that can be converted into electricity. A hydroelectric power plant converts this energy into electricity by forcing water, often held at a dam, through a hydraulic turbine that is connected to a generator. The water exits the turbine and is returned to a stream or riverbed below the dam.
The Department of Energy has completed a resource assessment for 49 states (no report was generated for Delaware because of scarce resources). The completed work has identified 5,677 sites in the United States with undeveloped capacity of about 30,000 MW. By comparison, today there is approximately 80,000 MW of hydroelectric generating plants in the United States.
— Geothermal energy is achieved by digging deep wells and pumping the heated underground water or steam to the surface. We can also use the stable temperatures near the surface of the earth to heat and cool buildings. Read more about geothermal energy, by visiting: https://theheartofamerica.wordpress.com/2011/01/10/geothermal-debate-heats-up/
— Wind farms It is estimated that wind energy has the potential to provide 10 to 15 percent of future world energy requirements. Yet, if we can make use of ocean areas with high winds for wind energy, they could potentially generate 500 to 800 watts of energy per square meter. Though it is slightly less than solar energy (which generates about one kilowatt of energy per square meter), wind power can be converted to electricity more efficiently than solar energy and at a lower cost per watt of electricity produced. Read more about offshore wind farms, by visiting: https://theheartofamerica.wordpress.com/2011/01/10/offshore-wind-farms-a-dream-turned-reality/
If we use Saudi Arabia and IAE’s oil while working with Canada in figuring a way to turn their “dirty” oil into “clean” oil, working on our pre approve drilling projects, researching and implementing alternative energy options all the while cutting big oil’s subsidies/royalties and lessening the gas tax – we would be able to pull ourselves from this slippery slope of mass confusion and panic and possibly come out better than where we were before the Middle East upheaval.
Truth be told, it is going to take a lot of work and creativity to get this done but I have full faith in the American People to rise above, join together and do what is best for our Country in an effort to give our children and grandchildren a better life than what we were given.
Simply tapping our oil reserve because we are too lazy to research into the options will only hurt our future generation’s self reliance. We cannot allow this to happen- not when other countries are offering to help and when we have the solutions right outside our grasp.
Copyright (c) March 8, 2011. All rights reserved.