The Last Gas(p)

By Eric Winchester Stein

This appeared as a guest column in the Delco Times on November 15, 2008.

The transition will be costly, but the need is clear: we can not continue to depend on foreign oil located in the soil of nations that dislike or despise us. Our biggest problem however is over-coming the resistance posed by the dominant players of the old oil economy.

Certainly the oil companies stand the most to lose. Their near century hegemony will come to the end of a long and very profitable ride. For example, Exxon Mobil had revenues of $404 billion and profits of more than $40 billion in 2007. If you were to distribute its revenues and profits evenly among its 106,000 employees, each employee would earn a salary of over $3.8 million dollars and a $400,000 profit sharing bonus. Of course, revenues and profits are never distributed that way: Exxon Mobil gave chairman and CEO Rex Tillerson an 18% raise to $21.7 million in 2007. That's an awful lot of money to siphon out of the economy to one company or individual regardless of how hard they work.

Given the potential to lose so much money to the emerging players in the new economy, big oil has not been idle. In addition to acquiring technologies to generate energy through alternative means (and failing to commercialize them), it has worked overtime this past year to convince the public and policy makers that oil is still the center-piece of the economy. Consequently, it has engaged in a massive public relations effort to maintain its dominance by stressing the value of oil and drilling, spending hundreds of millions of dollars on commercials.

George Bush helped big-oil's cause in summer 2008 by pressuring Congress to approve more land for off-shore drilling. Coincidence? Hardy. Bush knew full well that calling for more off-shore drilling would put oil front and center despite the fact that (a) such efforts would not yield substantial new oil for 7-10 years and (b) that oil companies already had millions of acres on the outer shelf that were untapped. So why did he do it?

Bush helped to position oil as part of the "solution" to our energy woes and dependence on foreign supplies. Was he offering a realistic alternative for the nation? No. If you recall, in the spring of 2008, there was substantial momentum in favor of developing alternative domestic energy sources. One way to derail that momentum was to position off-shore drilling as the solution.

Did it work? Well, to a degree. A large portion of the American public, hungry for any solution, supported it. The Republican Party quickly made off-shore drilling a center-piece of its campaign, epitomized by the alarming chants of, "Drill baby drill!" Even the Democratic Party reluctantly acknowledged the role of continued domestic oil drilling, while cautioning us like good parents that such oil would probably not become available for several years.

The problem with all of this is that good PR, wishful thinking, and the interests of big oil can not be part of our national policy. It is like asking Wall Street to regulate itself. We need to start investing in our energy future -- now.

The United States must transition to a new economy, with new jobs, based on clean domestic renewable energy sources. We can not gear our energy strategy on the out-dated idea that the critical milestone is the date the oil runs out. Long before that, it will become too expensive for the average citizen to purchase and its uneven distribution throughout the world already threatens national security. Prices at the pump will rise and the time to act is now. This is big oil's last gasp and it knows it, but it won't go without a fight. The last gas is not far away.