Schlesinger: US in better oil, gas position now than in 1973

The US is in a better oil and gas position now than it was 40 years ago when Arab oil producers cut off shipments in response to US support of Israel soon after the Yom Kippur War began, former US Defense and Energy Sec. James Schlesinger said.

But that’s no reason to be complacent, he said during an event at which the US Energy Security Council released a new report, “Fuel Choices for American Prosperity.” While the country has made important strides in reducing crude oil imports, it won’t ever be free of them as long as its transportation fuels are almost entirely petroleum-based, it argues.

Schlesinger agreed, but only to a limited extent. He said the US should move aggressively to supplement oil products in its transportation fleet with natural gas. “We have no idea how much shale oil we have, but there’s lots of shale gas available domestically for us to use in transportation,” he said.

As for ethanol and other nonfossil fuel sources, Schlesinger suggested proponents are engaged in “political incantations” similar to when many US politicians said they were committed to energy independence simply to get a favorable response from their audiences.

“The public gets excited about legislation when the price of oil goes up,” he observed. “When it comes down, it loses interest, and legislators do too. Today, we’re in a different situation where we may exert more influence globally because of our supplies. The Chinese, by contrast, are concerned because they have to rely on Middle East oil and the US Navy to keep supply lanes open.”

Asked to grade US energy policies over the last 40 years, Schlesinger gave them “a high D-plus,” adding, “We at least have moved beyond the point where we were begging Middle East producers to keep supplying the West oil…. Higher oil prices ultimately led to the reduction of Arab oil producers’ control of the market. Today, we’re much closer to energy self-sufficiency.”

‘Off the treadmill’

Robert C. McFarlane, who was President Ronald Reagan’s national security advisor from 1983 to 1985 and cofounded USESC, said continued heavy reliance on petroleum for transportation fuel stifles US economic growth. “We need to adopt policies that move us off the treadmill of the last 40 years where we pay more and more for oil, and reach a point where consumers can pull up to the pump and choose which fuel they want,” he said.

Promoting deployment of vehicles open to fuel competition will require easing regulatory and tax policy barriers, the report’s executive summary said. “Once the share of fuel-competitive cars and trucks in the total vehicle fleet passes a certain threshold—for light duty vehicles, that threshold is 15-20%—and only at that point, will there be a business case for fuel stations to install or retrofit infrastructure to serve competition fuels,” it said.

“At the same time, a proliferation of fuel-competitive vehicles will create a demand opportunity and thus drive the private sector to expand capacity in those fuels that investors expect to be economic over the range of oil prices they anticipate,” the executive summary continued.

It urged Congress to create “a topline fuel competition [corporate average fuel efficiency (CAFE)] credit” for automakers that open at least half the vehicles they manufacturer to competing fuels, and ensure automaker compliance with CAFE counts as compliance with greenhouse gas regulations under the federal Clean Air Act.

The report also recommended further deregulation of the vehicle conversion market while enable safe, but low-cost, conversions; expansion of EPA’s proposed Tier 3 gasoline rulemaking to include all alcohol fuels and the broadest range of feasible blends; taxation of all motor vehicle fuels on their energy content instead of volume; and removal of bureaucratic barriers for states to use transportation fuel strategies to meet their CAA obligations.

Globally, the report called for formation of a US-China-Brazil alcohol fuels initiative which would welcome other countries with robust alcohol fuels programs; expansion of international collaborations on electric vehicles; development of international standards for auto aftermarket fuel retrofits; distribution of educational materials to foreign governments on the benefits of developing nonpetroleum transportation fuel alternatives; expansion of the US-China shale gas initiative; and full engagement in international efforts to reduce methane flaring.

Contact Nick Snow at nicks@pennwell.com.

Related Articles

Senators’ bill aims to curb flaring by expediting permit process

02/09/2015 North Dakota and Wyoming’s US senators introduced legislation that aims to capture methane and reduce flaring by expediting procedures for obtainin...

USW union workers add two BP refineries to strike list

02/09/2015 Union workers at two BP PLC-owned refineries in Indiana and Ohio have joined the United Steelworkers union’s (USW) unfair labor practice (ULP) stri...

Bendine elected as Petrobras’ chief executive officer

02/09/2015

The board of Petroleo Brasileiro SA (Petrobras) has approved the election of Alde Mir Bendine as the company’s chief executive officer.

Central starts gas sales from Palm Valley field

02/09/2015 Central Petroleum Ltd., Brisbane, is to start sale of early natural gas from Palm Valley field to Northern Territory Power & Water Corp. under ...

Association presidents want more access in next 5-year OCS plan

02/09/2015 The presidents of three major US oil and gas trade associations urged the US Bureau of Ocean Energy Management to keep more of the US Outer Contine...

MARKET WATCH: NYMEX oil prices settle above $51/bbl

02/09/2015 Crude oil prices rose on the New York market Feb. 6 to settle above $51/bbl after the Baker Hughes Inc. weekly rig count showed a decline of 87 rig...

Statoil reduces capital budget by $2 billion following 4Q losses

02/06/2015 Statoil ASA has reduced its organic capital expenditure to $18 billion in 2015 from $20 billion in 2014. The move comes on the heels of a fourth qu...

Chinese regulators approve Sinopec’s plan for grassroots refinery

02/06/2015 China’s National Development and Reform Commission (NDRC) has approved Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China Nation...

BOEM schedules public meetings about draft proposed 5-year OCS plan

02/06/2015 The US Bureau of Ocean Energy Management will hold the first of 20 public meetings in Washington on Feb. 9 to receive public comments on potential ...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Cognitive Solutions for Upstream Oil and Gas

When Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected