Q&A on Oil

As a graduate student in marine sciences, I occasionally encounter queries on environmental issues from friends and strangers. Here are my answers to three questions related to oil:

Q: What new technologies do we need in order to prevent oil spills?

A: None! You are making an incorrect assumption that the essential cause of oil spills is unreliable technology. The fact is that there are more significant factors that come into play. For example, BP and other oil companies have to undertake huge amount of risk by drilling in deep waters. If you retrace the reasons due to which they do not drill on land (in the Arctic) or shallow continental shelves, you will find that there are laws that prevent them from doing so. A shallow or surface drilling operation, if allowed, will be able to afford better technology that would make it safer. An oil spill at such a site would be local in spread, and much easier to stop. Another factor is the laxity induced by the regulatory structure, which transfers the burden of responsibility from the oil companies to the unaccountable EPA regulators. Also, many oil companies invest significantly in "green" projects that divert their focus from the research in drilling technology.

Q: Do you think the U.S. could survive without offshore drilling, or do you think we absolutely need to drill offshore?

A: I don't know what percentage of population can economically "survive" if they only depend on foreign oil. But your goal should not be mere survival. It should be to make the best of your own life. The question you should ask is: would such a restriction lower my standard of living? The fact that oil corporations desperately want to drill in the US, despite governmental restrictions and onerous regulations, suggests that they believe they can produce and sell oil cheaper than the one being imported. Hence, I am inclined to believe that (at present) domestic drilling is in all likelihood raising the standard of living, at least in the US, by making oil cheaper. Even if that's not the case, a government-imposed moratorium on drilling is necessarily bad because it restricts your choice to act on your own judgement.

Q: What alternative sources could we possibly use instead of oil? Is there a different fuel source that could be used?

A: As of today, no other alternative fuels are economically viable. As Alex Epstein, a Fellow at the Ayn Rand Institute, explains:

Fossil fuels supply 86% of the world's energy--the energy that makes the difference between 40-year life expectancies in undeveloped countries and 80-year life expectancies in industrialized countries. By contrast, a meager 2% of the world's energy is produced by "green" sources such as wind, solar, and biofuels--after over three decades of subsidies around the globe.

Oil is likely to remain indispensable for many decades. It is the most significant resource responsible for industrial growth that "makes catastrophes noncatastrophic.”

For Mr. Epstein's detailed argument, see "Energy at the Speed of Thought: The Original Alternative Energy Market", The Objective Standard [requires subscription]; and "Let's Celebrate Oil's 150th Birthday And The Value It Adds To Our Lives", Investors.com.

The ideas expressed in this post are solely mine, and not of my employer or colleagues at the University of Miami.