Enjoy the low gas prices while they last
By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association
Anyone who follows gas prices realizes they can change quickly. Fortunately for our consumer society, temporarily low prices have allowed people to spend a little more money on necessities, car travel and gifts for the holiday season. Some experts believe prices could stay low for another year or two since following their recent meeting OPEC (Organization of the Petroleum Exporting Countries) announced they will continue producing oil at current levels despite the global glut in oil supplies.
This past Saturday, Nov. 29, oil prices fell to a four-year low of less than $68 per barrel. Historically, falling oil prices have served as an economic stimulus. They also allow some OPEC countries to recapture the market share they lost to the higher costs of oil shale producers in the U.S. If prices remain low, many oil producers would no longer be profitable and global oil production would drop.
In an article published in the Huffington Post, Davis, Hughes and Lewis cast doubt on claims that America is headed toward energy independence and economic security. While U.S. oil production is close to that of Russia and Saudi Arabia, both of those countries are able to meet their own energy needs while exporting more than half of what they produce. While U.S. oil production is up, we still need to import nearly 7 billion barrels per day, which is roughly a third of our consumption. Our oil import needs leave us vulnerable to disruptions in supply.
Hughes reminds us that light oil production could peak between 2017 and 2021, as most comes from relatively small sweet spots within the Bakken and Eagle Ford formations. The wells decline quickly; about 40 percent of existing wells must be replaced each year to keep production from falling.
Continued drilling requires rising levels of expenditures. Over the last nine years, global oil capital expenditures have doubled while supplies have only increased by 6 percent. The authors consider the spike in U.S. crude oil production enabled by fracking as a short-term event.
The search for unconventional sources of oil and natural gas is costly, entailing higher economic and environmental risks and increases in global carbon emissions. We know from previous oil accidents in the Gulf and Alaska their dangers to ocean life and local economies.
Given the fossil fuel interests of the new Congress, the stage is set for another push for rapid development of unconventional sources of fossil fuels with minimal environmental safeguards. A nationwide effort to dismantle renewable energy and efficiency standards also serves to reinforce our reliance on fossil fuels.
The latest report from the United Nations International Panel on Climate Change points out the growing threats of climate change and calls for aggressive global action to avoid the worst of its impacts. Many coastal cities are already implementing plans to lessen their vulnerability to rising sea levels and increased intensity of storms.
A sustainable energy future relies on increasing energy efficiency and accelerated installation of renewable energy sources. It is a global growth industry with numerous economic and environmental benefits that strengthen local economies.
Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail firstname.lastname@example.org.
From the Dec. 3-9, 2014, issue