It's not at all difficult to understand why the general public is confused about energy, and oil supply in particular, these days. Perhaps the most confusing feature, at least to me, is the apparent use of one particular fact to derail the US Outer Continental Shelf drilling discussion.
For several weeks, I have been mulling the need to comment on the excessive, euphoric responses to the supply opportunities represented by recent deepwater discoveries, Jack in the US Gulf of Mexico, and Tupi, Jupiter and Carioca in Brazil. All of us in the industry recognize that first oil from these fields will be at least 10 years in the future, if that soon. The euphoria is misplaced in that these discoveries are not going to impact gasoline, heating oil and jet fuel prices for a very long time. The discoveries do mean that technology and industry capabilities are continuing to evolve and we are not running out of recoverable oil.
Recently, US politicians have been debating the merits of opening more of the OCS to exploration and production as a mechanism to reduce oil import levels. Their arguments have the implicit recognition that the action of opening up the shelf will not solve existing price problems for the US consumer but will be one of many actions toward a long-term solution. Critics emphasize this will not help to lower prices in the near future. They say, if an action doesn't impact tomorrow's supply and price, let's not embrace it today. Perhaps those with euphoric positions around new discoveries and those critical of opening up the US outer shelf actually both hold a distaste for increasing the oil supply in the light of potential ecological damage?
Herein lays the quandary. Some choose to ignore the fact (deepwater discoveries have long lead times) on one hand to make a point that we are not running out of oil in the long term and so we should not be overly aggressive about finding and developing more now. Others exploit the long-lead-time fact to argue against exploring and drilling today because it will not help with the immediate price crisis. It cannot be used both ways.
Is this, in fact, an argument around potential ecological damage? If it is, we should label the debaters use of this fact as disingenuous and force a discussion on the question, "Why should other countries 'risk' their continental shelf's ecology to provide the U.S. with adequate oil supply, if we will are unwilling to help ourselves?"
If not, here's an opportunity to use facts to educate, manage expectations and assist decision-makers in reaching a consensus on how to address the country's intermediate-term energy future.
Granted development of offshore resources has a long lead time, as does most new energy supply. However, what is the lead time for the alternative energy sources touted by the no drill side?
Why is there never a challenge as to how long alternatives such as cellulosic ethanol, and even algae, will take? When, at what cost, and in what volumes will these sources be available?