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Silver lining in oil’s dark cloud

Published: Jun 30 2008, 11:32 PM
Category: Opinion
Topic: Editorial

Gradually, some members of the Democrats’ congressional majority are recognizing reality — the fact that we must make use of the large pools of oil off our shores and under a small slice of the Alaska National Wildlife Refuge. It remains to be seen if enough of them come to understand that we must use petroleum for decades to come while we perfect alternatives.

While we await the outcome of this gradual epiphany, there are two new rays of silver lining appearing in the otherwise dark cloud of oil prices. One will increase supply, while the other will decrease demand.

First, the supply. Iraq, safer now, is negotiating interim technical support agreements with Western oil companies (Britain’s BP, Anglo-Dutch Shell and Exxon of the U.S.). These will concentrate on increasing output at existing wells rather than sinking new ones. Iraq’s daily production is now 2.5 million barrels. They expect this to increase to 3 million barrels per day by next year. A half-million new barrels a day could contribute to a decline in oil prices.

On the demand side, a small company, Metabolix, in Cambridge, Mass., has developed a new class of plastic — Mirel, which is a “bioplastic.” It is not made from petroleum and will easily decompose anywhere, from a backyard compost pile to the ocean. Mirel is the only one of several bioplastics being developed that can dissolve this way. The others must be incinerated or composted under high temperature.

The market is huge. We Americans dispose of 500 million tons annually of petroleum-based plastics. They amount to 10 percent of U.S. oil consumption. The dent in next year’s numbers made by bioplastics will be small, about 1 million tons, but as they catch on, the price will come down and growth could expand. One independent analyst says bioplastics could capture as much as 20 percent of the world market within five years. And, while Mirel is made by putting corn glucose into a vat of genetically modified microbes, Metabolix is working on switchgrass to replace the corn glucose.

Like all solutions to high oil prices, these will not benefit U.S. gasoline consumers overnight. Nothing will, but these developments hold real promise.

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