This guest post from Barath enriches the GESN conversation begun with CNN’s celebratory misinformation about America’s energy situation. [Update: See, more recently (18 March 2012), Zakaria error tweets its way around the world … ]
…while the truth is putting on its shoes.
The Wall Street Journal reported some exciting news not that long ago—you might have heard about it. We no longer have energy problems. That’s right, as the Murdoch headlines announced triumphantly:
CNN was obviously excited by the news, and jumped right on the story.
The Associated Press and others quickly followed the WSJ’s lead and breathlessly reported this news.
So I guess there’s no need to conserve energy, improve mileage standards on cars, build public transit, etc. Right? We have so much fuel we’re exporting it.
Ok, maybe it’s time to lace up those shoes. If we pay close attention in those stories, it’s apparent that this wasn’t much of a milestone at all, but the truth is buried deep within and reported so unclearly it’s hard to make out. The headlines, on the other hand, are designed to convey the sense that either we’re using so little oil (because of a bad economy) that we don’t need to import much or that we’re producing so much that we have extra to spare.
Either way, this story is perfectly designed to be spun against all sorts of progressive efforts to move towards renewables, efficiency, and energy independence.
Ok, let’s establish some basic facts and see what sort of truthiness the Wall Street Journal was pushing here:
- The U.S. produces on average 7.5 million barrels per day of petroleum liquids.
- The U.S. consumes on average 19.1 million barrels per day of petroleum liquids.
- Therefore the U.S. imports 11.6 million barrels per day of petroleum liquids.
So what was the article claiming? They were pretty sneaky: they were talking about refined petroleum products. Not oil, but the stuff that comes out of refineries, like gasoline. That means that we have excess refinery capacity, so some of the oil we import is just getting processed into gasoline and other refined products and then shipped out again without ever being used here. And it’s really not that big of a deal in the first place: we’re exporting only 0.2 million barrels per day of these refined products.
The Wall Street Journal managed to take a meaningless and minor statistic that’s a symptom of slight excess refinery capacity and turn it into a headline that trumpeted no more energy worries. One that got picked up by every major media outlet, transmogrified each time like a game of telephone.
Jeffrey Brown explains the underlying real truth on the ground—what’s going on here:
Therefore, the primary contributor to the US becoming a net exporter of refined products and the primary contributor to the decline in US net oil imports is declining consumption in the US, as the US and many other developed countries have been forced, post-2005, to take a declining share of a falling volume of Global Net Exports (GNE), which are calculated in terms of Total Petroleum Liquids.So, the WSJ reporters are taking a symptom of Peak Exports, i.e., declining US oil consumption, and presenting it as a positive story.
I define Available Net Exports (ANE) as GNE less Chindia’s combined net oil imports. At the 2005 to 2010 rate of increase in Chindia’s net imports as a percentage of of GNE, the Chindia region would consume 100% of GNE in only 19 years.
That is, suppose global oil production were to keep going as it is today, but basic and consistent trends in oil consumption growth in industrializing economies were to continue just for a few years longer. By the end of the 2020s, China and India would be consuming all oil for sale on the global market.
Well sure, maybe that’s true about oil…but what about natural gas?
You’ve no doubt heard: we have a Saudi Arabia of natural gas. A Uranus of natural gas. A Milky Way of natural gas. At least that what all those ads from fossil fuel energy conglomerates told me…
David Brooks was hailing natural gas as the answer not long ago—the cleaner, cheaper, abundant solution to everything. Does he know as much about natural gas as Applebee’s salad bars? I guess we’ll see…
- The obvious environmental impacts of shale gas fracking are horrendous as documented in Gasland.
- Less obvious are the indirect impacts, including the fact that fracking may leak so much natural gas that the process is worse than using coal from a climate perspective.
- Natural gas drilling, like a lot of things these days, is driven in part by a speculative bubble, in which Wall Street favors “booked reserves” (natural gas that can be claimed to be under the ground at some well) rather than whether those booked reserves are profitable, leading to perverse incentives in which companies will drill unproductive wells to book reserves - here’s a bit more from an oil/gas industry veteran and a longer expose from the Times itself.
- In all likelihood this is a source of gas that will last us maybe a decade or so, not 100 years as often claimed.
- It’s unlikely to be a viable alternative in the long term because it doesn’t directly substitute for oil, which is the main energy bottleneck we face. This study goes through many of the infrequently-discussed issues with natural gas.
But who’s the main source for this energy nonsense dressed up as “expert analysis”? Daniel Yergin, who got his biggest leg up when he began his media blitz in—you guessed it—the Wall Street Journal.
You’d think after this comprehensive takedown of Yergin by The Oil Drum in 2008 and others he’d have learned his lesson, but no, his recent media blitz got headlines everywhere, and got him interviews on everything from NPR to the Colbert Report. His newest book is selling great on Amazon as of a few days ago. Yergin’s media blitz started off with a full-page article in the Wall Street Journal claiming that there is no such thing as peak oil. But of course he and the WSJ didn’t actually get the facts straight, and thus missed the big picture.
The bottom line is we’ve reached a point where the mainstream media is so misinformed about energy that they can claim to be reporting “facts” while misinforming the public. The real numbers get lost in the mix and the challenges we face are not in the public dialog despite the fact that they’re imminent and all-encompassing. And the allies of oil companies and the backers of business-as-usual energy policy are happy to inject more nonsense into the discussion, keeping us from really discussing these issues properly.