Cleantech Market Intelligence
Is the President “Oil-Blind”?
In articles, op-eds, and books like Power Hungry, Robert Bryce has become America’s foremost skeptic of renewable energy generation. It’s not that Bryce doesn’t like wind, and solar, and biofuels; he just scoffs at the notion that they are going to provide enough power, at low enough prices, over the next few decades to make a dent in energy demand. (Disclosure: when Bryce was editing the website Energy Tribune I contributed a few articles, and his work is mentioned in my new book SuperFuel.) Now Bryce has written an article for Slate demanding to know why President Obama is so “blind” to the big production surges coming from domestic oil and gas resources.
In 1990, Bryce writes, the United States had 33.8 billion barrels of proven oil reserves. Today that figure stands at 31 billion barrels. Over the two decades from 1990 to 2010, “the domestic oil sector produced about 52 billion barrels of oil. In other words, between 1990 and 2010, the United States produced nearly twice as much oil as we believed the whole country had in 1990, and yet at the end of that period, we still had about the same amount in proven reserves. What’s going on?”
The answer, of course, lies in the “shale revolution” – the technological advances that have allowed producers to wring oil and natural gas from so-called “tight rock,” reserves that 10 or even five years ago would have been uneconomic to produce. So far, this is inarguable. But Bryce, who has a penchant for drawing sweeping conclusions from data that could be interpreted in varying ways, goes on to claim that Obama is not only anti-Big Oil but is ignoring (or ignorant of) the economic and geopolitical ramifications of the shale revolution. Obama is “wrong about what those percentages mean, and his wrongness reflects a fundamental misunderstanding of the oil and gas industry.”
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There are two things wrong with Bryce’s argument. No. 1 is that Obama is hardly blind to the achievements of the domestic oil and gas industry. To be sure, Obama has tried to balance political demands from his Democratic base with the oil industry’s demand for more pipelines and more drilling. But here’s part of Obama’s Jan. 18 statement when he essentially put off a decision on approval for the Keystone XL pipeline expansion: “This decision … does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security –including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico – even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment.”
That is hardly the language of a man ignorant of rising domestic oil and gas production. Obama wants to move toward a non-fossil-fuel energy system while producing domestic oil and, in particular, natural gas to fuel U.S. industry and create jobs. Even Bryce would have a hard time arguing with that strategy.
The No. 2 caveat to Bryce’s Slate article is that the following statement is blatantly untrue: “Over the past few years, the oil and gas sector has out-innovated the political darlings of the moment: solar and wind energy.” Innovation in the wind and solar sectors has been second to none, without the increasingly apparent environmental damage that hydraulic fracturing, or fracking, is causing in tight-rock oil and gas production areas. As my colleague Peter Asmus has pointed out, the price of power from solar photovoltaic arrays has declined to near grid-parity levels, even as federal subsidies are being phased out. Bryce strays into ignorant territory himself when he suggests that the practice of pumping chemicals into the ground to break up geologic shale formations is somehow more “innovative” than the rapid advances in solar technology.
In reporting for a cover package on the natural gas boom for Fortune, I spoke to John Deutch, the former CIA director, now an Institute Professor at MIT. Hardly a tree-hugger, Deutch is all for the economic benefits of the shale revolution; but he sees it through a wider lens than Robert Bryce.
“I recently chaired a committee studying the environmental impacts of shale gas production,” Deutch told me. “We came to the very strong conclusion that those impacts have to go down over time if the U.S. is going to support those advances in production.
“Air quality, water quality, community effects – these are very important issues. What concrete action are we taking to reduce those problems? The answer is, ‘Not enough.’”
Taking a measured approach to energy policy, even as cheap natural gas floods the market, is what presidents are supposed to do. There’s nothing blind about that.