Energy and political experts say oil crisis could erupt

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Leaders gather in Torrance for a program simulating a global oil shortage and face the daunting task of developing contingency plans.By Muhammed El-Hasan Daily Breeze
Civil unrest in Nigeria helps send oil prices from $60 a barrel to $80, putting the brakes on worldwide economic growth.
A month later, possible al-Qaida-linked attacks on oil facilities in Saudi Arabia and Alaska push the price of oil to an economically devastating $120 a barrel. U.S. gasoline prices have nearly doubled seemingly overnight.
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Americans and the world are waiting to see what the only superpower does. What can America do?
Not much.
A simulated oil supply crisis played out Wednesday at the Torrance Cultural Arts Center. Rep. Jane Harman, D-El Segundo, was joined by former CIA Director James Woolsey, former California Gov. Pete Wilson and other energy and political experts in the event called Oil Shockwave.
"We've got to stop thinking we can solve this problem abroad," said UCLA professor Steven Spiegel. "We've got to solve it at home. We've got to start dealing with it as a true crisis."
The seven participants role-played as members of the president's Cabinet. The 90-minute simulation, which portrays a seven-month period of oil crises, was developed by Securing America's Future Energy and the National Commission on Energy Policy.
The event was meant to highlight the nation's vulnerability to oil supply shocks, especially since much of the world's oil is in areas plagued with instability from war, terrorism or political strife including the Persian Gulf, Nigeria, Venezuela and Russia.
In addition, the world's appetite for oil continues to increase, led by China and India.
Faced with a handful of crises, the United States would possess few realistic options to counter the immediate shock from spiking oil prices, the participants concluded.
"I think I have to tell the president that we don't have any real good short-term options," Woolsey said in his role as national security adviser.
During the simulation and in a press conference afterward, the participants stressed that the United States must immediately begin reducing its dependence on oil, through conservation and further development of technologies that use alternative fuels and hybrid motors.
Otherwise, the United States risks ending up a "paper tiger," said Spiegel, who played the role of director of national intelligence.
Harman, in the role of defense secretary, suggested the nation's military incorporate technologies that reduce the need for oil.
"The military can set an example," Harman said. "I would suggest our president declare right now that we are transitioning our military fleet to alternative energy."
Gas-electric hybrid vehicles came up several times. Some companies are developing ways to increase a hybrid vehicle's gas mileage to more than 100 miles per gallon, Woolsey said.
Only a few miles away, Toyota and Honda, which have their U.S. headquarters in Torrance, lead corporate efforts to sell hybrid vehicles. The companies also are developing hydrogen-powered vehicles, which won't hit the market for another 10 or 20 years at the earliest.
Wilson, playing the role of secretary of state, said more nuclear reactors should be built. This would make all-electric vehicles more feasible by providing low-cost power, Wilson said.
"It's capital intensive," Wilson said. "But once it's done, it's relatively inexpensive."
Harman noted that building reactors and finding places to dump the nuclear waste always faces opposition from nearby residents.
"There's a NIMBY issue," Harman said. "We have to solve that before we recommend nuclear."
Also mentioned were further developing solar and wind power as well as converting prairie grass and feed waste into fuel. Drilling in Alaska's Arctic National Wildlife Refuge was another suggestion.
Harman noted that oil is especially important to the South Bay since her 36th Congressional District accounts for 36 percent of California's oil refining capacity.
During the simulation, the participants contemplated U.S. military action to secure Saudi Arabia's oil fields, government-imposed rationing of gasoline, and tapping the nation's Strategic Petroleum Reserve. All those options posed difficulties.
For example, the latter would offer only temporary relief, and carries the risk of raising oil prices by appearing to confirm people's fears about the world's oil supply, some of the participants said.
Woolsey summarized the situation by saying, "The short-range options range from the most disagreeable to awful."
A longer version of Wednesday's simulation took place in Washington, D.C., in June.
Robert Grady, former deputy assistant to the president, noted that today's oil prices remind us why we must find alternative fuels.
"Oil prices were about $50 when this was done two months ago," Grady said. "Now they're in the $60s. That has happened without crises."