Sunday, May 01, 2005

More Is Not the Answer

In this post, I referred to increased worldwide oil production as an advantageous consequence of drilling in ANWR. In certain respects, this is undoubtedly true.
[Drilling in ANWR] would increase the amount of oil on the global market and thus drive down the cost of energy and of other petroleum-based products. This would provide an economic boost to petroleum-based economies across the globe. The degree of impact revolves around the ultimate productivity of the project and is therefore open to question. However, at least some positive effect would be realized.
Therefore, if all you are concerned about is having lower gas prices in the relative near term, ANWR probably looks pretty good. But, even if you ignore the environmental aspects of unabated oil consumption, there are good reasons to question whether or not increasing the oil supply is, in and of itself, a good thing. To explain this I'm going to have to introduce a couple of interesting topics: the Malthusian Problem and Peak Oil.

First proposed by Thomas Malthus, the Malthusian problem describes a situation in which the rate of product demand growth exceeds that of product supply. It is most frequently used to explain our inability to eradicate hunger. The problem is that human populations have a tendency to increase at an exponential rate, while agricultural productivity does not. Left to their own devices, societies frequently find themselves at or beyond the limit of their production capacity. If an increase in food production is achieved, the population will simply grow and consume this extra production. Excess never lasts.

Like food, oil is a critical component of modern society. And, like food, our oil consumption increases far faster than our oil production increases. Therefore, production increases merely delay in the ultimate day of reckoning. Gas prices might drop temporarily, but before you know it, they are right back where they started (if not higher).

That brings us to the concept of Peak Oil. While I grew up concerned for the day when we would run out of oil, it turns out that there exists a more immediate problem. Extracting oil from the ground isn't like siphoning gasoline out of the gas tank. Instead, it follows a productivity curve. Initially, it produces oil at a certain rate. Over time, that productivity drops, slowly approaching the level at which it is no longer economical to continue operation. The amalgamation of oil well productivity across the globe allows us to generate a similar productivity curve for the Earth as a whole. Thus, it isn't that we will suddenly run out of oil, but rather production rates will slowly (hopefully) begin to fall.

In this model, the problems begin when global oil productivity rates fall below the rate of consumption. It's hard to say exactly what will occur when this happens, but there are a few factors that will determine the severity of the consequences. The first issue is the rate of production decrease. Obviously, a slow decline would be less serious than an abrupt drop off. The second issue is the level of dependence when this event arrives. The more dependent society is upon oil, the more dramatic the ramifications of short supply.

The problem with ANWR is that it makes both of these problems of worse. Due to the Malthusian nature of oil, the increased supply provided by ANWR will allow higher rates of consumption and, thus, a higher level of oil dependence. Putting ANWR online now, as opposed to sometime in the future, means that the inevitable drop in production will occur much sooner and will decline much faster. In the short run we will reap the benefits of cheaper oil, but at the cost of greater shock when the production ceiling is hit.

In light of these facts, the ANWR project seems to be an endeavor of dubious value. Again, it is unquestionable that certain interests will benefit from immediately exploiting this resource. But, I fail to see how society at large will prosper. And, if that's the case, I can't see a reason to support it.

I understand that we as a society need a steady supply of oil, and that this need creates certain problems with respect to those who would provide us with our fix. But, that's all the more reason to ensure that the solutions we pursue effectively address the problem. If they fail to do so, or if they make the problem worse, the consequences will be that much more severe. We can't address the issue of our oil dependence with canned solutions from a different era. This is a new problem and it will require new, innovative solutions. Nothing from our current bag of tricks is going to save us.

Ultimately, we may or may not find a way to avert a crisis. However, one thing is for sure. ANWR is not the answer.
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