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The Deeper Lesson of the Prudhoe Bay Shutdown

August 7, 2006

Last year, it was Hurricanes Katrina and Rita. This year, it's the BP shutdown of production operations at Prudhoe Bay. As the late Gilda Radner's character Roseanne Rosannadanna used to say, "It's always something."

Like the hurricane-related oil facility shut-ins of 2005, BP's Prudhoe Bay closure will take oil off the market in summertime, when demand peaks. About 8 percent of U.S. oil production and one-half of 1 percent of global production will be halted. In a tight market, that matters a great deal. Prices already have spiked, and analysts see gasoline prices going up 10 to 15 cents per gallon in the next few weeks.

BP's operations may be down for months while the company examines and corrects extensive pipeline corrosion that could have resulted in large oil spills and the consequent environmental damage. Preventing spills is always better than cleaning them up afterward, but perhaps BP should have been more diligent with maintenance in the unforgiving arctic environment to prevent things from getting to this point.

But don't let oil company sloppiness obscure the more important issue, which is this -- We have allowed our economy to become excessively dependent on a commodity with large and growing security of supply vulnerabilities. Oil demand is rising, oil discovery is not keeping up with oil consumption, and producers are having to look harder and spend more in increasingly difficult production environments.

Like a family without a savings account, our oil-addicted energy economy is vulnerable to unexpected emergencies that are bound to come up from time to time. While the timing of such emergencies cannot be predicted, they must be planned for.

We have had more than 30 years to plan for the day when cheap, abundant oil would be harder to come by. That day has arrived, but we haven't prepared adequately for it through aggressive conservation and resource diversification, thanks to complacency, special-interest politics, and lack of will in Washington.

So, here we are, faced with a tight oil market, long oil supply lines, and little margin for error, where any untoward event can cause prices to spike and anxiety to mount. For good reason. The extent of the vulnerabilities that our country faces as a consequence of its oil addiction were made strikingly clear in an extraordinary package of articles published recently by the Chicago Tribune. An enterprising reporter used investigative shoe leather and a talent for telling human stories to trace gasoline supplies from one suburban Chicagoland gas station back to their dodgy sources in the world's worst trouble spots.

The articles took the dangers of oil dependence out of the realm of wonkish policy and dry statistics, and put human faces on the pickle that we've gotten ourselves into.

An important message that the articles contain is that oil's blessings as a portable and potent source of energy are counterbalanced by its curses as a seedbed of social pathologies and political extremism.

Which include, as the Tribune articles pointed out, sectarian violence in Iraq, corruption and insurrection in Nigeria, and radical populism in Venezuela.

Domestic oil production is not afflicted with such ills, but it has vulnerabilities all its own, as the 2005 hurricanes and BP's pipeline corrosion problems make clear.

Which is why more domestic oil production will not solve our oil addiction problem. When Congress returns from its August break next month, you can bet that the business-as-usual crowd will push oil drilling in the Arctic National Wildlife Refuge and off the coasts as the cure for energy insecurity. But sweeping the domestic oil cupboards bare is not the cure for the dangers of oil dependence. One does not break alcohol dependency by visiting another liquor store.

There are plenty of good ideas for fixing this problem. They are as small as keeping tires properly inflated and as large as rethinking automotive design and propulsion systems from the ground up. Many approaches have been suggested by experts, such as Amory Lovins' book, "Winning the Oil Endgame," and the 2004 report published by the National Commission on Energy Policy.

Ordinary citizens need not have that level of expertise to contribute. We can supply the urgency. We can repair to the example of past generations that mustered American will, know-how, and resources to achieve victory in two world wars, win an epic battle of ideas with communism, and plant American flags on the moon.

Only citizens can push the building of a new, cleaner, more secure energy economy to that level of importance. As a BP ad would say, "It's a start."