Oil Addiction: Read My Lips...No New Energy Strategy

Byron King discusses President George W. Bush’s 2006 State of the Union Address — first in general terms, and then getting down to what the President said about America’s Oil Addiction.

WHAT DID I THINK of President Bush’s State of the Union address? Of course, as I am sure any of you who have followed my articles could have predicted, I was (ahem) mesmerized. I soaked in every image of the great and historic chamber of the House of Representatives in the U.S. Capitol building. Probably not unlike many of you, dear readers, I hung onto every word that fell from the lips of the Nation’s chief magistrate.

I must start by saying that I was riveted by the broadcast images of this nation’s unique species of “politico norteamericano.” There they were, this assemblage of selfless public servants, resplendent in their ruby red neckties and sky blue scarves, collectively getting their aerobic exercise as they loudly applauded Mr. Bush while hopping up and down like a room full of Jack La Lannes. The 43rd chief executive may or may not be remembered by history as the “education president.” But he sure is headed toward becoming the “workout president.”

Not a senator or representative could engage in a bit of body language, and I was reaching for my copy of the Berlitz Body Language Phrase Book. The television camera would, on occasion, point to famous faces. Was that a smile or a smirk on the mug of Hillary Clinton? Was Ted Kennedy sound asleep, or merely in deep contemplation of some important issue? There was my old Harvard classmate, John Roberts, sitting in the front row and thinking to himself (I will wager), “It’s good to be the chief justice of the United States.” And how can some of those Republican guys smile so hard without breaking their faces? Why do the Democrats frown so much? Bad Botox?

Like the legendary, but now deceased, Pittsburgh bookie Tony Grosso, I took a few notes as I listened to the speech. I was making some hunches, handicapping the chances for new government programs and pondering the odds and fates of old ones. I spent the hour sitting at the edge of my chair. Didn’t you?

Oil Addiction: “Information of the State of the Union”

The State of the Union address, delivered to the nation by a sitting president of the United States, is, as you may know, a mandate of the U.S. Constitution, Article II, Section 3. The wording of the Constitution is precise and elegant in a manner that is, to my way of thinking, almost lost to our current culture. The president…

“shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient.”

Originally, and for all of the 19th century, the “Information of the State of the Union” was summarized annually in a written document that the president would send to Congress. Starting in the early 20th century, about coincident with the advent of a national mass media, the president’s presentation became a yearly address delivered before a joint session of Congress. Under current practice, the presidential address not only reports on the condition of the nation, but also allows the man who holds the Constitution’s “executive power” to outline his legislative agenda and national priorities to Congress.

Few things in this world are more highly scripted than a State of the Union address. By comparison, the Academy Awards are just a bunch of little old ladies at a bingo call down at the fire station.

It takes months of background work to prepare the speech. When it comes to the State of the Union, the entire resources of the U.S. federal government are at the disposal of the Office of the President. What the Man wants, the Man gets. At the same time, there is utterly fierce fighting within the federal bureaucracy to secure a favorable nod, let alone a passing positive mention, of a particular agency or its pet programs. The point papers flow back and forth, eventually being sharpened to such a degree that one could use them like a scalpel to perform brain surgery.

At many federal offices during the run-up to the State of the Union address, you can cut the suspense with a knife. Suppose “Program X” is competing for funding with its arch-rival, “Program Y.” If the president says something good about “Program X,” then the next day there are small armies of federal employees and additional divisions of private industry contractors, “X” men all, laying out PowerPoint presentations to highlight the president’s recognition of the many superior virtues of “X.”

And if the president refers positively to “Program Y” in the State of the Union address, then, as the expression goes, “The Ys have it.” (Sorry, I couldn’t resist.) The next day, the “Y” people will also muster their own small armies of federal employees, and their own divisions of private industry contractors to lay out PowerPoint presentations that highlight the many superior virtues of “Y.”

The result? The “X” Men and “Y” People will each send their respective legislative liaisons up to Capitol Hill to brief the congresspersons. And Congress will probably keep both programs, “X” and “Y,” going for another year. “Funding,” as they say, “is life.” And after all, if Congress terminates a program, there will be layoffs down at the plant in somebody’s congressional district. We can’t have that, can we?

Oil Addiction: “Addicted to Oil”

According to an account in The Washington Post, the State of the Union speech went through more than 30 drafts before Mr. Bush delivered it. At the end of such an elaborate process, it is more than significant that President Bush devoted a few words (very few) to discussing what passes for a long-term energy strategy in this country. The man from Midland, Texas, said “America is addicted to oil.”

“Addicted?” The president did not say “America uses lots of oil” and illustrate the point that this nation with about 5% of the world’s population uses about 26% of the world’s oil production every day. That would have been a good starting point for the education president, although this one comparative statistic should not control the rest of the discussion. The key point in the comparative statistic is that current patterns of U.S oil use are a product of the unique history of the nation’s industrial and social history, and the country’s economy and culture. The president could have discussed in front of Congress and American people how the world is changing, and that with these changes, patterns of energy availability and use are going to change, as well. It is surely a discussion that the nation is going to have sooner or later, under one set of circumstances or another. Why not now?

It would have been hoping for too much to expect the president to mention that it has served the U.S. national interest that, for many decades, the U.S. dollar has been the so-called “reserve currency” of the world. In the past, if the U.S. economy needed dollars with which to purchase oil, the U.S. government always had at its disposal, to use the words of a certain newly installed Federal Reserve chairman, “a technology, called a printing press.” But I digress. Back to the speech.

Nor did the president say “America uses too much oil,” and call people’s attention to the obvious point that many of the nation’s citizens spend hours every day in their vehicles, which translates into weeks and months each year sitting in traffic. That is something that most people can understand. The education president could, for example, have continued along with this theme and used the occasion as a “teachable moment.” He could have explained that the nation uses over 250 barrels of oil per second and compared it with the average U.S. stripper well, which produces an average of about five barrels of oil per day. He could have paid homage to the obvious, that the nation’s daily use of imported oil has controlled a good deal of U.S. foreign and military policy over the decades. The president could have told the American people that the medium- and long-term trends in the nation’s use of oil are completely unsustainable. Some of you may scoff at this notion that Mr. Bush would say something like this. I happen to believe that Mr. Bush is a pretty smart and informed man (albeit horribly ill advised by many of his court jesters), and I think that he knows this is the case.

But after 30 drafts of his speech, Mr. Bush actually used the “A” word. The phrase “addicted to oil” is hardly original, having been a staple of energy commentary for several decades. But this turn of a phrase from the mouth of a sitting president is powerful, and hits with a lot of psychological momentum.

Oil Addiction: Addiction is Bad for You

I believe that most Americans have some idea what addiction means, because most Americans know at least a few people who are “addicted” to things like smoking, drinking, or drugs. I also believe that most Americans have at least an intuitive understanding that addiction is bad for you. That is, doing something that is “addictive” over the long term will degrade your quality of life, if not just plain kill you. My hunch is that most Americans are generally in favor of “addicted” people getting some sort of treatment for their issues and, as the saying goes, “getting well.” And helping people to get well is a fundamental tenet of Christianity, which is part of Mr. Bush’s own personal background and journey.

So for President Bush to characterize the nation as being “addicted to oil” is quite the philosophical opposite of the underlying premise of former President George H.W. Bush’s famous comment that “the American way of life is nonnegotiable.” Either that or Congress should review the mandatory sentencing guidelines for people convicted of most drug-related crimes. (Memo to George W. Bush: This is probably a good idea in any event.)

Oil Addiction: The 75% Solution

In the same sentence as the comment about being “addicted to oil,” the president set a “goal” of replacing “more than 75% of our oil imports from the Middle East by 2025.” Mr. Bush talked about replacing that 75% of the nation’s oil imports with ethanol and other so-called “renewable” energy sources.

Replace 75% of U.S. oil imports from the Middle East by 2025? Viewed in another way, this is not a “goal”; it is a prophesy. There is no way that the United States will be importing as much oil from the Middle East in 2025 as it imports today. And there is no way that the nations of the Middle East will be exporting as much oil in 2025 as they are exporting now.

Whether or not the Bush statement is a “goal,” in 2025, the United States will not be importing much in the way of petroleum from anyplace. The oil just will not be there for one side to export or for the other side to import. Welcome to the future. As I said above, this could have been a “teachable moment” for the nation.

As I have noted in other articles, Kuwait has announced that its principal oil field, the super giant Burgan, has entered the phase of irreversible decline. At current depletion and decline rates, by 2025, Kuwait will be exporting negligible amounts of oil, and at prices that most nations of the world will be unable to afford. (This is another discussion for another time.)

Saudi’s super giant Ghawar oil field is close to being in irreversible decline. The Saudis are only managing to maintain current oil production volumes by virtue of a massive seawater injection program that pumps more than 7 million barrels of saltwater per day into its oil fields. This pumping helps to maintain production pressures in the oil reservoirs, but is also the source of formation damage due to the presence of oxygen and bacteria in the seawater. By 2025, Saudi Arabia will still export oil, but far less oil than now and each tanker will be of such value as to require its own armed escort. (See note above.)

Iran is not quite at its production peak, but within 20 years, even the most optimistic estimates forecast that Iran will cease to be a net oil exporter. This may also have something to do with Iran’s desire to develop a nuclear program for both domestic power production and military uses. Again, here was another “teachable moment” for the nation.

Oil Addiction: Conservation, Efficiency and Strategy

Two simple words that were missing from the State of the Union speech were (a) “conservation,” and (b) “efficiency.” Mr. Bush must know that U.S. oil production peaked in 1970. And the president cannot be unaware that, despite nominal price increases over the years, additional government incentives for drilling, and advances in technology for exploration and drilling, U.S. oil production has continued to decline. The only fundamental thing about oil that has increased in the past 35 years is America’s tendencies to consume the depleting substance and to obtain it from more-and-more unstable regions of the world. How much longer can this continue?

Would it have been so difficult for Mr. Bush to use his speech as an opportunity to raise the topics of conservation and efficiency to the American people? After all, Vice President Cheney once referred to conservation as a “personal virtue.” (Although in the next sentence he made the unfortunate comment that conservation is not something on which a nation can base its energy policy. Oh yeah? Wait and see, Mr. Veep.)

After the energy price spikes caused by Hurricanes Katrina and Rita this past fall, I suspect that the American people are ready to listen to some intelligent discussion of the virtues of conservation. And after watching what has happened to the major U.S. automakers in the past few years, I suspect that the American people are ready to listen to some intelligent discussion of the virtue of efficiency. The American people are ready for some “reachable moments” on this subject.

Another important phrase missing from the State of the Union speech was “energy plan.” What is the president’s plan for the long term? Mr. Bush spent many months of 2005 trumpeting his plan for the future of Social Security. He sponsored a plan to reform Medicare. So what is his plan for U.S. energy security in the coming years? After all, as the saying goes, “Plans are nothing; planning is everything.” This is a famous quote from Gen. Eisenhower that is usually found painted on the wall of every staff college of the U.S. military.

Strategic planning is critical. It is not as if things will exactly follow plan. But it is important that you have at least planned something and thought things through with respect to whatever you hope to accomplish. You have identified your challenge. You have considered your desired end state and determined which pathways might get you there. There are many roads from which to choose, so you have to make choices. What are you going to do? You need to marry up your resources to your action plan. What do you need in order to accomplish your mission and how you are going to get it? And have you considered the alternatives along the way?

Strategic planning requires that you think in terms of “What if this?” and “What if that?” And then you act, starting tomorrow morning, knowing full well that the next day some darn thing will occur to screw you all up. But at least you have a plan for this as well. And whoever has the better plan, the United States or China or Russia or the European Union or the Bolivians or the Venezuelans…they are going to be left standing at the end of the day.

For example, and to put it in terms that some of Mr. Bush’s principal advisers can understand, the U.S. Navy has a 50-year plan. Why? Because the Navy builds big ships, some of which have a useful life of 50 years. What will the world look like in 50 years? Beats me, and I am sure that it beats any admiral in the Pentagon. But I will bet that if you are around in 50 years, you will see U.S. Navy nuclear-powered aircraft carriers floating on the waters of the world. The Navy is inventing its own future, Congress permitting and appropriating.

So what is the U.S. energy strategy for the next 50 years? Are we to place our trust in the so-called “free market” to come up with better forms of ethanol from such noted energy storage media as switch grass? Is the Republican president who wanted to restructure Social Security and Medicare afraid of laying out a comprehensive plan for the nation’s energy strategy? Apparently so. And without a well-thought-out energy strategy, this nation had better have a workable military strategy. On that note, I will end for now.

Until we meet again…
Byron W. King
February 8, 2006