Does the LA Times Prefer Oil From Saudi Arabia and Iraq Over Alaska?

March 31, 2016 in Blog, Featured

With an editorial on Arctic drilling that appeared over the weekend, the Los Angeles Times has officially joined the ranks of the anti-energy “keep it in the ground” campaign, effectively condemning the refiners of its home state – which uses more gasoline than any other state in the country – to a future of importing oil from countries like Saudi Arabia and Iraq instead of Alaska.

In the editorial, the Times editors wrote that because the “risks clearly exceed the rewards,” “the government should close the entire Arctic Ocean to offshore drilling” and “consider freezing” new leases elsewhere off America’s shores.

This was not the first time the Times has editorialized on the issue. In 2011 and 2012, its editors decided that they knew better than the 12 federal agencies, 19 state agencies, and four local Alaskan agencies overseeing Arctic drilling and determined that Shell’s oil response plan was not up to their standards. Last year, and again this year, they regurgitated activist claims – which federal regulators have debunked – that there was a 75 percent chance that Arctic drilling would cause a large oil spill.

For a newspaper invested enough in Arctic drilling to editorialize on it year after year, you would expect the editors to at least be familiar with the importance of Arctic drilling to the state of California. As a state that ranks third in the country in petroleum refining capacity that also faces declining in-state oil production, California depends on importing crude to keep its refineries running – importing crude from Alaska, or from foreign sources. Historically, Alaska has provided the bulk of this crude: about 46% of the crude oil supply to California refineries in 1991, compared to 4% from foreign sources.

Over the past two decades, however, the trends have reversed, with foreign-sourced crude supplied to California refineries increasing dramatically while volumes of Alaska-sourced crude fell (see the chart below): In 2014, 52% was supplied from foreign sources – 36% of which came from Saudi Arabia and 22% from Iraq – and only 11% of the crude originated from Alaska.

TAPs CA infographic

You have to wonder if the Times editors recognize the irony of recommending that California rely on oil from Saudi Arabia and Iraq given America’s energy abundance. You see, by protesting Arctic drilling, the paper is suggesting that the country reverse its trend toward energy independence and instead return to the “ever more hopeless dependency on foreign sources for our energy needs” or the “danger zone of oil imports, posing economic and political perils that can’t be wished away,” which the same paper editorialized about in 1990:

“Sadly, the United States now depends more on imported oil than at any time since 1977, with a rising share of it coming from the volatile Middle East. Fully 46% of the oil Americans consumed last year came from abroad, second only to the 47.7% level reached shortly before the Iranian revolution. That percentage will certainly increase as U.S. oil production continues to fall. Since 1987 domestic oil output has fallen by 1 million barrels a day; last year alone saw a 500,000-barrel decline. At this rate we’ll be right back where we were: in a cycle of an ever more hopeless dependency on foreign sources for our energy needs.”

Technological innovations such as horizontal drilling and hydraulic fracturing have lifted the U.S. from the vicious cycle the Times had warned about 16 years ago, making the country one of the world’s top oil and gas producers that now has the power to influence the world price of oil.

But America’s continued energy dominance – and energy security – is neither guaranteed nor indefinite. U.S. oil production is expected to begin falling in the 2020s and continue declining through 2040 – with net imports rising. With demand for energy around the world projected to keep growing for many decades to come, expectations of declining U.S. oil production coupled with increasing oil imports would be concerning, were it not for the fact that Arctic energy resources offer the key to extending America’s energy security for generations and generations – if development began now. If the Arctic saw a significant ramp-up in development this decade, the longer lead times associated with Arctic drilling would make Arctic oil available in the 2030s and 2040s – precisely when we need it.

Given that Los Angeles is located some four thousand miles away from Alaska, it could be easy to get swept up in the hysterics and antics surrounding Arctic drilling and lose sight of the realities on the ground. Let’s turn, then, to local editorial boards that have spoken out about Arctic drilling.

A Juneau Empire editorial last year stated that Arctic drilling could not be stopped “without harming the people who live in this state and driving away many others who rely on the industry for income”:

“The Arctic, with an estimated 20 percent of the world’s unexplored reserves, is the best hope for stability while the world transitions to clean energy. … Just as the world needs oil, so does Alaska. The 49th state is in a period of transition, just as the world is. Ours is more of an immediate problem, however. We need money. Budget cuts will only go so far — Alaska needs new revenue. …[W]e cannot keep these companies at arm’s length forever. We rely on oil. We are addicted to it. We can’t quit in one hasty moment without harming the people who live in this state and driving away many others who rely on the industry for income.”

The Ketchikan Daily News described the “great economic potential” of Arctic resource development that could “benefit many communities in the North Pacific region”:

“This great economic potential can benefit many communities in the North Pacific region — including Ketchikan, which is working to position itself as a homeport, maintenence [sic] station and manufacturing center for Arctic development.”

In another editorial about Shell’s rescue of a stranded sailor and his cat, the editors wrote,

“Shell isn’t just about Arctic drilling in Alaska. It’s about people doing what it takes to survive and helping others — even a cat — to do the same.”

The Alaska Journal of Commerce editorialized about anti-energy activists accusing operators of not being able to “’master’ Arctic conditions and should therefore be stopped in its tracks”:

“Nobody has ever conquered Alaska’s weather or its seas, and if the bar for operating in Alaska is mastering Mother Nature then every fishing boat, tug, barge and cargo ship should be tied up permanently.”

And while Arctic drilling could be just another prong in the broader campaign against climate change, editorials from papers like the Times epitomize the kind of outsider interventionism that Alaska Natives revile:

“Finally, for those that wish to prevent Arctic development in the name [of] reversing global carbon dioxide levels or addressing global climate change, we note that, with or without Arctic development, planes will still fly, trains will still run, and oil and gas resources will continue to be developed around the world and in the Arctic. Shutting down United States’ Arctic oil and gas development will not alter the world’s course, but will only negatively impact those who depend on development for their continued survival: our communities, our State, and our country.”

Federal regulators agree, with Interior Secretary Sally Jewell condemning the activists’ over-simplification of a “very complex situation”:

“I think it over-simplifies a very complex situation to suggest that one could simply cut off leasing or drilling on public lands and solve the issues of climate change.”

In Short

We’ll let you decide: Would you choose Iraqi oil over Alaskan oil?