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August 22, 2005
The Breaking Point?
Living in a city built on the oil "bidness", one often encounters a love-hate attitude in Houston among residents toward the industry. Oil has made Houston incredibly rich, and has transformed it from a hick-town to a remarkably cosmopolitan and international city in just a few decades; a real boomtown in the good years.
But Houston has also been at the mercy of oil's economic and geopolitical swings. Anyone living here during the 80s bust years, knows just how cruel those swings can be. Houstonians also must suffer the environmental and health effects of living at this oil and petrochemical refining nexus.
For good and for bad, oil is woven deep into the fabric that is Houston. But for how much longer?
Yesterday's New York Times Magazine examines the future of oil production and consumption in a long but riveting piece by Peter Maass. His central question: Are we nearing "peak" oil production and the ensuing exhaustion of world supply? There is, of course, no definitive answer, but rapidly increasing demand that is not being matched by new supply coming online offers some strong hints.
One Houstonian who thinks the good times may be coming to an end is energy industry executive Matt Simmons. Simmons, an advisor to President Bush's 2000 campaign, is also close to Houston Mayor Bill White. (Simmons may have convinced the Mayor, who recently began driving a Toyota Prius hybrid car.)
Saudi Arabia, the world's oil kingpin (they have about a quarter of global reserves) is notoriously secretive about its current and future production capacity. Publicly, the Saudis maintain a very bullish view of their ability to meet rising world demand for oil in the coming decades.
Simmons did some sleuthing of his own, examining academic conference papers presented on Saudi wells. His new book offers his conclusion. The party's winding down, and triple-digit per-barrel oil prices may be soon on the way.
Simmons' position is hardly universally shared, but Maass gathers sobering commentary from a number of sources, including our own U.S. Department of Energy.
In conclusion, Maass notes the utter lack of political will to face the oil issue here at home. Neither major presidential candidate had anything of substance to say on the subject during the 2004 campaign, and the recently passed energy bill offers nothing to address Americans' oil consumption. Meanwhile, a gallon of gas is headed toward $3 and people are beginning to notice.
We suggest it's time for an honest, tough look at America's energy future by public policy-makers. Don't hold your breath.
Posted by houtopia at August 22, 2005 07:30 PM