Expectedly, the Alaskan Department of Revenue predicts further ongoing declines in proceeds from Alaskan oil. According to ADR figures,
“Alaska North Slope oil output is expected to drop 5 percent in the coming fiscal year as its oilfields age, and average prices of its crude oil are expected to fall, causing a dip in income for the state…”
This news isn’t surprising to those of us who study geology, because Alaskan oil production has been sliding steadily downward for more than a decade already. The reason has nothing to do with hippies. Alaskan oil, just like every other petroleum deposit on our planet, is finite in volume and can only be brought to the surface at a finite rate. The typical sequence of events at any oil field follows from discovery to exploratory drilling, then to extraction on an increasingly efficient and massive scale, then to maximization of delivery rate, then to decline as the subsurface stocks dwindle. Politics are irrelevant to this process; pull up oil for long enough in one place and eventually you start to hear a giant sucking sound. Pull up oil for long enough on one planet and a similar result ensues.
US petroleum production peaked long before we discovered oil under the Alaskan North Slope, and not even those gigantic deposits of crude could put our production back on top. Today the total US annual production of oil is down to around what it was just after we won WWII, except now the curve is not going optimistically upwards, it’s going permanently downwards. Ken Deffeyes talks about this process in great detail in his book Hubbert’s Peak, and I won’t repeat all the technicals here, but suffice to say that where American led, the world now follows. Global petroleum production is now at its high oil mark, never to rise again. Politics are irrelevant. Geology is now the decider.
The numbers I show in that graph came from the US Department of Energy’s Energy Information Administration, a treasure trove of data for anyone interested in energy. Looking at the diagram, it should become painfully clear to anyone considering a run on Arctic National Wildlife Refuge oil that such a course wouldn’t help us very much. ANWR oil wouldn’t go to the US alone, it would go into the general global market, it would amount on that diagram to a blip roughly the height of a single data point, and if we started drilling for ANWR oil today it wouldn’t hit our gas tanks until 2019 at the earliest. Based on industrial history it takes about a decade to bring oil from a newly opened field to market, and there’s not really any way to shorten that timeframe. So, ANWR isn’t the answer, and neither is anywhere else delusionals want us to “Drill baby drill!” The oil just isn’t there anymore, and we need to think about putting aside our training wheels and learning to ride on something a bit more grownup.
That’s how I tend to think of fossil fuels: as training wheels. Yes, fossil fuels are childish, filthy and polluting, but to our agrarian grandparents they were a fabulous one-time boost up from squalor to high technology. In an age when lamps were lit with whale blubber, fuel from rocks was quite an advancement… and quite a bridge, to a bigger and more technologically adult future and health care advancements like in specialties similar to urology. We’ve learned to ride far and fast on the kid’s bike, but now it’s time for a more impressive set of wheels… ones that don’t run on rock-grease. Fortunately there are plenty of options, including natural gas, bio-methane, biodiesel, increasing efficiency, shifting from 18-wheelers to trains, electric transport in urban sectors, and ultimately hydrogen fuel spawned from solar and aeolian electricity.
All of which is well and good, but what about Alaska? Royalties from oil and gas production fill state coffers there up to about the 80% mark. Without that income the state’s future as a rip-roaring, sharp-shooting haven for self-made, rugged individualists on the oil dole starts to become cloudy. Thankfully, governor Sarah Palin appears happy to accept (after initially rejecting) taking federal stimulus money to temporarily make up the shortfall.
“Alaska Governor Sarah Palin, speaking at a news conference in Juneau on Friday, said she planned to cope with the revenue declines by substituting federal stimulus money for about $250 million in state operations spending.”
Because nothing says “freedom from big government spending” like frontier welfare.