Location: United States

Wednesday, April 27, 2005

Oil for Peace and Prosperity

I generally try to stay away from extremely technical issues here. I’ve had enough experience trying to talk about energy policy with people to know that their eyes will glaze over as soon as I say, “You have to understand a few things…”

However, I’m going to talk about energy policy today. Sorry, treat yourself to your favorite cookie in compensation. Thank Mainstream Baptist for bringing up the topic of peak oil to get me started on this path.

For those who aren’t up on the idea of peak oil , it’s a theory that the supply of petroleum in the ground is limited. This seems reasonable to me. Most peak oil theorists like to claim that we are past peak oil – meaning that production of oil is bound to start declining and eventually tail out. I disagree.

Using data provided by the Department of Energy’s Energy Information Agency (EIA), it’s pretty easy to see that proven reserves (that’s the amount of recoverable oil know to be in the ground) continues to rise. We actually know there is more oil now than we did last year, the year before, or ten years ago. One reason for this lies just to our north – in Alberta, Canada.

The road to energy independence is a total myth unless we convert totally from hydrocarbon based energy products. This might be a good goal for about a fifty year period. Until then, the best road for our national security lies in working with Canada to develop their oil fields in Alberta. Why? Because if Alberta were to declare independence from the rest of Canada, they would be the second most oil rich country in the world. Alberta’s oil sands hold fully fifteen percent of the oil known to be on the planet.

However, dealing with Canada would take a number of hot issues off of the political table. The recent House bill that authorized drilling in ANWR would be completely unnecessary if Alberta were further developed. It would reveal that the real issue, at least for the residents of Alaska, is the checks Alaskans get from the production of a public resource. It would reveal that the real reason oil companies are foaming at the mouth for it is simply because the US government will lease oil rights below market value .

As we look north, we should also look south. Mexico’s estimates of recoverable oil in the gulf is contested as to the amount, but not as to the existence of them. Mexico and Canada as of 2003 are the second and third largest importers of oil to the United States. Together, they supply over a third of the oil used by the United States. Saudi Arabia outranks them by only about 200,000 barrels of oil per day (which is nothing to sneer at).

None of this changes the fact that the United States will remain dependent on foreign countries as long as our energy appetite remains so high. However, in the grand scheme of things, it is better to depend on Mexico and Canada than it is to depend on the Persian Gulf. Canada is one of the most stable democracies in the world. While Mexico can’t quite claim that as true, oil revenues – if stewarded for the benefit of all Mexicans – could provide a long-term cure for much of Mexico’s internal dissent.

NAFTA was passed on the promise of improving conditions for all North Americans (except Cuba and the rest of those pesky islands). Partnering with Mexico and Canada to fully develop their oil industries would be an excellent way of doing that. Canada and Mexico would both benefit from an influx of American capital and long-term trading partnerships. Americans would benefit from more secure borders and less tendency to send our soldiers into the Persian Gulf to defend the world’s oil supply.

Peace and prosperity are nothing to sneeze at. In fact, they would be a noble goal for our energy policy.


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