Op-Ed: We can’t afford to shutter California’s aging oil refineries yet
As I was getting out of a cab in San Francisco, a young man flagged me down and said, “Hey, I heard there are oil refineries in your neighborhood. Tell me, why do you think the oil industry can’t shut them down?”
This comment set the wheels turning in my head. I was sure the answer was very simple.
It’s certainly true that the oil industry cannot shut down our energy economy. The fact is, we have to keep the existing facilities in production.
But we cannot let their current use deplete California’s oil reserves. Our future, both now and in the future, depends upon it.
California’s oil supplies may actually be more plentiful than we think.
The problem is that we do not understand the difference between oil reserves and future production. We think of a reserve as the raw fuel that sits in the ground and cannot be used by us or by the country’s cars. Of course, this is not true. Oil reserves are the estimated amount of fuel that the industry could have produced and left for us at the pumps, but which sits in the ground and cannot be used by us or by the cars.
What we call a reserve in current use is technically called a depletion. When we burn oil, we deplete the supply of oil that we could have produced, used, and left for the cars or the country. This is how we come up with a “gasoline shortage”.
When the gas in our cars is low, and we do not want to stop driving until it is full, the gas stations run out of their stocks and the pumps run out of gas. When the pumps run out, we are officially running out of oil, and a “oil shortage” is declared. But we need to look at an oil shortage in this context. The question is: How much of our reserve of oil does the oil industry think we are running out of.
The oil industry looks at the energy supply we are using and then estimates the future energy supply. They are not looking at the total supply of oil used and the total energy supply. They do not look at the oil production we could have done in the past; they only look at current use.
How do we know that the oil industry cannot shut down our oil supply?