Energy

Accidents and our energy straightjacket

On April 5, there was an explosion at the Upper Big Branch coal mine in West Virginia; 29 lives were lost. Fifteen days later, the Deepwater Horizon drilling rig exploded and sank in the Gulf of Mexico; 11 lives were lost. These two human and environmental tragedies share more than just the month of April. They both, sadly, provide important headlines that pull back the curtain on the extent of our national energy appetite. And they should be a stark wake-up call for the large numbers among us who take for granted our access to reliable and affordable energy as to the complexity of our nation’s energy DNA.

As Congress hauls the variety of actors involved in the foregoing incidents to D.C., it’s worth setting forth a few points to consider.

First and foremost, both accidents must be fully contained. This, obviously, remains a tremendous challenge for the spewing well in the Gulf. But let’s be clear: Any serious inquiries, fact finding commissions and other clamoring for immediate answers will do little good until the current catastrophe has been satisfactorily brought to an end. Diverting the attention and resources of those involved serves no effective near-term purpose and does not seem to bring us any closer to resolving the current mess. Efforts to expedite the end of the spill should be at best apolitical and at worst bipartisan.

And we should use this occasion to refresh our collective memories why we are digging for coal in West Virginia and drilling for oil in the Gulf of Mexico. Our nation lusts after energy; there is literally nothing we do on a daily basis that doesn’t have an over-sized dependence on energy—electricity, gassing up our cars, air travel, plastics, medicine. It is literally our daily bread. More specifically, let’s fully grasp these central facts: Coal powers roughly half of our nation’s electricity needs and the offshore rigs in the Gulf provide about one-third of domestic U.S. oil production. Coal and oil are two of the most critical natural resources we require to keep our cars moving, our homes lit, our myriad devices charged and our country’s economy alive.

We’ve heard a lot about the Santa Barbara oil spill of 1969, how it led to the modern environmental movement, was the progenitor of Earth Day and other important facts. But, perhaps just as relevant since that important demarcation in our nation’s history is the reality that our demand for oil has gone up over 35 percent over those same 40 years.

We constantly hear about the global effect of China’s growth and concurrent energy demand, but here at home we too have been nothing less than voracious in our consumption of oil and thus forcing our imports to greatly expand. Many point to the national security element and fiscal imbalances caused by this immense demand growth. But perhaps what might be most relevant is that we have now largely transferred on to those we import from all of the myriad elements of the extractive resource industry. We have off-shored a great deal of our responsibility.

Take Mexico. The U.S.’s southern neighbor is our third largest supplier of oil. All oil exploration and production in Mexico is the province of the state and its monopoly Pemex. The Mexican treasury counts on oil to the tune of about one-third of the budget. The pressure to maximize economic rent from oil is enormous in Mexico.  And sadly, their record is far from impeccable. Indeed, explosions, spills and improper maintenance litter the Pemex’s recent operational history. This is not to pick on Mexico as others have written similar anecdotes about Kazakhstan, Nigeria and Angola.