Bush's Biggest Failure

The Texas Observer -- Peak Oil Is Passing With No Plan

Democrats are attacking George W. Bush on many fronts: the lousy intelligence that led to the Second Iraq War, his go-it-alone foreign policy, the faltering economy, the paucity of new job creation, his penchant for deficit spending, his questionable record while serving in the Texas Air National Guard, and even his syntax and invention of words like “nucular.” All of those things are being used to bludgeon Bush.

But all of them pale when compared to the most important issue in America today: energy. George W. Bush’s greatest failure as the 43rd president of the United States has been his lack of serious action on energy policy at a time when the world desperately needs leadership from America. Global energy consumption is soaring. Oil and gas production is faltering. Almost every month, new studies come out that corroborate the harm being done to the world’s atmosphere by carbon dioxide, which comes from the burning of fossil fuels. And yet, Bush has done nothing to address America’s long-term energy needs or deal with the greenhouse gas problem.

The unfortunate truth about America in 2004 is that it is in the same position as it was in 1973, when the first OPEC-induced oil shocks paralyzed the country. Despite three decades of rhetoric, six different presidents, and a plethora of promises, America still doesn’t have a viable long-term energy policy. It never has. America has been stuck in the same misguided trance that has paralyzed policy makers since the Organization of the Petroleum Exporting Countries decided to shut off the flow of oil to America in early 1973. Despite all that has happened since then—additional OPEC price hikes, two wars in Iraq, and the Saudi-funded attacks on America on September 11, 2001, to name just a few—America’s policy-makers are still afflicted with acute energy myopia and a firm belief that we can produce ever-increasing amounts of energy to fill our gas tanks. And George W. Bush and his cronies are the blindest of them all.

Cheney’s report can be summed up thusly: America doesn’t need more efficiency or renewable energy because there’s always going to be plenty of oil available. We can produce our way out of our energy predicament. There’s only one problem with that thinking: It’s not true.

On January 9, Royal Dutch/Shell Group, the second largest oil company on earth, announced that it had overbooked its proven reserves by 20 percent and that it would write down its asset base to reflect that fact.

The bad news hasn’t stopped. A short time after announcing that its reserves were far less than it had claimed, Shell announced that its oil and gas production fell by 2 percent in 2003, that it would be flat for all of 2004, and that production would fall again in 2005. The other major oil companies had similar results. In late January, Irving-based ExxonMobil, the world’s biggest oil company, announced that despite record profits of $21.5 billion in 2003, its total oil and gas production fell 1 percent. The company said that it produced less energy even though it spent about $20 billion exploring for new oil and gas deposits. California-based ChevronTexaco told a similar story. It, too, had a huge profit of $7.2 billion, but its total oil and gas output fell 2 percent, even though it spent over $4 billion exploring for new energy deposits.

Indeed, a quick look at ExxonMobil’s annual reports shows that the company’s energy production has been flat or declining for the last six years. In 1998, the company’s production of oil and gas totaled 4.27 million barrels of oil equivalent per day. (The oil equivalent figure combines total oil and gas production into one figure.) In 2003, the oil giant produced 4.20 million barrels of oil equivalent per day.

Oil production in the Persian Gulf has been flat since 1997. According to the Energy Information Administration, a division of the U.S. Department of Energy, the entire region produced about 18 million barrels of oil per day in 2002, about the same amount as five years earlier.

I could provide many more examples of why world oil supplies are tightening, but the simple truth is that Hubbert’s Peak is upon us. The issue is being discussed at virtually every major energy conference and industry gathering. And it’s happening at a time when demand for energy is increasing dramatically. In January, the International Energy Agency estimated that worldwide demand is growing by nearly 2 percent per year. In February, ExxonMobil predicted that worldwide energy demand will have grown by 40 percent by 2020. In short, more and more people on planet Earth are vying for fewer and fewer resources. The surge in demand is coming primarily from two of the fastest growing countries on Earth: China and India.

World oil markets might be able to absorb China’s burgeoning demand if energy demand in the United States slows down or declines. But it isn’t. Instead, it’s rising. Between 1990 and 2000, America’s total energy consumption increased by 16 percent, to the equivalent of nearly 48 million barrels of oil per day. America’s share of world energy consumption is rising, too. From 1990 to 2000, U.S. energy use increased from 25.3 percent to 27.3 percent of total world consumption. In 2000, Americans burned more fuel than all of the countries of Europe combined.

The United States is actually driving backward when it comes to fuel efficiency. Vehicles made in America today are about 7 percent less efficient (on a miles per gallon basis) than they were in 1987.

The Bush’s Administration’s decision to ignore the looming global energy crisis verges on criminal. Bush has certainly earned a place in American history. His misbegotten rush to send American troops into the Second Iraq War will likely be the headline for his entry in the history books. But there should be another entry: one recalling that Texas oil man George W. Bush was the president who, when faced with Hubbert’s Peak and the myriad of dangers that came with it, kept his head firmly up his own tailpipe.