Why Anger Towards BP is Largely Misplaced
Like anyone who gives a damn about anything, I too have been watching the BP oil spill with horror. It is becoming increasingly clear that this is well on its way to becoming an unprecedented ecological disaster for North America, perhaps our Chernobyl. At the least, it is likely to have environmental ramifications for decades to come and may prove to be a watershed moment in American energy policy as the images of futile technological efforts to stop the leak begin to inhabit our collective consciousness alongside the terrible images of ruined wetlands and the gruesome wildlife casualties we have inflicted.
But I have also experienced growing horror as I witness the inadequacy of our public debate about oil, energy, and the environment. True, the media has done a decent enough job of broadcasting unvarnished images of the depths and scope of this ecological tragedy, and has been willing to hold both BPs and the governments feet to the fire. But a broader discussion of oil and energy, at least one that demonstrates a basic understanding of either the economy and geology of energy, has been negligently absent.
Like most people, I now scowl at every BP station I drive past and can conjure up alternative images of what a BP corporate “top kill” might involve. But I also believe that anger and outrage towards both BP and recent federal energy policy and regulations are largely misplaced. I am also convinced that while broadcast and print journalism have a duty to provide a larger context for a debate which might begin to help us aim our criticisms and complaints with more effective and deserved precision, I believe that journalists have instead been complicitous in providing easy targets for outrage rather than encouraging deeper (if any) analysis.
Not that we shouldn’t be angry and sad at what we are doing to our only planet. But to the question of “why is BP undertaking such risky drilling,” we hear only a limited range of answers. Of course BP is a greedy corporation interested only in its shareholders profits—this should go without saying. And, it turns out, BP seems to have fostered a culture of risk-assessment which feared inefficiency more than the consequences of an accident which would of course threaten the lives of their workers and the ecosystems in which they were already trespassing with little care. Obviously, too, federal regulators had become too cozy with the corporations under their jurisdiction, over-determined by way of the Bush/Cheney pro-oil and general anti-regulation mentality.
But if we rest satisfied with these answers, and at this point turn to our facebook petitions, to our personal boycotts of BP (in favor of Exxon Mobil or Royal Dutch Shell?), we probably won’t consider further what is driving this risky off-shore oil exploration. Off-Shore drilling, as with increased attention to arctic, heavy-oil, or tar-sands, is not the easiest way for an oil company to pursue profits. An important concept for energy analysis is Energy Return on Investment (or ERoI). This refers to the amount of energy it takes to extract energy. While East-Texas oil fields in the 1930s provided and ERoI of about 100-1 (only 1 barrel of oil was needed to extract 100), the ERoI of an offshore oil well is down to about 4-1. If there was any more of this low hanging fruit, the sort found in the Texas or Mid-East oil booms, we can be sure BP and all the others would not be bothering with high risk, low gain ventures.
For these ventures do have an astounding risk to benefit ratio. According to BP, the Maconda oil field in which the Deep Water Horizon was drilling contained an estimated 50 to 100 million barrels of oil. This may seem like a lot, unless one pauses to make a simple calculation. With a world-wide liquid fuel consumption of about 85 million barrels per day, this entire oil field could over its entire life-span provide only 14 to 28 total hours of world energy capability. In the light of the sort of basic math that neither our journalists nor our government sees important enough to share, if they’ve even performed it themselves, this sort of off-shore oil quest seems a bit desperate. This desperation instead looks pathetic and just plain depressing if you take enough time to note that the total amount of oil spilled as of today would have provided enough of the world’s oil supply to last about 35 minutes. Consider the overall loss of marine wild-life and local livelihood lost and perhaps irreparably damaged for a half hour of energy. This high-stakes gambling, the sort of gambling that humans are in fact making with the very inhabitability of our planet, is not driven simply by corporate greed or by lax government regulations.
It is driven by us and our insatiable thirst for oil. But our cultural ignorance concerning basic energy numeracy, as well as an understanding of the economics of oil and energy allows otherwise intelligent and well-informed people to participate in outrage towards BP without reflecting for a moment on their own attitudes, habits, or behavior. Well-meaning and sincerely concerned people believe their responsibility ends with a scowl towards BP or by the hitting the “like” button on an anti-BP or anti-offshore drilling facebook link. While we as citizens are victims of a broad ideology of consumption and a persistent lack of information about energy, we are nevertheless responsible for informing ourselves whenever the opportunity arises. And the opportunity has not only arisen, it is screaming for immediate attention.
The attitude I see, however, is that we should simply stop offshore drilling, or should simply switch to renewable energy. It seems unaccompanied by any sense that as long as we buy it, they will drill for it. It is an attitude that doesn’t grasp the fact that if we demand an end to offshore drilling (which we should) that not only will our fuel prices go up, we will eventually, perhaps in the very near future, be presented with a far more acute situation.
The only thing simple in all of this is that if we stop exploring for oil in difficult and hazardous locations, even in spite of their low return on investment, the 85 million barrels a day that the world currently consumes and demands will soon fall to 84 million, then 80 million, and so on. The result of this sort of shortfall will not simply be $4 or $5 per gallon gasoline (about which people are more likely to take to the streets than about ecological devastation), but, unless we change our habits and expectations, a decline into permanent recession and economic depression.
I am going to set aside the issue of alternative fuels, information about which represents the other great point of energy ignorance in our culture, and the expectations about which represent an additional cultural hallucination. Our economy is entirely dependent not only on cheap fuel, but on the promise of abundant fuel, the supplies of which will always be able to meet demand. This, after all, has been the experience of industrialized civilization for the past 200 plus years. Our economic and political infrastructures and modes of organization are predicated on the promise that we can have as much energy as we want and that more energy will be available next year than this year. All economic growth has been accompanied by increased use of fossil fuels.
As if to emphasize and clarify this point, the few times in which oil supplies have experienced temporary declines (the oil shocks of the 70s) or at which oil prices have spiked (the first decade of the 21st century) the result has been rather severe economic dislocation. This is not the place for a full elaboration of the connection between monetary policy and the basic facts of currency as a measure of wealth and its foundation on the promise of continued and permanent economic growth. But let me simply note that this year’s investments make sense only given the belief that there will be economic growth and that next year’s GDP or GWP will be larger than this year’s. And let me note, also, that next year’s GDP can only be larger under two circumstances: that there will be more energy available and that people believe there will be more energy available.
Thus the desperate, drill at all costs, approach to oil. If we limit ourselves in such a way that there will only be 84 million barrels of oil available per day next year, the economic system breaks down. And as we should all realize, a recession of 2% doesn’t simply mean we all have to “make do” with 2% less stuff. This is what gives politicians and economist insomnia, and what allows them to accept fully unrealistic projections such as both the supply and demand of oil at a level of 120 million barrels per day in 2030. From this perspective, it doesn’t make sense to put this sort of limits on ourselves, and this is why we don’t and probably won’t.
Though the problem with this sort of approach is that even if we don’t place limits like this upon ourselves, either the mere facts of geology or the eventual costs of environmental degradation will. Oil is a finite resource and no matter how dogged or daring our pursuit of it becomes, someday we will have to make do with less next year than we did this year. Our day of reckoning will come.
This day may come with less trauma if we make use of the opportunity presented by this national crisis and consider our energy reality with a little less of that comforting and externalizing anger and with a little more reflection on our own role in this unfolding tragedy. Our best hope is to become literate and numerate regarding our use and comsumption of energy and to attempt to set our future course with the sort of broader understanding of ourselves, our expectations, and our assumptions that has remained relatively absent from our collective thinking.