Dispelling the Distractions on Energy

By July 17, 2008Energy

The American Petroleum Institute sponsored a bloggers conference call earlier this week to publicize the release of the Energy IQ Survey, but the discussions with API’s President and CO Red Cavaney and Chief Economist John Felmy covered the full range of oil and natural topics being discussed by policymakers these days.

The transcript of the call is available here and you can listen to the discussion here. There’s a lot of good information on the canards upon which the “use it or lose it” promoters rely to claim America should not access the domestic energy resources now locked up by federal bans.

We found another portion of the discussion especially interesting, as Cavaney talked about the argument: “Opening Area X, Y, or Z will do nothing to affect current gas prices, so we shouldn’t do it.”

But by that logic, there’s no point in investing in alternative energy either, because it will take a long time to bring these new sources of electricity online.

Cavaney’s remarks start at the 50-minute mark:

To bring almost all of those alternative energy sources on, they’re going to encounter some of the very same permitting problems and not-in-my-backyard problems that you encounter in the oil business.

For example, if you’re going to build wind farms, they’re typically – first of all, they’ve got to be permitted in remote areas, so they have to go through some of the same kind of problems that we do when we’re out in remote areas. But equally as important, they’ve got to get the energy from where it’s produced to where it’s going to be consumed, which means they need to get right-of-ways, first of all, granted. And then, they need to get the permits to go through that. So when we think of those alternative energies, we think of them like flipping a switch and it’s on and it happens. But they’re going to be on the same queue that we’re in, going through permitting, having to go back out to the public, and also running into some of the problems with the capacity to produce the equipment and the material that is needed to get them from here to there.

The nuclear industry is seeing this in spades. And also, we’re seeing that in many cases with some of the large utilities that are trying to do things, same kinds of issues we’ve just talked about.

And Felmy points out the logical flaw in replying to arguments about the need for domestic oil supplies with “more alternative energy!”

[The] disconnect is really profound, because we hear constant discussions that we want to spend money on alternatives to help the gasoline market. Well, that’s a huge disconnect because most of the alternatives they’re talking about are electricity. We do not have a fleet of electric cars and we will not have a fleet of electric cars for a significant amount of time. And so, this whole argument is just a huge disconnect. And I share with you – I agree with you in terms of how can we bring this stuff on, and then Red’s points in terms of infrastructure of any type are a challenge.

We’ll be waiting to see if these diversionary arguments appear on the House and Senate floor over the next few days. Our bet: Sure they will. So thanks to Cavaney and Felmy for bringing a few facts to the fore.

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