In a famous (and much-maligned) statement last week, Barack Obama announced his bid for mechanic-in-chief, exhorting American drivers to get tune-ups and inflate tires to the proper air pressure in a bid to reduce domestic consumption.  Doing this, he claimed, would conserve more gasoline than could be produced through additional drilling for domestic oil; moreover, drilling in the Outer Continental Shelf (OCS) and the Arctic National Wildlife Refuge would take 5-12 years before oil would make it to the marketplace.  Thus, he said, we should focus on conservation and alternative energy rather than drilling for more oil.

Taken at face value, such an idea seems to be a non-sequitor; obviously, keeping one's car running at its highest efficiency is a good idea at any time, more so with gasoline prices at a near all-time high.  However, pursuing greater efficiency and conservation instead of increasing production seems rather like promoting the use of sunscreen and stopping smoking as opposed to investing in cancer research or production of anti-cancer drugs — prevention and conservation are pieces of the puzzle, not the entire solution.

Likewise, dissing oil production because of a 5-12 year timeline in favor of alternative energy sources seems a bit of a forced choice, since basically every alternative to the gasoline combustion engine seems to be even farther in the future as a widespread, mass-scale option.  Toyota is minting money with its hybrid vehicles, but hybrid cars still use some gasoline, and as the economy continues to grow, oil demand will continue to increase.  "Plug in" electric cars and fuel cell vehicles still are years away from economical mass-production.

So on the basis of the intuitive test, Obama's tire inflation idea doesn't pass muster.  But it is informative to look at it from a more objective, factual basis as well.  Do the numbers add up?  It is also informative to look further into where all that "foreign oil", as T. Boone Pickens like to call it, comes from.  How much oil is there in the OCS and ANWR, and how much do we use?

Currently, the United States produces about 5.1 million barrels/day of crude oil and imports 13.5 million.  Of that 13.5 million bbl/day, approximately 6 million comes from OPEC countries:  1.49 million from Saudi Arabia, 1.36 million from Venezuela, 1.13 million from Nigeria, and 0.48 million from Iraq, plus others.  The other 7.5 million bbl/day come from non-OPEC countries, including 2.46 million bbl/day from Canada and 1.53 million from Mexico.  Yes, our biggest suppliers of "foreign oil" are our NAFTA neighbors, not Middle East oil states.

Looking at consumption, we are using 9.29 million bbl/day of gasoline; thus, approximately 50% of our crude oil imports are used on gasoline.  Obama's campaign has stated that his tuneup and tire inflation "plan" would result in savings of 3-4% on gasoline usage; assuming the maximum 4% reduction, that would result in a net savings of 0.37 million barrels of gasoline per day.  Using the same proportion of barrels of gasoline per barrel of crude, that results in a net savings of 0.74 million barrels per day of crude oil.

Current official estimates of US oil reserves are 21 billion barrels.  Official estimates of oil reserves in ANWR are 5.7 to 16 billion barrels, with an expected volume of 10.3 billion.  For the OCS, the estimates are 66.6 to 115.3 billion barrels, with an expected value 85.9 billion barrels; looking at both together, basically tapping the OCS and ANWR would increase known reserves of US reserves by over 450%. 

On the production side, the expected production from ANWR alone is 1.0 to 1.35 million barrels per day.  Even more modest production from the OCS compared with ANWR (and current operation) would seem to produce at least that much oil at the most conservative and inefficient estimate.  At any rate, tapping into ANWR and OCS would produce enough oil to counter what we get from Saudi Arabia or Venezuela, and possibly both.  This would seem to reduce their oil-price leverage on the world market.

All of this, of course, is based on static analysis; it seems unrealistic to assume that gasoline and crude oil demand is going to remain flat over the next few years, especially as India and China continue to modernize their respective economies.  As demand continues to increase, prices will continue to rise unless new supply is brought to the market.  This makes those known reserves even more valuable, especially as long as the majority of the world's reserves continue to be controlled by nationalized oil companies (those "Big Oil" companies only control about 20% of current known reserves).

At some point, an entrepreneur is going to perfect an alternative engine or fuel that replaces the gasoline-powered internal combustion engine, and in doing so, make a mountain of money (ironically, in doing so, perhaps become a target of the government for some sort of "windfall profits" taxation).  Until that time, we should pursue our known resources.  No sane person is against keeping tires inflated properly or cars well-tuned; however, no serious person can credibly state that these steps are an alternative to tapping those oil reserves.  Government should stop its official policy of purposely maintaining high oil prices.