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Energy journalist discusses the announcement that Saudi Arabia will increase its oil production and if it is really good news. (1:49)
 

Full Interview (10:34)
 

Tavis: Robert Bryce is a long-time energy writer and journalist who serves as managing editor of the newsletter "Energy Tribune." He's also an author whose latest book is called "Gusher of Lies: The Dangerous Delusions of Energy Independence." He joins us tonight from Austin, Texas. Robert Bryce, nice to have you on the program.

Robert Bryce: Thank you for having me.

Tavis: I want to go to the text here in just a moment and get your take on why energy independence is a falsity.

Bryce: Sure.

Tavis: Before I do that, though, this story about Saudi Arabia, suggesting that they're - not suggesting; saying, in fact, that starting next month they're going to increase their production by 200,000 barrels of oil a day. I'm no expert; you are, but if I understand the story correctly that means that they're doing their part to try to bring the price of gasoline ultimately down. You tell me what the story is, and what I should take from it.

Bryce: Well, this is good news, obviously, that any time a major producer like the Saudis announce a production increase, that's good. I think it remains to be seen, though - remember, we're consuming globally now about 86 million barrels a day. So while 200,000 barrels is a significant amount, will it bring crude prices down and then ultimately gasoline prices down? I think that's still an open question.

Tavis: Might there be - how can I put this - might there be a domino effect here in a good way? That is to say that because Saudi Arabia says this, might others be challenged to do likewise, or for whatever reason step up?

Bryce: Well remember, a lot of these OPEC countries, though, have already peaked in their production and other ones, like Venezuela, have already gotten to a point where they've fired many of their technical staff, they're not investing enough in their upstream production, and so many of the OPEC countries are limited.

There is good news in Brazil, I think, which is not a member of OPEC. Brazil is rapidly increasing their production. But I think overall, this is good news, and I think it's been some - maybe overdue for the Saudis to take this move. But remember, the Saudis and the other members of OPEC don't want prices too high. It doesn't serve them to have prices too high, because that destroys demand and makes alternatives and renewables potentially more attractive.

Tavis: All right, so pardon the naïveté, then; why is gasoline so high, then? If they don't want it to be high and they control the production, why is it so high?

Bryce: Well, I think it's - look, there are a number of factors here. One is the falling value of the dollar. That's clearly a big factor. Speculation in the market, a lot of people are talking about how much of an effect that is. I don't think we really know how much the speculators are causing the price to go up.

But I think the ultimate issue here, the key factor, is rising demand and a supply-constrained market. Last month the Energy Information Administration, which is part of the Department of Energy, estimated that last year, demand exceeded supply by 760,000 barrels a day. Earlier - in fact, just last week, BP released their statistical review of world energy and came to the same conclusion, that demand is outstripping supply.

So I think that's the key factor when you look at these soaring prices, is the market's very nervous that we're not going to have enough oil, and so the price is rising, and rising rapidly.

Tavis: If I take your answer, which I do because you're the expert and I am not; I'm just asking questions here, let -

Bryce: Well, my dad said, Tavis, my dad said an expert's anybody from out of town, so be careful.

Tavis: (Laughs) I like your dad's wise statement. Let me ask, though, again, you're the expert in this conversation, since you are out of town.

Bryce: Yeah.

Tavis: If I take your answer, Robert, I don't hear you even give me anything to go on with regard to the price of gas coming down any time soon.

Bryce: Well, look, there is no silver bullet here. There are a lot of factors now in the market. The rise of China, demand increased 16.5 percent in the first quarter for refined products. India, the rapid industrialization of countries around the world - no, I don't think we're going to see any near-term relief, but the U.S. does need to start taking steps toward diversifying its motor fuel supply, and one of them, I think, would be using more natural gas as a motor fuel is one solution that I see.

That'll take a couple of years, but I think that that's something we could do in the fairly near term that could reduce our oil demand somewhat and hopefully bring prices down.

Tavis: In my voting lifetime, Robert, every president that I've seen talks about getting America weaned off of energy dependence. In this campaign, as we talk now, McCain is saying one thing - he was for the gas holiday; Obama opposed to it. He's saying something else.

Bryce: Sure.

Tavis: To your ear, what are you hearing on the campaign trail? How is this issue going to play out between McCain and Obama, between now and November? Does it make a difference at all?

Bryce: Well clearly energy is a big issue in the campaign. Congress has been talking about it; they passed last December the Energy Independence and Security Act of 2007. Look, this idea that - and both the presidential candidates are now saying energy independence. Before the fields were narrowed down, all of the candidates were talking about the same thing.

Look, it's nonsense, Tavis, this idea that the United States, the world's single biggest energy consumer, is going to be independent of the global energy business - a $5 trillion a year business, the world's single biggest sector - is ludicrous on its face.

And I just - look, maybe I know too much about this, but I think it's insulting that we're hearing this kind of political rhetoric when the fact is that we live in an interdependent world. Whether it's iPods or fresh flowers or beer or bottled water, it's an interdependent world and becoming more so, and we need to accept that fact.

Tavis: I've always been one to say consistently that I think part of the problem in politics is that we don't have enough people willing to tell the people the truth. There aren't enough politicians who would tell the people the truth. Now, sometimes telling the truth means - pardon my English - you ain't gonna get elected.

So you've got to put a price on what the truth really is, but I say all that to ask, Robert, if there is no way - and your logic makes sense to me, and I went through the book last night - if we live in an interdependent world in every other aspect, why then do those running for the White House, Democrat and Republican, continue to tell us on the campaign trail that the solution here, the answer here, is to become independent?

Bryce: It polls well. That's the short answer, Tavis, is that - one of the points I make in "Gusher of Lies" is a note that was sent out by James Carville, the Democratic strategist in 2006. And he put out a memo to the Democratic candidates before the congressional elections, the midterm elections, saying that this was an issue, the issue of energy independence gives people hope.

And I think that that's the issue; that this is a concept - this myth of energy independence polls well. People like the sound of it. And I think that there are four factors that really kind of play into that, why this is so appealing to the electorate, and I think it's peak oil, global warming, Iraq, and terrorism. All of these issues, I think, create or contribute to kind of a free-floating anxiety among the American public that contribute to this idea that oh, if only we were free of imported energy, that somehow all these problems will be solved.

And the fact is that they won't, and we're not going to be energy independent, not for decades.

Tavis: All right, so with regard to solving the problem, and if solving is the wrong word, to progressing on this challenging front, the truth of the matter is what, Robert?

Bryce: Well, the truth of the matter is, as I said, we're energy interdependent. The United States was a net oil importer back in 1913, and in fact when you look in the years since 1913, the U.S. has only been a net crude exporter a handful of times. We import electricity from Mexico, we import electricity from Canada. We import coal, we import natural gas.

The fact is that in fact the United States is also a net oil - I'm sorry, is a net - I'm sorry - is an exporter of oil and oil products. Last year, we exported oil and oil products to 73 different countries. So the solutions are one, accept our interdependence. Second, we need to diversify. I think we should be looking at natural gas increasingly as a motor fuel.

Brazil, everyone talks about Brazil and ethanol. Brazil has one-tenth as many motor vehicles as the United States, and yet it has 10 times as many natural gas vehicles. We should be emulating Brazil in that regard. We also - I think we're starting to see our motor vehicle fleet be diversified.

Nissan has announced they're going to build an electric car, Honda's building hybrid electrics. We're seeing this diversification already, and that's a good thing.

Tavis: Is it happening fast enough?

Bryce: Well, I think it's only going to happen at the rate at which it becomes economic. We're only going to move away from fossil fuels, whether it's oil or natural gas or coal, when the alternatives become cheaper, cleaner, more convenient, or all of the above. So we're not - we've been using oil for a century. It's going to take us decades to stop using oil or move to something else.

So is it moving fast enough? Well, for a lot of people who are paying $4 gasoline, no. But I think it's clearly going to take years to move to something else.

Tavis: Before I let you go, you've done some of this in the course of our conversation, but if you were John McCain, if you were Barack Obama, if you were the presumptive nominee of your party running for the White House - we know these guys are going to have any number of debates between now and November - how would you tell the truth on this issue? What would you say to the American people to get them to understand the real deal here?

Bryce: Well one, I think we - you have to say it's an interdependent world. We don't necessarily like some of the petro-states around the world, whether it's Venezuela or Saudi Arabia - you name the one you don't like - Iran. But the fact is it's a small world, and we have to figure out a way to get along with all of these different countries.

Second, we've just got to quick this ethanol scam nonsense. We are wasting all kinds of money producing very small amounts of motor fuel by burning large amounts of food. We're burning food to make motor fuel at a time when there's a growing global shortage of food, and no shortage of motor fuel. This is nonsense; it's insanity.

We need to accept interdependence, we need to stop this ethanol madness, we need to look at natural gas, we need to also look very hard at nuclear. Because if we're going to agree that CO2 is bad, carbon dioxide needs to be limited, we have to embrace nuclear, I think.

Tavis: The good news is that Robert Bryce just told you the truth; the bad news is he ain't running for president. (Laughter) He does have a book -

Bryce: But I am from out of town.

Tavis: Yeah. (Laughter) But he is an expert from out of town, and he has a new book you might want to read. It's called "Gusher of Lies: The Dangerous Delusions of Energy Independence." Robert Bryce, nice to have you on.

Bryce: Thanks a million.