David Jenkins, 3/6/2012 [Archive]

Gingrich's Gasoline Pipedream

Gingrich's Gasoline Pipedream

By David Jenkins

The new central plank for Newt Gingrich's presidential campaign is his promise to bring the price of gasoline down to $2.50 per gallon. This is political pandering at its worst and a promise that is totally divorced from reality.

Geologically, the United States sits atop less than 3 percent of the world's proven conventional oil reserves. With new drilling technologies that allow us to access deeper and harder-to-extract oil deposits, that percentage may rise, but nowhere near the point of being able to glut the world oil market and significantly drive down prices.

Our nation is already disproportionately depleting its limited reserves to produce 9 percent of current global production. To get that 9 percent, we currently have over 530,000 active wells. Saudi Arabia, by comparison, pulls out more oil with roughly 1,500 wells.

Another reality is that much of this nation's easy-to-access and cheap-to-produce oil has already been drilled and used up. The oil we currently produce includes a significant share from deposits that are more difficult to access and require a higher price of oil to make production profitable. Should the price of oil drop to bargain-basement prices, the market advantage would shift to cheaper-to-produce oil held by OPEC countries, which already hold the majority of proven oil reserves and are likely to hold a larger share in the future.

The last time gasoline was $2.50 per gallon, a barrel of oil was selling for around $60. At that price, a significant amount of U.S. oil would simply not be profitable to produce.

Gingrich also touts very speculative oil prospects and pipedream production goals as if they are a certainty. Included in his rhetoric is oil shale, a low-grade hydrocarbon more accurately referred to as kerogen. His website boasts that locked up in "oil shale" we have three times the amount of oil as Saudi Arabia.

He neglects to mention that the practical and economic viability of commercial-scale kerogen production remain elusive. Kerogen has to be cooked in order to extract the "oil," an energy-intensive process that greatly reduces the net energy gain.

He also conveniently fails to mention that kerogen has a different chemical makeup fromconventional crude oil and cannot even be distilled into gasoline. One energy expert pointed out that, pound for pound, kerogen contains about the same amount of energy as a baked potato.

If Gingrich thinks that kerogen, aka "oil shale," is the answer to high gasoline prices, he is definitely barking up the wrong tree.

When speaking about his $2.50-per-gallon promise, Gingrich cites the low oil prices of the 1980s, which he attributes to increased domestic production under the Reagan administration. As a self-proclaimed history expert, Gingrich should know he is not telling the full story. While there were modest upticks in U.S. oil production in 1984 and 1985, U.S. production levels remained below their early 1970s peak. He should also know that the mid-1980s oil price plunge was largely the result of increases in Saudi production aimed at boosting Saudi market share. U.S. oil production actually went into decline after 1985.

Even with increased production of "tight oil" in North Dakota and Texas made possible by horizontal drilling and hydraulic fracturing, U.S. domestic output last year had climbed only to levels seen in the late 1990s—before the explosion in Asian demand that has put unrelenting upward pressure on prices.

Given the global nature of the oil market and rising Asian oil demand, it is naeŻve to believe that domestic drilling can somehow insulate Americans from high gasoline prices.

As conservative columnist George Will said recently, Gingrich is peddling "economic nonsense."

Americans deserve honest solutions for lowering fuel costs and securing our energy future, solutions that diversify our fuel choices, improve energy efficiency, and gradually reduce our dependence on oil and the geopolitical and economic risks that come with oil dependence.

That is not what Gingrich is peddling. He has simply dusted off and repurposed the special interest driven "drill here, drill now, pay less" campaign that he promoted back in 2008.

Our nation's energy challenges are complex and serious. Wooing voters with the false promise of drilling our way to $2.50-per-gallon gasoline is not conservative, it's irresponsible. Whether the by-product of political opportunism, ignorance or hubris, Gingrich's fanciful approach should raise a red flag with voters. It certainly does not reflect the thoughtful leadership our nation needs.

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©Copyright 2012 David Jenkins, distributed exclusively by Cagle Cartoons newspaper syndicate.

David Jenkins is Vice President for Government and Political Affairs at Republicans for Environmental Protection (REP), a national grassroots organization dedicated to strengthening the Republican Party's commitment to responsible environmental stewardship. David can be reached at djenkins@rep.org.

This column has been edited by the author. Representations of fact and opinions are solely those of the author.




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