Some thoughts on energy policy:

This is an excerpt from an e-mail discussion regarding the Bakken reserves:

Bob to dbs:

"Here's another reality-check on the Bakken reserves:

The original article really doesn't pass the common-sense test, or the basic smell test - but a little dose of conspiracy will make anything fly.

All of the major oil companies are now drilling for new reserves offshore in very deep water, using very high-tech, very expensive drilling rigs, because that's where the remaining economically recoverable oil is.  Even Saudi Arabia, where you could once find oil with a shovel, is turning to expensive, high-tech production methods to recover oil from additional reserves.  All of this instead of turning to the vast reservoir sitting there virtually untouched right beneath our feet, locked up by those damned environmentalists.  Hmmm - it seems to me that with a few strategically-placed campaign contributions to the right Congressmen, they could be (and are) drilling wherever they want to (except ANWR, but that's just a matter of time).  Somehow those environmentalists couldn't stop production on Alaska's North Slope - which actually was a vast reserve.  I am old enough to remember when that huge reservoir was essentially untouched, and now during my lifetime it's been essentially fully exploited, all without achieving US energy independence, or anything close to it.

I was once on a Southwest flight sitting across from a Texan who had worked his 25 year career as a drill rig foreman, onshore in the US.  He had worked all over the country.  George W Bush had just announced a plan to achieve US energy independence by increasing drilling in the US and Alaska.  I asked the guy if he thought that could be done.  He answered: "I don't know what George Bush is talking about.  We done sucked this country dry.  I'm going back drilling new wells in between old wells I drilled 20 years ago, and we hardly find enough to make it worth the trouble."

The "Drill Baby Drill" thing seems to be good for political mileage, but it doesn't carry much further than that.  The last century and the enormous human progress that it brought was facilitated by cheap energy.  Human progress this century will be shaped (or restrained) by much more expensive energy no matter how you look at it, because the cheap stuff is gone, and potential new sources (and there are plenty of those) will all cost lots more. The Chevy Volt, for example, will let you drive (for a limited distance) on coal-fired electricity, but it's supposed to start at $41,000, and I don't think they're offering it as an SUV.

So let's enjoy sub $3 gas while it lasts (not all the news during a recession is bad news)."

Alan's comment:  "and how about all of the domestic shale deposits? Research 'Marcellus Shale', its just one of many."

Peter's thoughts:

"My neighbor here in Colorado is a retired oil company geologist.  He worked in the USA for 30 years for the major oil companies and has been familiar with Bakken for decades.
He told me that the problem with Bakken is the cost of recovery.  If/when oil prices get high enough, this known reserve will be extracted at more than the small rates, seen to date. Peter

Here is a multiple choice question on the subject:
Why have the major oil companies not invested at some meaningful level in the Bakken reserves?

A.Oil company personnel  still have not read the circulating e-mails on  the extent of Bakken reserves.
B. They are afraid to drill in the scenic North Dakota plains for fear of ecological damage.
C. They would rather buy their crude oil from foreign countries, many of whom hold the USA in contempt.
D. At the current world market price on crude, drilling for oil in other areas leaves them with a much higher profit margin than Bakken would."

dbs thoughts:

I like my brother's story (Bob) of the guy on Southwest: "We done sucked this country dry."  I tend to agree.  Why don't we accelerate our research into fusion?  It sure looks like that's the squirrel that we ought to be huntin'.   We need to approach this challenge with some different thinking.  We can't continue with oil as the primary fuel source for the planet.  It's a finite resource.  Cracking the code on what makes the sun shine would seem more sensible to me.  Why not toss out a really BIG prize to whoever figures it out.  Maybe even give them a TRILLION dollars as an incentive.  Shit, we poured way more than that into the banking hole, what the hell?

Joe weighs in:

"It's all a matter of supply and demand. As long as gas is $3.00/gallon (or $2.49/gallon if you can slip over to SC for a quick fill-up), very few people are going to change their driving habits, ride the bus, or shell out $41k for a Chevy Volt.
As the available oil reserves decline and we (I say "we" because it's the consumer that drives this whole thing) go to more expensive sources, the price of gas will go up and the miles driven will go down. At what point does this happen? Is it $5/gallon? $10/gallon? $15? Who knows, but at some price point alternative fuels will make sense. Wind farms, solar, fusion, whatever. This planet will never totally run out of oil, because the price of that last barrel will be astronomical.
Not enough attention is being given to biomass, specifically wastewater treatment residuals. I can assure you that the supply is not going to dwindle anytime soon. Did you know that a natural bioproduct of anaerobic sludge digestion is methane gas? Ever see those "eternal flames" at wastewater treatment plants? Same thing for landfill gas. It's a natural byproduct of decomposition, and a seemingly unending supply of feedstock."

Jim (retired utility exec):

"Just need to add my 2 cents.....

Joe is correct, as many years ago, the city of Phoenix had a methane gas furnace at each waste water treatment plant that generated heat for the facility (winter time) AND produced all the electricity it needed for operation.... Being a typical city government, it didn't maintain the equipment and it became unreliable. Thus APS when in, tore out all the generating equipment so they couldn't ever again generate electricity, and has been supplying them power ever since....
Some may call this capitalism at its worst, but I call it graft, or EXTREMELY poor management on the government's part looking out for the consumers.......  Similar to the light rail.............".