The oil and gas drilling ban is now ended; the cost of crude oil has dropped by half and more; and the price of gasoline is inching downward. Finally, the energy situation appears to have stabilized. But has it? It seems quite possible that the Democrat President, Democrat House and Democrat Senate will reinstate the ban soon after the presidential inauguration. In fact, several ranking Democrats in the House and Senate have promised that the reinstatement would happen; the same group also calls for another windfall profits tax on oil companies. This controversial but likely scenario merits at least a cursory analysis.
Having spent 20+ years with a large oil company being responsible for information technology, I saw computer software control programs and networking software evolve from a finicky tool for trained experts to a reliable, critical part of the industry for everyone involved. The oil industry, like most others at that time, initially viewed data processing as a necessary evil. But big oil grew and matured, learning to use this new tool effectively for exploration, producing, refining, and the associated research and development efforts.
Two of the non-petroleum ventures of that company effectively applied computers and networking early in their operations. One subsidiary was the world’s largest producer of photovoltaic solar panels, and the other was a coal mining division that had about a 250-year supply of low-sulfur coal in a single strip mine. The cash flow (and net profits) from the petroleum operations dwarfed that of the alternative energy initiatives so that these “little sidelines” were not always taken seriously. But these “specialty boutiques” were in fact moderately large, well-managed and mature organizations.
Today, “big oil” continues to be, in reality, “big energy”, with coal, tar sands, shale oil, wind, solar, geothermal, and bio-fuels operations along with various types of energy research and development activities. We have seen in recent years a huge consolidation of U. S. oil companies, driven by the need to compete with the government-owned oil companies of the countries where most of the world’s reserves exist. However, the story behind this story is that our alternative energy research, engineering, production, and hopes for future energy sources are alive and well within that smaller number of much-larger “oil” companies.
We have no choice but to use (as wisely as possible) oil, natural gas, coal, and nuclear power as our bridge to the point at which renewable and cleaner energy sources can take over. Frustration with this reality will continue to generate opposition from (1) those who believe we can eliminate carbon combustion / exhaust products overnight and (2) those who cannot tolerate profit-making organizations. Moreover, this opposition can be wrapped up in class-warfare marketing adjectives: obscene profits, uncaring millionaires, corporate polluters, etc. It could be an easy sell to a largely uninformed public, and more than a few politicians would be proud to send their punitive legislation direct to our new President.
Those alternative energy initiatives within the large oil companies (wind, solar, geothermal, etc.) will certainly feel the pain of punitive laws, more so than their parent-company oil operations. But most of the pain will be inevitably borne by the people of the United States when they are denied the benefits from those evolving alternative energy subsidiaries. Of course, Congress would eventually realize its disastrous mistake, as in the case of the Prohibition Amendment. But can our country really afford the twelve or thirteen years until its energy program could get back on track?
It is time to grow up. No, not Big Oil—Us!
