Energy Policy: Lots of Heat, No Light
May 2, 2012
The president has repeatedly asserted that the United States cannot possibly produce the amount of oil that it consumes. To support this claim, he points to the relatively small level of proven reserves within the United States' borders, and emphasizes that this small reserve could not possibly fulfill America's enormous consumption. But this misleads the American public because it disguises the meaning of "proven reserves" and misleads citizens to believe that there remain no undiscovered oil assets, says Irwin Stelzer, director of economic policy studies at the Hudson Institute.
- In 2000 it was estimated that reserves that fit the Obama definition totaled some 20 billion barrels.
- In the 10 years after 2000, oil producers in the United States produced approximately 20 billion barrels, and yet the end-decade estimate of proven reserves was still 20 billion barrels.
- Furthermore, an element of this misleading claim on the part of the president is that it fails to account for resources that, while inaccessible, will likely be made so through technological advancements (see the two trillion estimated barrels in shale and sand).
The president nevertheless exploits the fact that America is responsible for 20 percent of global oil consumption annually but produces only 2 percent of global oil production to justify alternative sources of energy. This is deceptive, and offers only an artificial rationale for the development of alternative sources.
Furthermore, none of these alternative sources to which enormous amounts of taxpayer funding are allocated will likely prove able to fulfill future energy demands.
- Nuclear power producers are harangued by regulators and safety requirements that change constantly and hamper efforts to produce efficiently.
- Solar power has proven in many cases to be unable to operate in hot climates, and even then the electricity that is produced is enormously expensive.
- Wind farms also face numerous technical obstacles, and even then, they require substantial investment in transmission lines and infrastructure.
- Finally, many of these are too expensive to remain sustainable without government support, especially in light of the natural gas renaissance.
The president's plan for an "all of the above" approach to energy policy is disingenuous, and seeks to subvert the enormous benefits of domestic oil production.
Source: Irwin Stelzer, "Energy Policy: Lots of Heat, No Light," Hudson Institute, May 2012.
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