Here's an alternative view on how we can fix the problem. It does, however, require someone with the stones to make it happen...
From Jack Wheeler's (ex R.Regan advisor) website "To The Point News" (
http://www.tothepointnews.com/index.php):
HOW TO BE FREE OF FOREIGN OIL
Written by Dr. Jack Wheeler
Friday, 09 May 2008
Let's start with the bad news. Oil will be at $200 a barrel by election day, November 4th. It's baked in the inflation cake.
With inflation running at between 4 to 12% now depending how you calculate it, and the Fed funds rate at 2%, the Fed is paying its Wall Street buddies with access to its discount window to take all the money it's printing. The Fed will keep printing and giving away more money until the election to forestall the recession that's sure to hit once the printing stops.
It's also baked into the Democrats' cake. They want $200 oil because they think they are smart enough to get voters to blame Republicans for it, and that Republicans are so stupid they won't get voters to blame the Dems. Right on both counts.
As economist Robert Samuelson recently said in his column in the Washington Post - read by everyone on Capitol Hill - the single most obvious thing to do to lower oil prices is to start drilling. Drill ANWR, drill everywhere else in Alaska, drill offshore in Alaska and the Pacific, Atlantic, and entire Gulf coasts.
And this is exactly what the Democrats are hysterically opposed to. The entire purpose for their ridiculous demand the polar bear be declared an "endangered species" is that this would halt oil exploration in Alaska's Beaufort Sea. Their entire legislative plan for reducing gas prices is to attack and tax Big Oil.
In a speech last Friday (5/02), President Bush called for increased oil and gas production "in Alaska and our outer continental shelf." Nancy Pelosi actually had the Orwellian effrontery to respond:
"Drilling is the failed energy policy of yesterday that has brought us record gas prices today."
Producing more oil causes higher prices! How Orwellian doublethink can you get? She sneered at Bush's policy of increasing production and his promise to veto her party's attempt to demonize oil producers by calling it "drill and veto."
If the Republicans from John McCain on down are too stupid to take the Dems to the electoral cleaners with that, they deserve to lose.
If McCain & GOPco did have the brains, we could free of foreign oil, or well on our way, by the end of his first term. Unfortunately, they don't - especially McCain. He's so braindead he's opposed to drilling ANWR because it would be like drilling in the Grand Canyon.
But if by chance, his economic advisor, former Senator from Texas Phil Gramm, can persuade him to put national security over a howling Alaska wilderness, and get him to somehow grasp that the way to be free of foreign oil is through increased domestic production, then here's how it can be done.
First, though, a definition of "foreign." That really doesn't include Canada, which supplies 2.5 of the 11 million barrels of oil we import out of the 20 million a day we consume. And if we, or anyone, would just shoot Hugo Chavez dead, then Venezuela could dependably supply far more than the 1.1 mbd (million barrels a day) it does now.
We import a bit less than 3.5 mbd from Moslem countries (e.g, Saudi: 1.6) and Russia (0.45) combined. Throw in Venezuela and always-on-the-edge-of collapse Nigeria (1.0) and we're at 5.6 (figures from EIA). Realistically, then, if we increased our domestic production - and remember, the US is the 3rd largest oil producer in the world at 8.3 mbd) - by 5 mbd we would be virtually foreign oil free.
So - the beginning step to being foreign oil free is to realize it requires a comprehensive, full-court press to get the government out of the way. It is to realize that the hydrocarbons are in the ground on our territory, the technology exists to extract and produce them at reasonable cost, that the problem is not one of geology, nor technology, nor economics, it is political.
Which means the solution is political.
Which means removing all government-imposed restrictions making it illegal to explore and drill for oil and gas in Alaska and off our coasts.
Which means removing depreciation requirements for (ideally) any capital investment, but at the very least, for any energy-production related capital investment. 100% expensing.
Which means waiving environmental regulations, as did DHS for building the Mexican border fence, for energy production.
Which would cause, among many other things, a number of savvy businessmen and investors to call 011-27-11-441-3111 in Johannesburg, South Africa. That's the corporate headquarters of Sasol, the company that knows more about producing oil from coal than any other on earth - the technology now known as coal-to-liquids(CTL).
Producing liquid fuels such as gasoline, diesel, and jetfuel from coal is known technology. Nothing has to be invented. No Manhattan Project is required. Sasol has being doing it commercially since the 1950s. Right now, 30% of South Africa's gasoline and diesel are produced by coal.
To say America is the Saudi Arabia of coal is a gross understatement. The EIA estimates for total US coal reserves are 491 billion tons, of which 264 billion are recoverable with current technology. It takes one ton of coal to produce two barrels of oil - which means we have twice as much oil as Saudi Arabia - 528 billion barrels from coal vs. total Saudi oil reserves of 260.
At current oil prices, the value of those 528 billion barrels from US coal exceeds the value of all private property in America.
So - given ( a huge given) that a President McCain could get the political roadblocks out of the way, a smart group of investors could license the Sasol blueprints for its most recent CTL plants, and build a factory to mass produce the plants - 100 of them each producing 50,000 barrels a day at a cost of under $40 a barrel.
Placed in coal fields across the US, with pipelines and power lines put up during emplacement, within five years or so, they would be producing the five million barrels per day needed to be foreign oil free.
They would also be a net producer of electricity, with the waste heat running steam turbines for co-generation of net electric output.
What wouldn't be produced is sulfur air pollution. Each plant would take limestone (calcium carbonate, far more plentiful and cheap than coal), heat it up to make it into calcium oxide, and run the sulfur-laden flue gasses through it. This converts the sulfur dioxide in the coal flue gasses to calcium sulfate. This is very useful - as a coagulant for foods such as tofu, or with water as plaster of Paris for drywall. No more sulfur problems.
Just as useful, a byproduct of heating limestone into calcium oxide is pure carbon dioxide, CO2 - pure enough to be pipelined to any oilfield to stimulate production via injection.
With no sulfur air pollution, no Clean Air Act waiver is necessary - although CO2 waivers probably would be needed to ward off the environuts.
This is just an example of how easy getting free of foreign oil - and getting back to gas under $2 a gallon - would be. Easy, if not for the stupidity of Republicans and the green fascism of Democrats.
So it's a pipedream - but at least we can understand why it's a pipedream. Then again, we can always hope Phil Gramm can loosen up McCain's calcified brain cells.
-end article
FYI - Mark
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