While much of the nation busied itself with other events, residents along the Louisiana and Mississippi Gulf coasts “celebrated” another anniversary of the arrival of Hurricane Katrina (on Aug. 29).
Although Katrina cost $90 billion in property damage and nearly a thousand lives, many non-Gulf Coast residents have pushed the memory of the storm's aftermath out of mind. That includes some who want to gloss over the magnitude of the problems Katrina triggered in the energy sector.
A few days before the anniversary, an energy consultant wrote an op-ed piece in the New York Times de-bunking the idea of “peak oil,” the theory that at some point the world will begin to exhaust its supplies of oil, bringing the end of the so-called oil age and causing economic collapse.
Michael Lynch, the former director for Asian energy and security at the Center for International Studies, says claims the world has already used up a good portion of its 2 trillion barrels of “recoverable” oil are misleading.
“Actually, the consensus among geologists is there are 10 trillion barrels out there,” he said. “A century ago, only 10 percent of it was considered recoverable, but improvements in technology should allow us to recover some 35 percent — another 2.5 trillion barrels — in an economically viable way.”
Lynch says technological advances are making it possible to extract oil from places such as the deep waters off West Africa and Latin America, in East Africa and eventually tar sands in Canada. But we've learned that economical has come to mean different things at different times for the oil companies.
When Americans were sitting in long lines at gas stations after Katrina forced a shutdown of the oil platforms along the Gulf Coast, the oil companies said the higher prices were needed to get the system back in operation. When gasoline prices later rose above $4 per gallon, they said the billions in profits were needed due to the rising costs of exploration and production.
Experts keep saying there are no shortages of oil, but each time we have a hiccup in the supply lines, the oil companies begin ratcheting up prices like we were going to run out of the stuff tomorrow. Lynch says prices now appear headed toward $30 per barrel, but they were showing no signs of abating until a worldwide recession slashed demand.
Lynch claims we shouldn't let the false threat of disappearing oil lead the government to throw away money on “harebrained” renewable energy schemes or impose unnecessary or expensive conservation measures on the public.
Those kinds of arguments have put motorists an oil refinery explosion or another Gulf hurricane away from another round of sharply higher prices. Without those harebrained renewable fuels, consumers would be totally at the mercy of the oil companies.