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Luke Tonachel’s Blog

Drilling is Not the Answer: Save Oil FASTER with Realistic Car Fuel Economy Standards

Luke Tonachel

Posted July 14, 2008 in Moving Beyond Oil

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Earlier today, President Bush announced the lifting of an Executive Branch ban on drilling in protected areas off our coasts. In an accompanying White House document, the Administration acknowledged that drilling will take a long time to produce any oil; in fact, even if Congress lifted the moratorium today, it would be about a decade before crude would start to flow. On the other hand, setting realistic fuel economy standards for our cars and trucks would save more oil faster than we could drill from the new areas of the Outer Continental Shelf.

According to the Department of Energy’s analysis, at peak production in 2025 the offshore areas currently under the moratorium could produce about 220,000 barrels per day. Compare that to saving over 300,000 barrels per day starting five years earlier in 2020. The 300,000 barrels per day savings come from instituting new vehicle fuel economy standards of 35 miles per gallon for model year 2015 instead of model year 2020.

When Congress passed the Energy Independence and Security Act of 2007, it required that new vehicle fuel economy reach at least 35 mpg by 2020. Between now and 2020, the National Highway Traffic Safety Administration is charged with setting “maximum feasible” efficiency levels. However, as I discussed here, the agency failed in its first attempt to set standards up to model year 2015. Their primary mistake was to assume an unrealistically low gasoline price forecast, which reached only $2.42/gallon in 2016. As part of their analysis, NHTSA modeled a higher—but still unreasonably low—price forecast that reached $3.14/gallon in 2016; in this scenario the agency demonstrated that the new vehicle fleet could reach an average of 35 mpg starting in model year 2015 using existing, cost-effective technologies.

I compared the oil savings achieved with a standard that reaches 35 mpg in 2015 vs. 2020 and found over 300,000 barrels per day would be saved with the earlier implementation. Simple, right? Just use realistic price assumptions and the Administration can save drivers money at the pump long before drilling produces a drop.

And that’s just the beginning. As described here, efficiency and other clean energy oil savings easily trump drilling production beyond 2020. Clean energy solutions are simply the best way to provide lasting relief to American consumers.

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Comments

Dan TroutmanJul 15 2008 04:58 PM

Increased drilling (onshore and offshore) IS part of the answer to America's national security. No one is claiming that additional drilling will ease prices - but rather it will further expand the known petroleum reserves accessable to the nation. Additional domestic oil sources started now for use in 5-10 years will ease the shock of dramatic production decline. Having this oil will allow a cheaper and smoother transition to other transportation fuels. At some point in the future, the black gold will become too lucrative to ignore as the world SCREAMS for every last drop.
I suppose Congress will ban every vehicle not getting 35 mpg in order to save fuel!? The studies assume that the majority of Americans will purchase a NEW more fuel-efficient vehicle in order to make the stated savings claims. (The fleet fuel efficiency standards are a joke. XZY company can produce 2 vehicles: 1 that gets 10mpg and 1 that gets 100mpg. The XYZ fleet average is 55mpg.)
In spite of howls of protest from so-called "evironmental" groups, the real solution will ultimately be a combination of increased petroleum production (drilling) and increased fuel efficiency (driven by world market demand and prices). Just saying NO to all new drilling is incredibly naive in my opinion.

Lee MorrisonJul 15 2008 09:50 PM

Conservation and efficiency are virtuous - great in fact but, they only delay the exhaustion of known petroleum reserves. You are correct that it takes 5 to 10 years to find and develop a new offshore field. Therefore, the most sensible time to begin the hunt is yesterday!

Meanwhile, a crash program to revive the U.S. nuclear industry will cushion the shock when the oil really runs out, by making an electric transportation system feasible.

"...the offshore areas currently under the moratorium could produce about 220,000 barrels per day." The folks at DOE must have one heck of a crystal ball. The potential could be several times that or, it could be zero. To get the answer, one has to ask the question. Brazil (more progressive than the U.S.A. and soon to be energy independent) has been finding that much every year.

BTW, I'm Canadian and don't have a dog in this fight. "We're alright Jack" but, we can't provide the U.S. with 20% of its oil imports indefinitely. Please show a little initiative folks because, the economic health of the entire world depends upon a thriving U.S.A.

Earl KillianJul 16 2008 01:35 PM

I disagree with Dan and Lee above; Luke is correct. Efficiency has the potential of another Ghawar; US off-limit areas are tiny in comparison. Luke should extend his analysis to 2040; the savings will be even more dramatic. Efficiency alone should be our bridge to non-fossil passenger vehicles.

Unlike small oil fields, efficiency is the resource that keeps on giving. Even when those fields are empty, efficiency will still be reducing our consumption of whatever fuel we will be using. (I hope that fuel will be sunlight turned into electricity and fueling plug-ins, but it would just as well benefit an ethanol or algae biodiesel fleet.)

Similarly renewables are what provide for steady jobs. As Kentucky runs out montaintops, the coal jobs will run out, and Kentucky will be left desolate flatlands. In contrast, wind and solar jobs are sustainable.

Dan TroutmanJul 17 2008 10:30 AM

Efficiency can only do so much - it can't overturn the laws of physics. At some point, those "ultra-efficient" vehicles cease to have usable payloads. They'll be good for those weekend-environmentalists that commute to work in the big cities, but won't have the hauling capacity for farmers, ranchers, small businesses, etc.
I'm all for renewable energy, but it's not going to be able to solve our TRANSPORTATION problem in time.
Let's flatten out those mountaintops and use the coal to produce "coal-to-liquid" fuels and then put wind turbines and trees on them when we're done. Mountains don't last forever, mother nature is eroding them anyway. Man is just accelerating the process! :)
Thanks for allowing me to post. :)

raymond fosterJul 17 2008 01:10 PM

You are all wet behind the ears if you think coal is not the way to go. All mining laws require mining companies toreclaim lands after mining an area, WE in West Virginia, already have 30 old mine sites that have been reclaimed and wildlife abound in those areas. We even have an 8,000,000 dollar High School on one of the sites, and a 17 acre lake on another, with a lot of fish I might add. Clean coal is the way to go.

raymond fosterJul 17 2008 01:27 PM

Bio-fuels would be great but what happens when you have a year like 2008, with all the floods in the corn belt, not to mention already 67 tornados already this year, then you have a shortage on fuel,hence the price goes up. anyway unless you can afford to trade which I cannot what do you do my car will not run on lower than 87 octane which most bio-fuels are 85 octain. raymond

Dan TroutmanJul 18 2008 12:49 AM

Drill Offshore Now to Save the Ocean!

NRDC and other evironmental groups should be supporting immediate drilling of offshore shelves and here's why:

Offshore oil is a fact. It has already been discovered and is no secret. A valuable resource such as petroleum will be tapped to meet worldwide demand until the last drop is exhausted. (If we're lucky, America might wean itself off of oil for transportation, but the poorer nations won't be able to.)
It is only a matter of time before the offshore oil is recovered. It might be 5, 10, or 20+ years, but it WILL be tapped eventually. WHEN (not if) the price per barrel reaches $500 or $1000, the lure of offshore "black gold" will be too tempting to resist. With worldwide oil supplies running out, you can bet that the oil industry will be lobbying the Republican or Democratic Congress to lift the ban on offshore drilling. There will be huge sums of money donated to campaign funds and the potential for serious unethical behavior will be much greater as the price of oil skyrockets. Companies and unscrupulous individuals will be much less inclined to care about safety or the environment with oil at $800bbl. (Take a look back in history at all of the gold rushes.) Get the oil at any cost will be the theme of the future as world supplies run out. It sounds counterintuitive, but the best method of saving the ocean from future disasters is to take the oil out NOW while it's only $100-200bbl. Allowing companies to extract the offshore oil now while oil is still relatively cheap allows the government to enforce existing safety and environmental regulations. Using the latest drilling methods can drastically reduce damage to sensitive reefs, etc. Once all of the offshore oil is extracted in an orderly manner, there won't be a crazy push to extract the oil in later decades with much less regard for the environment.
Get the oil out now and prevent an unsafe wildcat blitz later.
The oil WILL get tapped one day. It may not be in 5, 10 or 20 years, but it WILL get tapped. The question is how and when. Let's do it in an orderly manner now and avoid the future "get the oil now at any cost" approach that will have serious consequences for the ocean and its inhabitants (if they're still around.)
Sort of begs the question: If the ocean's wildlife die off any way from pollution or overfishing, why bother worrying about oil spills?
I certainly hope that it doesn't come to that.
Thanks for allowing me to post.

Helen A. SpaldingJul 18 2008 04:34 PM

Strange as it may seem, one T. Boone Pickens, not exactly known as an enviornmentalist, has a plan, and is putting his money where his mouth is. He KNOWS that additional drilling isn't the soluion, and is investing in wind and solar power. Of course, he hopes to make money from this, and probably will, but his is a voice which resonates with the oil cartel currently in control. He is also supporting increased milage requirements for all internal (infernal?) combustion engines, and conservation. Conservation alone will save more oil than can be pumped out of the coastal areas and ANWAR together.

Dan TroutmanJul 19 2008 01:09 AM

As a Texas rancher, I'm well aware of T. Boone Pickens' plan. In fact, I'm surprised that it hasn't garnered more attention from environmental groups. Ironic that they ignore a former oilman who is spending nearly $350 million on wind turbines in my area, but fawn all over another "fluffy" speech from Mr. Gore (who to my knowledge has contributed NO personal funds to combat global warming.)
Banning offshore drilling only makes it a more lucrative target for environmental mischief in the future as world oil runs out. :)

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