Thursday, November 06, 2008
Odessa, The Oil Boom, and Energy Policy
A while back a reader (presumably Canadian -- my sincere apologies -- I forget who) sent along this National Post article on how Odessa is experiencing a boom even as the rest of the country looks at an economy in which virtually all of the fundamentals are decidedly unsound. The "drill, baby, drill" mindset is nonsense, representing shallow sloganeering and empty thought, but will be the vital cog in the local economy in West Texas for a long time. We are not going to achieve energy independence through drilling for oil no matter where we do the drilling. Period. I've long known this and the point was hammered home to me at the Set America Free Energy Summit in Chicago a couple of weeks back. Oil is a fungible commodity and there is no way that we can ever drill our way to a self-sustaining capacity. I am absolutely agnostic about how we move away from oil (I have my preferences -- count me in for supporting the electric car as a first choice -- but adhere to no one true faith) but move away from oil we must.
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The thing is that gas is no easy solution either (cf T Boone Picken's idea) as there is no spot market for gas and thus most of Europe is now reliant on Russia for energy supplies (Steve Le Vine's book on the battle over the Caspians reserves is well worth a read). Only if enough people invest in the infrastructure for LNG will be break free from pipeline as destiny.
Considering the massive drop in consumption since the fall of the housing market, we desparately need a Keynesian spending binge. Why not make wind power in West Texas a priority?
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