Sunday, January 01, 2006

Russia Creates Gas Crises

As if oil supplies weren't already strained to the max, Russia has generated an artificial constraint over price squabbles with rival Ukraine that is starting to impact gas supplies in Europe. (BBC: Ukraine gas row hits EU supplies). Gazprom, the state-run Russian supplier cut pipeline delivery to the Ukraine today after they were unable to resolve politically charged price differences. That also impacted supplies to parts of the EU since they share the same pipeline.

The Ukraine currently receives 30% of its oil supplies from Russia, making it unlikely that the average Ukrainian will not be impacted during the typically harsh winter. It's also likely that prices will rise throughout the EU as they scramble to replace the oil that is not flowing to them through the Ukraine. Should this dispute linger, that will also have an impact on world-wide oil prices as other OPEC nations make up the slack.

All of this underscores the very precarious nature of the world's oil supplies. The vast majority of the world's oil is in the hands of either unstable or adversarial nations. Between the oil in the Middle East, oil in Russia, and oil in South America - primarily in Venezuela, Ecuador, Bolivia, and Argentina - there is a glut of oil under the control of nations that are at best US adversaries.

That our oil supply, and therefore our economy, is being juggled by our enemies should come as no surprise. The warning signs were there in the 1970s, first with the Arab Oil Embargo under President Nixon and again under the alleged Oil Shortage crisis under President Carter. Both of those energy crisis resulted in a doubling of the price of gasoline in the US, first to the $0.55 per gallon range under Nixon to as high as $1.20 per gallon under Carter. In fact, prices remained at that last level for the better part of two decades before the latest crisis again more than doubled prices.

The warning signs have been there for 35 years, but so far we have yet to learn our lesson. Still there are no serious attempts to both reduce our dependence on foreign oil and also to eliminate our dependence on petroleum products in general. For the former, we have a thirty-year supply of oil sitting beneath the Arctic yet the environmentalist lobby is still holding Congress at bay, refusing to allow us to tap that resource. That is short-sighted foolishness since at the very least it would buy us time to develop and alternate source.

As to the latter, there are very few serious plans even being discussed, and if there is serious progress being made it's a very well kept secret. Hybrid vehicles are not a solution. There's too great a dependency on both gasoline and on electrical recharging of the batteries, which also ultimately uses fossil fuels. Ethanol and soy based fuels are not a solution either. All that will do is raise the price of agricultural products while putting a strain on both our food and energy supplies the first time there's a drought. Wind or solar energy are not solutions. There's not enough of either to make a dent in the nation's energy demands. Conservation is a quaint concept, but there shouldn't be any need to reduce our standard of living or modify our lifestyle when there are viable options available to us that would meet our needs.

When it comes to the replacement of fossil fuels, the answer is hydrogen fuel cells. Hydrogen is the most abundant element in the universe. It's bound in virtually every substance on the planet. The supply is virtually inexhaustible. As to electrical energy demands, the solution was found decades ago. Nuclear energy has proven to be the most effective method of generating electricity given our current technology. If we can ever perfect nuclear fusion, that would be even more desirable, but for the present we must settle for the fission reactors that environmentalists are so dead set against.

It's time to get serious about our national energy crisis. It's time for congress to take action. What we need is simple, and it's a challenge I place before congress for 2006:
  • Open the arctic for oil drilling. As part of that bill mandate that an alternative fuel source must be developed and in production before the end of 2031.
  • Relax environmental requirements around oil refineries. Until we develop an alternate source, we must reduce the costs of refining oil in this country, and we must increase our national capacity to do so.
  • Allocate significant funding towards hydrogen fuel cell research, again with a goal that we must be off the dependency on fossil fuels by 2031.
  • Enable the production of more nuclear power plants, especially on the east and west coasts.
As long as we do nothing, the crisis will continue to deepen. We will continue to be at the mercy of our adversaries in the Middle East, Russia, Venezuela, Ecuador, Bolivia, and Argentina. We have the ability to take control of our own energy needs. The question is, do we have the will to do it?


1 comment :

yuvakuran said...