What The Gulf Spill Means For The Future Of Oil

Guests

Frank Verrastro, senior vice president and director, Energy and National Security Program, Center for Strategic and International Studies
Richard Harris, science correspondent, NPR

Since the spill in the Gulf of Mexico, the government has announced a series of measures aimed at restricting new drilling activity. The short term measures include a six-month extension on a ban on permits for new drilling in deep water. New drilling in other parts of the country remains on hold.

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NEAL CONAN, host:

This is TALK OF THE NATION. Im Neal Conan in Washington.

Today, President Obama visits the Gulf Coast again, his fourth trip to the area since the Deepwater Horizon disaster and a prelude to a nationally broadcast address to the nation tomorrow night.

The president previously imposed a ban on new deepwater drilling. New wells in other areas also remain on hold. We're likely to see new safety measures and new regulations. The president said the gigantic spill emphasizes the need to shift to alternative sources of energy. But it's also clear that can't happen quickly and that drilling will probably resume within a matter of months.

So how does this spill change things for the oil industry? Give us a call, 800-989-8255. Email us, talk@npr.org. You can also join the conversation at our website. Thats at npr.org. Click on TALK OF THE NATION.

Later in the hour, the oil spill is also on The Opinion Page. We'll talk with a reporter about her experiences covering the spill in Louisiana. But first, let me introduce Frank Verrastro, senior vice president and director for the Energy and National Security Program at the Center for Strategic and International Studies here in Washington. He's with us in Studio 3A. Nice to have you with us today.

Mr. FRANK VERRASTRO (Senior Vice President, Director, Energy and National Security Program, Center for Strategic and International Studies): Good to be here.

CONAN: Also with us, NPR science correspondent Richard Harris. He's also in the studio. Richard, always nice to have you back.

RICHARD HARRIS: Nice to be here.

CONAN: And Frank Verrastro, let me begin by asking you: Are the other companies, oil companies, upset with BP?

Mr. VERRASTRO: I think it's split at this point. Until we get all the facts on actually what happened, I think you're starting to see the common front crack a little bit.

Chevron made a statement the other day about the fact that if, under our procedures, if systems and procedures had been followed, we don't think this would have happened. I think Exxon's testimony tomorrow may indicate the same thing.

So there's going to be a lot of concern within the industry?

CONAN: And saying of course if we weren't doing nothing would have happened.

Mr. VERRASTRO: Exactly.

CONAN: Right. In terms of the record, this one horrible incident aside, is BP better or worse?

Mr. VERRASTRO: Is BP better or worse? Drilling totally, if you take drilling in the Gulf of Mexico especially. So about one percent of the spills come from actual platform accidents, the bulk of it comes from tankers and pipelines.

So historically, I think the industry's record, industry-wide, has actually been pretty good.

CONAN: What do you expect to be the fallout from this disaster?

Mr. VERRASTRO: Oh, a little bit too early to tell, but clearly as you said, you know, more regulation, probably redundancies on the rigs, our containment and spill cleanup conditions are still stuck in the 1980s, in part because I think we were over-confident about these blowout preventers. So I expect that some of the oil spill liability fund will go towards that.

And then I think there will be certain restrictions on either Arctic drilling or certainly in the deep water, and there may actually be spillover to onshore, on conventional gas, which is of concern, as well.

CONAN: Which is of concern, as well. When you said redundancies, what do you mean by that?

Mr. VERRASTRO: So the blowout stack, for example, has a number of different rams. It has pipe rams, sheer rams, annular rams to actually stem the flow. There's cementing. There's pressure that you put in the well.

My suspicion is that they'll make sure there will be more inspections, and a regulator maybe almost like the Nuclear Regulatory Commission will be able to come out to a rig, and if things aren't checked, he can suspend drilling. And then companies will realize that there's a huge economic disadvantage to doing that, and they'll be certainly more careful in the way they proceed on both.

CONAN: Is it possible that they would be required to drill a relief well if they're drilling extra ones now, a little bit after the fact at the same time?

Mr. VERRASTRO: Yeah, so a relief well would be a second well. My suspicion is that except maybe in the Arctic. Because in the Arctic, it has such a short drill season that if something were to occur, the thought of having to wait until the next drill season to get back in there could be catastrophic.

Canada had considered this secondary or relief well being part of a requirement, and they decided against that. So I'm hopeful that they'll get this sorted out and figured out.

CONAN: All of this is going to make that oil that comes from deep underwater much more expensive.

Mr. VERRASTRO: More expensive, absolutely, absolutely.

CONAN: And as you look at this, is there an alternative to going after that oil?

Mr. VERRASTRO: Alternative to going after that oil? So sure. There's a number of unconventional resources: oil sands, heavy oil shales, for example.

CONAN: The Athabasca tar sands.

Mr. VERRASTRO: Yeah. But to me, they all bear some kind of a risk. There is no energy form that is without risk, whether it's coal or nuclear or intermittency on renewables. It's a question of how do you minimize that risk and provide safety and prevention and then in the event of an accident of this magnitude, have containment to be able to deal with it quicker than a relief well.

CONAN: And as we look at these the president has said here's an object lesson. This is why we need to switch to renewable forms of energy, clean forms of energy, become the green jobs that we all heard about during the last presidential campaign. How's that going to happen? Is that going to happen?

Mr. VERRASTRO: I think it is going to happen. I think lower carbon fuels and cleaner fuels - the current system is unsustainable if for no other reason is that when you look at where the production is coming from, how much is going to be available and growth rates, especially in the non-OECD, so China, India, other places because of population and standards of living, that we're not going to be able to produce what we've been producing without stepping out and taking risks.

So alternative energy forms are coming, but they're not going to happen anytime soon. So this notion that we're going to accelerate the transition, it's going to be decades. And so in our view, it's always been proceed with research, push on renewables, push on efficiency, but you've got to keep the other system robust because that's what keeps the lights on and the cars going.

CONAN: Richard Harris, decades?

HARRIS: Yeah, I think that's certainly the case. I mean, if you and if you look at some of the alternatives that Frank just mentioned, like oil sands and some of these unconventional sources of oil, that actually takes you in the wrong direction in terms of things we care about, like climate.

They actually end up producing more carbon dioxide per mile traveled or whatever. So you not only have to think about, you know, just where can we grab energy, but you also have to think about whether that energy is going to be moving us in the direction we need to go from the standpoint of climate change.

CONAN: And what about other resources like coal - again, the same problem with carbon?

HARRIS: Yeah, coal is a very high-carbon fuel, and you can take it, you can do things with it to convert it into liquid fuels. You may recall Jimmy Carter's synfuels program, which was kind of designed to do that and never really went anywhere. But that whole idea of taking coal and turning making it liquid fuel, technologically, it could work, but again, you're it's really bad in terms of the environmental impact.

CONAN: This administration has pushed strongly for more nuclear power plants. These take a very long time to authorize and finance and construct and build, and they don't begin to answer the question of how are we going to get our cars down the road.

Mr. VERRASTRO: That's true, although actually one of the convergences, if you look down the road a little ways, is that the is the advent of electric cars. And it turns out actually you can, if you can figure out a nice way to generate electricity without producing so much pollution, you actually can start to turn your automobile fleet into an electric car fleet.

Again, that takes a long, long time, and people talk optimistically about oh, in a couple of decades, we could have a million cars on the road that are electric cars. That sounds nice except we have something like, what, 200 million cars on the road right now. So a million cars, you know...

CONAN: And that's just this country.

Mr. VERRASTRO: Yeah, and that's just here, exactly. So that's certainly one place where people are pushing to get into the electric cars, and there's space for that, but it's not a quick fix.

CONAN: Frank Verrastro?

Mr. VERRASTRO: Yeah, to Richard's point, that's exactly right. We have 250 million cars and light-duty vehicles. Last year, with Cash for Clunkers, we sold 10.2. So it's just math here, folks. If we add all electric cars tomorrow, it would take 25 years if they were half electric, 50 years, a third electric, 80 years, and then what's your electricity source, right? So 50 percent right now is coal. If CCS isn't viable, the next nuclear plant in this country I think is 2017, huge upfront costs, still not without risk, right? Not...

CONAN: Mm-hmm. Yeah. Three Mile Island. Yeah.

Mr. VERRASTRO: Exactly. So it's going to take a while, and even battery technology. Now people are looking at rare earth elements. So as we go to these green technology, who has the elements that we need, the materials we need to do things like...

CONAN: It turns out it's the Taliban.

(Soundbite of laughter)

HARRIS: Well, it's China.

Mr. VERRASTRO: Actually, Afghanistan has a lot of resources, yeah.

HARRIS: But yeah, lots in China, some is in yeah, it's true that all of the sudden, you may be less dependent upon foreign fuel, but you may be more dependent on exotic foreign elements.

CONAN: Lithium, yeah.

Mr. VERRASTRO: And others.

CONAN: Our guests are Frank Verrastro, senior vice president and director of the Energy and National Security Program at the Center for Strategic and International Studies and the familiar voice of Richard Harris, NPR science correspondent, 800-989-8255. Email talk@npr.org.

And we're talking about the future of oil. Let's begin with this is Steven(ph), Steven with us from Creston in Colorado.

STEVEN (Caller): Hi.

CONAN: Hi.

STEVEN: All I want to do is say that like the Second World War, when a crisis, and this is definitely a crisis, and I'm not just talking about the oil spill, when a crisis of this magnitude, meaning the non-sustainable nature of our energy sources, is presented to us, if the people I think that the vast majority of people in the United States are ready to support a green, sustainable energy.

Like, Germany has backed off of nuclear. They have really come on strong for renewable forms of energy. Why can't we do that here?

HARRIS: Yeah, well, it's true that there is public interest in it, as long as it doesn't cost a lot more. I think that's one thing we're facing. I think you'll also find in Germany, even though the politicians talk tough about phasing out their nuclear power plants, as a point in fact, every time the deadline approaches, they say well, maybe not quite just yet.

So I think that some of the phasing out of nuclear power in Europe has been exaggerated, but I but you're exactly right in terms of the philosophy that people have recognized that we need to move towards cleaner and more sustainable forms of energy, and places are taking it seriously.

STEVEN: I live in the San Luis Valley. It is one of the sunnier places in the United States, and the people here are not in favor of industrial solar development. They're more interested in local distributed solar energy.

We most of the civilized world has developed in a way that is not sustainable. You know, I look at the roads. I have to drive 50 miles to the nearest town. That's not sustainable.

CONAN: I just wanted to follow up, Steven, we just have a little time left.

STEVEN: Yeah.

CONAN: Frank Verrastro wanted to come in on the point of the industrial solar distribution and the local distribution that he's talking about.

Mr. VERRASTRO: Well, and distributed energy, Steven's point is a great point. I mean, some of the people that talk about smart grid, it's essentially building out the grid that we have now.

We may find that 30 years down the road, we want local or distributed energy. So building out a system thats basically utility-based from what we had in the past may not be the way to go. But we're just at the beginning of that train.

Neal, you talked about the 1970s. So I actually was in the Carter administration - just a child but in the Carter administration. The idea of decontrolling oil, decontrolling gas, starting the IEA, starting the SPR, passing Clean Air, Clean Water, CAFE...

CONAN: Fifty-five-mile-an-hour speed limit.

Mr. VERRASTRO: Yeah. I mean, there was a lot of things that were done, and the Synfuels Corporation, the main thrust of it was to prepare for the day when, right? And then President Reagan came in, tax cut policy, prices were lower. Congress decided in their infinite wisdom after three years, no reason to continue this. We don't need it. And 30 years later, we're back to where we were. So it's sustainable policy.

STEVEN: The only...

CONAN: Very quickly, Steven.

STEVEN: The strongest point I want to make is that the American people will support an alternative, green energy.

CONAN: Last summer, I remember the American people howling about $4 gasoline. So there are conflicting urges there, Steven. But we're going to continue to follow this up. If you'd like to join the conversation on the future of oil, give us a call, 800-989-8255. Email us, talk@npr.org. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.

(Soundbite of music)

CONAN: This is TALK OF THE NATION. Im Neal Conan in Washington.

The effects of the oil spill continue to spread from shorelines all the way to the stock market, where BP shares continued their slide. We're talking today about the impact the spill will have on the oil industry. With us, energy expert Frank Verrastro, along with NPR science correspondent Richard Harris.

We want to hear from you. How does the spill change things for the oil industry? Give us a call, 800-989-8255. Email us, talk@npr.org. You can also join the conversation on our website. Thats at npr.org. Click on TALK OF THE NATION.

And let's go next to Luis(ph), Luis with us from San Antonio.

LUIS (Caller): Hi, how are you doing?

CONAN: Very well, thanks.

LUIS: Thank you for having me on.

CONAN: Go ahead.

LUIS: I was thinking about something. My question was: Has anyone considered how this oil slick or how this accident is an attack on national security as far as the negligence of such a large corporation who's running such a major operation that deals so specifically with something that could affect the environment and then the economy within the coastal regions?

My family lives along the coast, and the tourist economy and the fishing business is...

CONAN: I think a lot of people, Luis, are thinking about the coastal economy, and I think a lot of people are thinking about negligence, including perhaps the Justice Department. We'll find out about that.

But Frank Verrastro, I don't think by extension, you can get to national security from here.

Mr. VERRASTRO: Just in terms of import reliance, if you were to shut down the Gulf, then you would have to import more oil, at least on a temporary basis or use the strategic reserve. So I think that's something the commission may look at, but I don't think anyone's jumped to the conclusion that right now, this is a negligent activity that violates national security concerns.

LUIS: Going along the lines with becoming energy independent, and that certainly addresses...

CONAN: And that gets to the point that Frank was just talking about in terms of energy independence and reliance. Are we going to be reliant for the how much of our oil do we get from, for example, the Gulf of Mexico as opposed to Middle East nations, where we feel like - some people would describe it - funding both sides on the war on terror?

Mr. VERRASTRO: Yeah, so in terms of the Gulf oil production, it's about 1.35 million barrels a day. So and most of it's in the deep water. So it's 30 percent of our domestic production, about 12 percent of our natural gas.

We're about 52 percent import dependent right now. And a lot of people think a majority of it comes from the Middle East, but in fact, Canada is our number one supplier, and Mexico is number two. So we're Western Hemisphere biased, in part because it's a short-haul market.

CONAN: And the closer it is, the less...

Mr. VERRASTRO: Right, the better the return.

CONAN: The better the return. In the future, as we look down the road, where is our oil going to be coming from? We keep hearing about fields in deep water off Brazil, for example.

Mr. VERRASTRO: Right. So I think two things. Most of the production, non-OPEC production in the last couple years, has come from the water. We're producing maybe 30 percent of global output from water, from offshore.

Increasingly, it's going to come from the deep water, and the people that are in the deep water are the international oil companies, not the national oil companies. So to the extent we take that off the board in terms of access, it seems to me from a national security standpoint that you cede more concentration to the OPEC nations.

If demand starts coming back up, and no alternative, as Richard pointed out, is available in the short term, that you run a situation where you're more important dependent, and that's a security concern.

In terms of energy independence, though, we're 70 percent self-sufficient, which isn't bad. We actually export coal. So it's oil for transportation uses, and I think you can actually get at that with efficiency and alternative fuels.

HARRIS: But one thing they say about energy independence is let's not forget these are global markets for oil and so on. So even if we were able to produce more oil for our own use, the reality is the price is set globally, not by us.

So the idea of independence and sort of buffered from geopolitical upheaval is a naive one. I think Frank would agree.

Mr. VERRASTRO: I think absolutely right.

CONAN: And demand continues to rise as there's more uses for oil in rapidly developing economies in China and India and everywhere else around the world, even as demand goes down a little bit per person in developed countries.

There's a here's a controversial question. Have we reached peak oil production?

Mr. VERRASTRO: We actually may have in the United States reached peak oil demand. So on the production side, I guess I've never felt, in terms of the peak oil, that the resource endowment I think is enormous when you look at conventionals, unconventionals, the ability to convert fuels and synthesize fuels.

It's going to be the access. It's the above-ground issues, to me. So it's policy, security, environment, economics that's going to actually limit the amount of production. But there's enough to go forward well into the next century. I just think that things like the spill are going to force people to re-evaluate policies.

CONAN: Let's see if we can get Casey(ph) on the line, Casey calling from Denver.

CASEY (Caller): Yeah, I had a little bit of history in petroleum drilling, and right now, I work as a petroleum pipeline risk engineer. And my comment was mostly that, you know, this was, as your expert was mentioning, you know, about the Outer Continental Shelf, our unproven oil reserves. That's where it is. It's going to be in the deep water.

But most of our drilling, most of the drilling, this is kind of at the high end, or this is kind of the outer limits where we had this failure. So what's going to I feel what's going to happen, as happened in most situations like this, there's going to be a knee-jerk reaction by politicians, understandably so. It was a bad situation.

But they're going to over-regulate, you know, as opposed to taking measured actions and being sure this doesn't happen again. It's going to lengthen the time of that process, even in what you might call low-risk drilling situations.

So what does that have for an overall cost? You know, in my short experience in petroleum drilling, you know, the permitting process isn't you know, they talk about 30 days. They're doing really good because we never got a permit within 30 days. I mean, it's very time-consuming, and...

CONAN: He's talking about the process that came under great criticism subsequently but whereby requests for permits by law had to be handled by the MMS within 30 days. And consequently, they didn't do much of an environmental impact statement because they couldn't.

CASEY: Correct, and I need to qualify that statement that mine, mine was on land, and so I don't know what the differences are there, but I just, I'd be surprised if they got an easier time than we did.

But I think that overall, they're going to spending more time. Definitely regulations need to be in place. Big business does not do a good job of policing itself. But there is going to be an overreaction, and it's going to slow things down. It's not going to improve the oil prices. It's not going to improve any of that, and I think that that's kind of the nature of the American public is...

CONAN: Casey, you still work in the oil industry. Do you anticipate working in that industry for decades to come?

CASEY: I do, so long you know, we talk about - I think there's a shotgun effect that needs to go on. The answer isn't just electric. It's in biodiesel, it's in several ways that we can reduce it, and, you know, and I joke that I will continue working in there so long as there aren't any, you know, electric passenger jets.

(Soundbite of laughter)

CASEY: So this is going to you know, we have to across the board, there's many different things, and no one thing, like I heard the conversation about a million electric cars on the road, that will be great, but we just can't concentrate on one thing.

CONAN: Casey, thanks very much for the call. And good luck in your career.

CASEY: Thank you.

CONAN: Bye. Is he right? Are we likely to see over-regulation?

Mr. VERRASTRO: Yeah, I think Casey's exactly right. In fact, I think he's probably in the suburbs of Washington, and he's got the politics right on this. Knee-jerk reaction is what we do best, unfortunately, and maybe it takes some time to take a thoughtful approach and yet do something constructive.

CONAN: Let's see if we can get another caller in on the conversation. Let's go to Bill(ph), Bill with us from Sac City in Iowa.

BILL (Caller): Good, well, thank you for taking my call, Neal.

CONAN: Sure.

BILL: A comment I'd like to make is most of the folks in this country, we readily criticize companies and government agencies when they make mistakes, obviously in this case, but when it really comes down to it, we as a society are not serious about making any sacrifices to make energy efficiencies come about.

For example, if we lowered the speed limit, we could save an incredible amount of fuel, yet you'll hear no one clamoring for this. And you don't hear us asking about regulations on home fuel efficiencies or limiting the sizes of our homes.

Lastly, we dont even talk about population control and the energy demands of an increasing population. So my comment is we as a society just aren't serious about developing a balance with our environment. We're good at hand-wringing, but that's about it.

CONAN: Richard?

HARRIS: Yeah, I think that's true. I think that there's lots of energy that could be conserved if you do things as simple as changing a light bulb. It doesn't save a lot, but I mean, it's...

CONAN: It all adds up.

HARRIS: And it symbolizes what people are and aren't willing to do. And it's amazing to me how many houses I go into still and see incandescent light bulbs there. And people just don't think it's worth the small amount of effort to change a light bulb, for example, even.

And then you ask, okay, if you want to start making some much more fundamental changes, things that there are lots of things you can do that actually don't even affect your lifestyle, if you just find ways to make your house more energy efficient. It just takes time.

You know, I like to do things with my weekends that are more fun, maybe, than stapling insulation, and I think a lot of people have that problem. And beyond that, then there's the next step. Do you want to actually make changes to your lifestyle? You know, put your car away and ride a bicycle to work or something like that, and those sorts of things then demand even more attention.

And the caller is exactly right that...

CONAN: But then he's talking about systemic changes, smaller houses and...

HARRIS: Exactly, absolutely, and you don't necessarily need a smaller house if you have a smarter house. But we have big, dumb houses in this country. It seems to be the trend is houses that use a lot of energy, more than they need to.

So it's true that, basically, people want everything. And I think when you're one of 300 million Americans - the tendency is to say, well, whatever I do isn't going to make that much of a difference, but collectively, obviously it does.

CONAN: Bill, thank you very much for the call. Here's an email from Frank(ph) in Vacaville, California. One popular conspiracy theory is that large oil companies purchase patents for alternative energy sources in order to safeguard current profits and secure future profits. Do your guests have any information to support or refute those stories?

Mr. VERRASTRO: I would just point to the fact that - two things. I guess the research amount that companies are starting to spend on alternative energies, they - the oil companies and gas companies, in the future, may become energy companies writ large, right? And then, you're also seeing...

CONAN: I see their TV ads. They are already.

(Soundbite of laughter)

Mr. VERRASTRO: Okay. We have a comic in the audience. But also, when you start to look to what's been newly developed - so electricity generation from solar and wind have grown enormously but from a very small base. But it shows that research dollars are being spent and new businesses are coming online. It just takes time because it - the scale is so large.

CONAN: Richard, do - is there anything that you have on this?

HARRIS: Yeah. Well, I've certainly heard the same, you know, rumors of, you know, the suppressed carburetor, you know, that can give you twice the mileage and so on. I think that there's nothing that has led me to believe those are true. But on the other hand, it's - I think the reality is it does take a long time. It's easy to make what you're making already and hard to make changes. And once - and I think that we sort of see the inertia in the system more than a conspiracy is I think the way I look at it.

CONAN: And as we look at some of these alternatives - we just saw after - I don't think the battle is - yet over over that wind farm that's supposed to go off - be build off the coast of Cape Cod. I'm sure there's still court battles to come. It's been a decade?

HARRIS: Yes, indeed.

CONAN: So do you see that oil spill might make it easier to construct alternative forms of energy like wind farms when - or solar? Indeed, there are complaints about large scale solar projects as well.

HARRIS: Well, again, and that gets back to the issue about these are mostly issues that are not - that people don't like clean energy, but they just don't like clean energy where they can see it. And I don't think the not-in-my-backyard syndrome goes away just because you've had an oil spill in the Gulf. So I'm not sure that this will make an enormous difference in - on sort of a case-by-case basis like that.

CONAN: And we're talking with NPR science correspondent Richard Harris, also with us, Frank Verrastro, senior vice president and director of Energy and National Security Program at the Center for Strategic and International Studies. And you're listening to TALK OF THE NATION which is coming to you from NPR News.

And this email from Ken(ph) in Birmingham. I'm a rural mail carrier. I would like to see the federal government start changing their own vehicles to electric. On my route, I am stopped with my car running three hours a day. An electric car would not be running while stopped. And although it would be a large upfront cost, it will reduce fuel costs in the future. This would also increase production of electric cars, thereby reducing the cost for consumers. And is the federal government, Richard, taking the lead in this?

HARRIS: I think to some extent the federal government is, that there is great deal of interest in, for example, the Defense Department, in trying to come up with more energy-efficient buildings and so on. And so I think that is a strategy that is - the Obama administration has put in place to say, let's, you know, let's set an example as the federal government. We are a huge customer. Let's figure out how to do it. And I think there are efforts to do that.

The idea of an electric mail-carrying vehicle is intriguing. I think the reality is electric vehicles are expensive. They don't necessarily have a great - certainly, all electric vehicles don't have very good range. I'm sure this letter carrier is driving long distances. I think he would end up carrying an awful lot of batteries if he had a vehicle big enough to take him on the range of his trip for the day.

But I think that that philosophy is in there and they're starting to develop that, and look at ways even - military is even trying to find nonpetroleum ways of developing aviation fuel, for example, which Frank mentioned earlier as - or I guess a caller mentioned earlier.

CONAN: (Unintelligible).

HARRIS: They'll be in business as long as there aren't electric airplanes. And this is - these are alternative fuel sources. But, I mean, again, not that we're going to see algae-powered airplanes in the next decade, but the idea is people are looking now.

Mr. VERRASTRO: We're talking very long powerful cords. But I think the federal government who's doing two things. So this idea of taking either college campuses, military bases and making them self-sufficient, just to see on a pilot-basis if it actually works, that you can power up with building efficiency, renewable energy forms and then power your cars because you can plug in at night, and then know where they are, is probably not a bad thing to do.

CONAN: And while there are not requirements that houses be efficient, there are tax breaks if you get new windows and that sort of thing.

HARRIS: And there actually are requirements. Building codes all have, to some degree, requirements for any new building has to live up to the current standard. And a lot of standard is how efficient and - a building is. So the problem is, of course, many houses in this country are not - are already standing. And the codes don't reach back and say, okay, and if you have an old building, you have to go spend...

CONAN: Get retrofitted.

HARRIS: ...thousands of dollars now to retrofit it. But, yes.

CONAN: Let's get John(ph) on the line. John is with us from Bozeman, Montana.

JOHN (Caller): Oh, yes. Thank you for taking my call. I think that really the -one of the earlier callers mentioned that the politicians may do kind of a knee-jerk reaction to overregulating the oil companies. And I completely disagree with that. I think that had the politicians - the regulators properly oversee - overseen the oil industry, we wouldn't have had this spill. And it's well-known that cozy relationship between the regulators and the oil companies themselves. So I don't think we can overregulate. This oil spill is proof of that. So that whole (unintelligible) natured overregulation thing should be off the table as far as discussion.

CONAN: Well, Frank Verrastro, he's certainly got a point in terms of we've all heard about the scandals of the regulators, the MMS, literally in bed with the oil companies.

Mr. VERRASTRO: Well, I - and so I think there's two points. The first is actually the regulation and the second is enforcement, right, to make sure people are complying with what they're supposed to do, which is a separate issue. In some of these areas, whether it's Wall Street or whether it's in the oil industry, I also think the technology has moved very quickly and maybe it's been difficult for some of the regulatory bodies to keep up with cutting-edge technology.

CONAN: Okay. John, thank you very much.

JOHN: Thank you.

CONAN: We just have a few seconds left, but we wanted to ask you, Frank Verrastro, you said decades that we are going to be an oil-dominated economy.

Mr. VERRASTRO: Yeah. So I think that, especially on transportation fuels, because of the capital stock turnover that Richard talked about, how fast we can turn over...

CONAN: Cars and trucks, yeah.

Mr. VERRASTRO: ...yeah - that it's going to be difficult to totally move away from oil. That said, I think there's a number of things that you can do. So if you increase efficiency to 40 miles a gallon from 20 miles a gallon, by definition you cut consumption in half. If you maintain U.S. production and then you build wedges of alternative fuels, whether it's electric or biofuels or new forms of diesel that are cleaner, you reduce your reliance on imported oil and at the same time you drive down prices.

So there's things you can (unintelligible) looking at new vehicle construction, new materials that are lighter weight. It just takes time.

CONAN: Frank Verrastro, thanks very much for you time today. Appreciate it.

Mr. VERRASTRO: Glad to be here.

CONAN: And Richard Harris, I'm sure we'll have you back with updates on the Spill. Richard Harris is NPR science correspondent. He's been covering the oil spill in the Gulf of Mexico. And we're glad to give him 40 minutes away from looking at that video of the gusher down at the bottom of the Gulf of Mexico.

HARRIS: Well, always a pleasure to be here, Neal.

CONAN: Coming up, the Opinion Page and the story about access to covering the BP spill. This is NPR News.

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