“Clean Your Plate”

There was an article posted on CNN Money this week that raises a point that should surprise absolutely no one during the current oil crisis: according to both Democratic Party and Petroleum Industry sources, the nation’s oil companies are not currently working something on the order of 77% of the lands (and offshore sites) they already control. Although the productivity of these sites is disputed, some sources are claiming that if full exploited, these idle leased drilling sites could produce an additional 5 million barrels of oil each day. For purposes of comparison, consider that the U.S. currently produces about 8 million barrels a day, and consumes about 21 million…

Now, by itself this wouldn’t mean much; many of the sites in question are deep-water drilling locations and remote land locations, all of which would be expensive and difficult to operate. In fact, it has often been estimated that the world will never really run out of petroleum; it will eventually just become so difficult to obtain that no one will be able to afford to use it for power, and human civilization will either find alternative forms of energy or descend back into a pre-industrial state. What makes the current revelation so significant (and so politically polarizing) is that it comes at a time when the president and his cronies are putting pressure on Congress to allow vast increases in drilling on public lands and off of sensitive coastlines…

I try to stay off of political topics on this space, since my expertise does not lie in those areas and there are already enough ignorant pundits spewing meaningless opinions onto the Internet on those issues. My field is business, and specifically Strategic Management (and the failure thereof), and based purely on the standards of my discipline, this situation is completely asinine…

Leaving aside just for a moment the enormous costs of cleaning up costal oil spills themselves in the short term, the incredible costs in terms of health care, loss of property value, and decline of the tourism industry in the intermediate term, and the almost unbelievable environmental damage in the long term, increased drilling licenses will take years (more likely decades) to produce any significant increase in the supply of crude oil, and longer still to make any difference in the price paid by consumers. Even assuming no mishaps of any kind occur in any of the new drilling sites (a possibility so unlikely as to be completely fantastical), such measures would still be NO HELP in lowering the current consumer crisis…

From a business standpoint, there is no conceivable chance of the new drilling rights the current administration is requesting bringing more economic benefit to our economy than the costs that would be incurred by doing so – and worse yet, the benefits would be reaped by a handful of industrial companies already achieving record profits every quarter, while the costs would be paid by ordinary citizens in costal communities and future generations trying to live on a blighted world. It’s hard to believe that the party that once stood for financial responsibility and intelligent use of resources (consider that conservative and conservation have the same root) is pushing this sort of short-sighted, arrogant, runaway greed…

However, I do see a solution to this whole problem. Somewhere in this country there is undoubtedly a politically neutral think-tank that has already calculated the costs of developing a complete set of new, alternative sources of energy. Let’s offer the petroleum industry all of the drilling rights they want – in exchange for that amount of money plus 10% for over-runs. Chances are, it won’t be any more than the cost of those drilling permits they want, anyway. Then let’s see if the industry people are still so sure that increased drilling in environmentally sensitive areas is really what’s best for the nation…