The Wake up Call in the Gulf of Mexico
Bob Bestani

The tragedy of the massive oil leak in the Gulf underscores the central dilemma we are facing in our national energy picture. Oil is getting harder and harder to find and to produce. This has forced us to go to greater extremes to find oil and get it to our refineries. The Deepwater Horizon Well that is currently the focus of our attention in the Gulf of Mexico is in waters roughly one mile deep. Other rigs are currently drilling “ultra-deep water” wells that go several miles down. We are clearly having to take bigger and bigger risks to get to additional reserves and those risks will surely come back to haunt us, just as we are seeing today.

Even then, it is clear that we cannot go on assuming that enough oil will be with us for the long term. In a sobering bit of news, the U.S. Joint Forces Command recently issued a Joint Operating Environment Report warning that surplus oil production capacity could vanish as soon as 2012, leading to serious oil shortages by 2015. Dire consequences, it predicts, could follow quickly.

Indeed, much of the rest of the world shares our dilemma. While it will be hard to predict exactly what will happen in the face of such a drastic sea change in the world’s energy supply, the report says, “it surely would reduce the prospects for growth in both the developing and developed worlds.” It may cause fragile states to become failing states and failing states to collapse, while also causing major problems for overpopulated oil-guzzling states.

What the report is essentially predicting is the advent of “peak oil”—the point at which the demand for oil will always be higher than the actual supply.

Our government needs to take strong, deliberate measures to make sure that we are prepared for the future. The fact of the matter is that we must, as a nation, move beyond petroleum and other hydrocarbons as our principal fuel source. While we cannot do so in the short term, this must be a priority among our longer term goals.

Sadly, we have been quietly ignoring the problem. It is time to dramatically step up our research into clean energy. Technology companies routinely spend between 5% and 10% of their revenue on research. Energy companies are currently spending less than one quarter of 1%. At the same time, the federal government is spending less than $3 billion a year on energy research as compared with $25 billion on health care research.

There are many things we can do to reduce our dependence on imported oil. One easy measure we can take is to properly exploit our enormous shale gas resources. The United States has what probably amounts to the world’s greatest gas reserves – to the point where we are already exporting gas to Asia and facilities are being constructed to dramatically ramp up those exports. We could, for example, easily re-engineer our cars to safely burn natural gas as opposed to gasoline – just as India has done. The result would be much lowered use of oil and much cleaner air.

We must begin to end our addiction to oil. The truth of this is clear when you think of the environmental damage associated with what we are doing today, as well as the problems with our national and economic security.

Most of the industrial countries of the world, even countries like China and India, are moving to less reliance on oil and a greater reliance on clean energy such as gas. We can and must do so as well.

Bob Bestani is a businessman and economist who has spent twenty-five years of his career in the energy industry. He is also candidate for the U.S. Congress in NH’s 1st Congressional District.