Oil and Politics

The WSJ puts the Deepwater Horizon disaster into perspective and urges a measured analysis (much as I did, briefly, here), in contrast to the reaction of nearly every politician from Sarah Palin to Barack Obama. News today deepens the conundrum that we face as a society. We are stuck with a hydrocarbon-based economy for decades to come even if we are desirous to switch to less carbon-intensive energy sources. (I personally don't feel the massive shift is necessary given the speculative nature of AGW theory and the rank corruption within the AGW scientific community, and if Woody Allen or Tom Friedman made me dictator for just a short time, I'd clean up the spill and keep drilling.) So where do we get this energy and do we encourage substantial production of it so that it remains affordable? Well, today, BP announuces that its Mad Dog field in the Gulf has not the 1.5 billions barrels that it thought but 3.5 billion. (I don't have a link right now, but a money quote from the article: "So you've got a field that started out as enormous, and now it is huge, huge and one of the most giant fields in the world.") Let's add that in the oil business, estimates like this almost always low ball the eventual production of resources from wells, so let's say that we may have 5+ billion barrels here. And Mad Dog is just one of a handful of giant fields in the Gulf. And these fields are fresh, while the monster fields around the world, like Ghawar and Canterell are nearing their ends. The USA could likely be the Saudi Arabia of the 21st century, or least second fiddle to leading contender for that role, Brazil. So how do we reconcile all this with what it currently happening in the Gulf in the wake of Deepwater Horizon? As the I and the WSJ have pointed out, the oil industry has an amazing track record of safety while doing mind-bogglingly complex and technologically difficult things. The error that cause the Deepwater Horizon disaster appears to be a garden variety human error. Society is plagued with garden variety human errors that have large negative consequences and our continuing progress as a society will inevitably see more of them on our upward path. The question is what do we do in the aftermath of these events, do we retreat, say we can't do anything because we once did something poorly?

We must clean up, learn from this, go on living life, which should include drilling and grabbing those billions of barrels at Mad Dog in the Gulf.