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Unilateral disarmament in the economic war for oil
Posted by: McQ on Tuesday, May 09, 2006

Oil is the fuel for the engine of our economy, whether we like that or not. Recently, oil has become an increasingly sought after commodity for the over-heated economies of China and India. That has led to scarcity and price increases.

And the US? We seem to remain in denial. We still seem to believe that conservation and the pursuit of alternative fuels are the answer to any oil crisis. We seem unable to understand that the rising prices are a result of that growing scarcity and aren't going away anytime soon. And high prices will eventually effect our economy negatively. We seem equally unable to fathom that the alternative fuel rescue is years, if not decades, away. In the meantime we seem to have unilaterally disarmed ourselves in the global economic war for oil.

For example:
With only modest energy needs and no ability of its own to drill, Cuba has negotiated lease agreements with China and other energy-hungry countries to extract resources for themselves and for Cuba.

Cuba's drilling plans have been in place for several years, but now that China, India and others are involved and fuel prices are unusually high, a growing number of lawmakers and business leaders in the United States are starting to complain. They argue that the United States' decades-old ban against drilling in coastal waters is driving up domestic energy costs and, in this case, is giving two of America's chief economic competitors access to energy at the United States' expense.

"This is the irony of ironies," Charles T. Drevna, executive vice president of the National Petrochemical and Refiners Association, said of Cuba's collaboration with China and India. "We have chosen to lock up our resources and stand by to be spectators while these two come in and benefit from things right in our own backyard."
It's not only ironic but stupid as well. For whatever reason, we seem to refuse to understand that whether we do it or not, these assets are going to be exploited by someone. So here we have Cuba, in conjunction with China and India, planning to drill 45 miles off the coast of the US.

And what do we do?

Sit and watch.
The Interior Department estimates that the Outer Continental Shelf has more than 115 billion barrels of oil and 633 trillion cubic feet of natural gas available for extraction. At current levels of consumption, that would satisfy the nation's oil needs for about 16 years and its natural gas needs for about 25 years.

Opponents of drilling in United States waters are equally passionate in their arguments, saying that drilling for oil off the coast poses environmental risks and that drilling for finite supplies undermines long-term conservation solutions. They also say modest supplies of additional oil would not necessarily lower gasoline prices in the United States because oil is traded on a world market.
Question: who is going to monitor the environmental impact from Cuba's drilling? More importantly, how will they block it?

As to the claim that "modest supplies would not necessarily lower gasoline prices" in the US: true. But that's only if you limit exploitation to an area or two. Massive new supplies coupled with increases in refinery capacity certainly will lower gas prices in the US and elsewhere.

The fact that Cuba has leased 59 areas within the Florida straits should finally drive home the fact that the policies we have followed since the 1980s are self-defeating. It is possible, given advances in technology, to safely drill offshore. If Katrina taught us nothing else, it should have taught us that. And with Cuba planning on drilling in the Florida straits it should become equally clear that if we don't safely exploit those resources, someone will (and perhaps in not as environmentally friendly way as we might).
"My fear is for the future of America," said Representative John E. Peterson, Republican of Pennsylvania, who has collected more than 160 co-sponsors for a bipartisan bill that would open coastal waters for development of natural gas. "We have a natural gas crisis, and it's the biggest threat we have to the American economy."
It's time. Support this effort.
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Previous Comments to this Post 

And, of course, the Cubans are certain to exercise great environmental sensitivity in their activities.
Written By: Dave Schuler
Why should we? We can eventually buy discount oil from Chavez, so all will be alright...
Written By: shark
URL: http://
We still seem to believe that conservation and the pursuit of alternative fuels are the answer to any oil crisis.

Good point. People need to understand these are only two measures that must be undertaken. There many more and opening up areas for drilling, previously off-limits, is a big one.
Written By: LASunsett
Our policy towards cuba is as outdated as the people who support it. Castro isn’t working with Osama. Comunism is dead. If we would just remove sanctions with Cuba, we would gain access to their markets and their resources. We are only huting outselves. By letting the Chinese make large investments without so much as a US counter offer on the table we are giving them a foothold 90 miles from our shores that we will live to regret.
Written By: cindyb
URL: http://
On the other hand, it’s nice to have a time-consistent policy so that our threats of sanctions carry some force.

Castro’s a dirtbag, his style of government is a disgrace, and we can wait until he dies to work a little magic on the regime so that we can do tons of business with the people of Cuba.
Written By: OrneryWP
URL: http://
Comunism is dead.

Please tell those cadavers to stop pointing nukes at us, thanks
Written By: shark
URL: http://
Let’s think ahead, shall we?

How are we planning on fueling our new electric generating plants? If you look at the permitting queue at the California Energy Commission as an example, it will all be with natural gas.

So how are domestic and Canadian supplies of natural gas? The answer is at post-peak production rates, i.e. declining. We might be able to boost production by freeing currently prohibited areas for drilling but that would only compensate for depletion of existing supplies. That’s why the big push to get liquefied natural gas (LNG) terminals built up and down our coast lines.

What we’re doing is creating the same problem of foreign dependency that have in transport fuel but with electric power burning imported LNG. Why can’t we see that problem coming and head it off by building nuclear power plants instead of LNG-fueled power plants?
Written By: Whitehall
URL: http://
How about Nuke power plants? I’ve never understood why a small vocal minority (environmentalist) is dictating our energy policy (for years).

Please don’t say Chernobyl that graphite design was never even considered in America. And as for Three-Mile-Island. That was caused by a design change by a contractor who ran electrical lines for primary and secondary (Back up) systems in the same electrical chase. (A big no no) which will never happen again. The containment bldg caught most of the radioactive leakage and a small amount escaped (with no long term effects).

What I will admit though is spent fuel rod storage needs to be addressed.

Europe has had many operating Nuke power plants for years and new ones are coming on line all the time. If those Euro-weenies can do it why not us?
Written By: McQ2
How about Nuke power plants?
That would certainly help to some small degree, but the bulk of the US consumption is mobile, liquid fuels. Vehicles. Unless we switch to electric powered cars, nuclear power won’t help that.
Written By: Jon Henke
You are absolutely right.

The potential for small developing nations to damage the world environment is small currently but will grow exponentially in the decades immediately ahead. This is why the Republicans’ disregard of measures attempting to legitimate international standards for environmental protection, such as the Kyoto Protocol, is so disturbing.

Post script: There are a lot of liberal environmentalists who think nuclear power is a good idea, like the co-founder of greenpeace.
Written By: TheJew
The Kyoto Protocol is bad science and not economically viable.

Just ask Canada

Also the emerging nations of the old Soviet block are among the worst polluters for example:
OECD report: Czech Republic among worst polluters
The Czech Republic remains one of the worst polluters and least efficient users of energy within the Organisation for Economic Co-operation and Development, an OECD report says. The production of hazardous waste remains three to four times higher than elsewhere in Europe and limits on the levels of dangerous substances in water were often significantly exceeded during the review period between 1998 and 2005. Moreover the poor air quality, particularly in Prague and the industrial regions in the north and north east of the country pose a threat to people’s health, the report warned.
Unfortunately the Kyoto Protocol is bad science because the radical environmentalists have hijacked the movement and it is a thinly disguised anti-capitalist political movement.
Written By: McQ2
what is wrong with your filter?
Written By: kyle N
To h.eck with it, after we b.omb I.ran, we sh.ould just in.vade C.uba. kill C.astro, and put a lot of ca.sinos back in Hav.ana, make it a place to p.arty like it was before
Written By: kyle N
I had to put periods in the words in order for the filter to take it, what was the banned word?
Written By: kyle N
Cindyb is right. This is a commercial success gifted to the Chinese by the American embargo over Cuba. Probably in a few years Castro will die / the embargo will be lifted and the Chinese will be able to profit by selling gas to the largest local market - you.
Written By: Unaha-closp
URL: http://
Minus the period, "ca.sinos" was banned. Gambling interests are big-time spammers.
Written By: Jon Henke
Regardless of whatever oil policies the US decides to follow, exploring alternative fuel sources should become a chief priority—and for the very reason that any alternative fuel solution is many years away. The sooner we start, and the better funded this research is, the better our chances of making a smooth transition are, when oil resources either inevitably dry up or become prohibitively expensive.
Written By: Fat Steve
URL: http://
Jon Henke,

My point was that today, it’s transport fuel - tomorrow, it will be electricity unless we change policies today (or better, yesterday.)

No, current nuclear technology can’t do much for transportation beyond its general powering of mass transit systems that are electrified. Tomorrow? There are several feasible paths to powering our cars indirectly from nuclear power.

Also, don’t understand what you mean by "the bulk of the US consumption is mobile, liquid fuels". Do you mean total energy? Transport is only a fraction of total US energy consumption, although a vital one and one for which we have almost no substituted for petroleum today or in the near term.

BTW: keep up the good work.
Written By: Whitehall
URL: http://
It seems to me that dependence on foreign energy supplies now, when we still have significant domestic reserves, is better than depleting our reserves in the short term and leaving ourselves increasingly vulnerable—-strategically, as well as economically—-in the long term. Opponents of immediately boosting domestic production label that policy as the "Drain America First" platform.

Right now, hydrocarbons are globally traded commodities over which consumer nations have little if any control. As global reserves begin to run dry, however, the market may very well fall victim to narrow security concerns. (Oil products have important military applications, after all.) There might be some merit in leaving our domestic reserves alone for as long as possible.
Written By: Nathan Saper

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