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The Deep Truth About Oil and the Gulf of Mexico

January 20, 2010 by  

In the time it takes you to read this story Americans will have gulped down 200,000 barrels of oil. From that total 120,000 barrels will have been imported, much of it from the Persian Gulf; a region that harbors a growing hatred of the United States.

This helps explain why Big Oil is making its last stand hundreds of miles out in some very deep waters.

Consider Chevron Corp., the world’s fifth largest publicly traded oil company. It is operating an oil platform in 4,300 feet of water far out in the Gulf of Mexico. It’s called the Clear Leader, and aboard it sunburned roughnecks are drilling through nearly five miles of ocean bedrock.

Some 200 miles due south of New Orleans Chevron has spent 10 years and a whopping $2.7 billion for this project. This is the cost of running a drill and casing more than 30,000 feet through earth and ocean, the same distance that an airliner flies above the earth.

Deep Gulf Oil Rig Map

Chevron will spend billions more and in the end, even with all the high-tech in the world, there are no guarantees that its deep-water experiment will hit pay-dirt. In fact there is less than a 50/50 chance that Chevron’s latest deep-sea adventure will yield anything. Still Chevron and their brethren don’t have a choice.

The Wall Street Journal sums up the situation: “Big easily tapped oil fields close to shore have become off-limits. Western oil companies have been kicked out of much of the Middle East in recent decades, had assets seized in Venezuela and seen much of the U.S. roped off because of environmental regulations. Their access in Iran is limited by sanctions, in Russia by curbs on foreign investment, in Iraq by violence.”

Remembering the Days of Wine and Rigs
I have never met a group that exudes more bravado than wildcatters explaining their latest project. But over the past decade that kind of confidence in exploration has evaporated. In fact the mood in meccas like Calgary and Dallas has turned downright dour. The industry understands that the conventional oil opportunities are drying up.

To understand what is happening with oil think of a bell curve. On the upside of the curve, as production is increasing, exploration and production costs are pretty cheap. But after you have hit the top of the curve and are heading down, it gets harder to find oil, and oil that is found costs more to drill and cap.

To understand the importance of being on the downside of the curve, consider that it took 4.5 billion years for the earth to give us 2 trillion barrels of oil. Since 1886, when the first well was capped, we have used up half of all our inheritance. We have long since past peak discovery rates and in 2008 we hit peak oil production.

The Micro and Macro Economics of Oil
For a specific oil field the key event is not when it runs dry, but the period after production peaks. It is at that time that the field yields less and each barrel pumped costs more.

It is the same dynamic that is working at a global scale. What jars prices higher is not when the oil runs dry, but after oil production has peaked, especially as demand and population are rising.

Consider that world per capita oil production topped out in 1979 and has been in decline ever since. The peak in volume of total world oil production is upon us even as the demand for oil is increasing rapidly.

Globally, petroleum discovery rates peaked during Ed Sullivan’s heyday. In fact, from 1960 to 1980, 600 billion barrels of oil were found. Since 1990 fewer than 250 billion barrels have been discovered.

Despite all our technology and knowledge, the industry is finding oil at less than half the rate of 50 years ago. And the oil people I’ve spoken to believe that less than 100 billion barrels will be discovered this decade.

To understand just how bad this imbalance is, consider that for every new barrel of oil we find the world will consume eight barrels. When my father was publishing OilWeek Magazine 50 years ago that ratio was just the opposite.

Just as individual wells within a field peak at different times, so do different regions of the world. The dilemma that the Obama administration faces, and the real reason the U.S. is embedded in the Middle East, is that U.S. oil production peaked three decades ago and has been in decline ever since. We are pumping less than 5 million barrels per day, or half as much oil as the nation produced when Jimmy Carter gave his fireside chats (see U.S. Oil Production Chart).

U.S. Oil Production Chart

The Persian Gulf has become the epicenter for petroleum as the once rich oil veins in Mexico and the North Sea bleed dry.

The only land with substantial conventional oil reserves is in the Middle East. Iran, Iraq, Saudi Arabia and Kuwait hold nearly two-thirds of the world’s oil and nearly all of the world’s remaining cheap oil.

What do I mean by cheap oil? Compare Ghawar—a single mega-elephant field in Saudi Arabia—to the deep waters in the Gulf of Mexico. Both have billions of barrels of oil. But it costs $2 per barrel to pump oil out of Ghawar while it costs more than $15 per barrel to deliver oil from the Gulf.

"A lot of people can get the very easy oil," says George Kirkland, Chevron’s vice chairman. "There’s just not a lot of it left."

As the once-rich fields in the Americas and North Sea are depleted, the U.S. becomes more and more dependent on Middle East oil.

While the amount of oil available may be shrinking, the world’s need for it clearly isn’t. China’s and India’s demand for petroleum continues to rise even in the face of a global recession.

Outlook for Oil
As I mentioned in my Forecast for 2010, energy prices may pause at these levels. Oil has already recovered above $80 per barrel. That’s more than twice as high as it traded 13 months ago. The truth is oil would be back above $100 per barrel except for lingering fears of deflation.

However it is beginning to look like the Bernanke bailouts will offset a depression. But I have to tell you, I wake up anxious each weekday morning and the first thing I do is check the business channel. I can’t seem to shake the feeling that another shoe may drop. Still, I am cautiously optimistic about oil prices and oil stocks.

A Bet worth Taking
The Gulf of Mexico won’t change America’s energy woes. It will however enrich investors who buy into the right plays. I think the best opportunity of the group is Anadarko Petroleum Corp. (NYSE, APC, $66.31).

Anadarko is one of the largest independent oil and natural gas exploration and production companies in the world. It has 2.28 billion barrels of oil equivalent in proven reserves.
Anadarko Petroleum Corp. Stock Chart

Anadarko is also the largest independent deepwater producer in the Gulf of Mexico. It has discovered 30 fields in the Gulf and has infrastructure which includes 11 hubs and more than 50 sub-sea wells. This year the company will explore its extensive acreage that has been accumulated in some of the richest regions in the Gulf.

To learn more about Anadarko’s projects in the Gulf of Mexico, you can go to the company’s fact sheet here.

I like the leverage we get with Anadarko that frankly isn’t available with the large multinationals like Chevron. Anadarko has the properties, technology and expertise to strike it rich in the Gulf and it doesn’t carry all the excess baggage that burdens the multinationals.

Action to take: Call your stock broker and buy Anadarko Petroleum (NYSE, APC) at market.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

John Myers

is editor of Myers’ Energy and Gold Report. The son of C.V. Myers, the original publisher of Oilweek Magazine, John has worked with two of the world’s largest investment publishers, Phillips and Agora. He was the original editor for Outstanding Investments and has more than 20 years experience as an investment writer. John is a graduate of the University of Calgary. He has worked for Prudential Securities in Spokane, Wash., as a registered investment advisor. His office location in Calgary, Alberta, is just minutes away from the headquarters of some of the biggest players in today’s energy markets. This gives him personal access to everyone from oil CEOs to roughnecks, where he learns secrets from oil insiders he passes on to his subscribers. Plus, during his years in Spokane he cultivated a network of relationships with mining insiders in Idaho, Oregon and Washington.

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  • James

    It is a geological fact that oil exists everywhere, not just under oil pools on the surface. We have oil reserves within the continental United States, there is no imperative reason why we should not drill here. I would suggest we start in Alaska.

    • http://Don'thaveone Sally

      Queen Pelosi said NO. No more oil leases. Since when in a free country do we have to have a Government in cntrol on the minerals found under the earth. Seems to me, if it is my land then I can drill on my land. I know we have at least 45 years of cheap sweat oil in Montana, N. Dakota and extending into Canada. I have forgotten the name applied to these oil fields I believe it is Baakan named after the farmer where it was first discovered. Queen Pelosi can use the oil, but won’t let us find more. God gave us these resourses to be free!!!

      • Curtis S

        Actually “god” gave those resources to the Native Americans.

        • DaveH

          Typical. This from a guy who has no problems with sharing other peoples’ money against their will.
          And who did the Natives take it from?

        • David L. Barger

          Actually, having been born in Purcell, OK, I’m a `native American!’ So
          your ancestors came here from Asia…mine from Ireland and Germany.
          The big difference, as I see it, is when your (formerly) inefficient lifestyles were replaced with more efficient ones, you were either placed on reservations or absorbed into the mainstream, not annihilated like the other `native Americans’ your people displaced.

        • Always right

          Curtis
          There are no “native Americans”. There are only earlier immigrants. They also happened to lack the technology to do anything with this. It took the white man to make oil into something useful. Your claim is frivilous, like claiming the air overhead as yours.

        • Brad

          The natives didn’t even know there was oil beneath them. They would not have known how to use it even if they did. It took the industrial revolution to bring it to the surface & put it to use. I believe the native use it today to power their pick up trucks in lieu of riding around on animals. Am I wrong?

      • Jim

        Queen Pelosi won’t be around forever…she’s getting more unpopular and more hated day by day..Hopefully those idiots in congress will see the light and replace her with someone who has a brain!

  • Sandy

    We visit the Gulf Coast several times a year and really enjoy looking at the off shore rigs. It is a shame that we have to depend on foreign oil when we have plenty of it here in the USA,

    • Brad

      While I agree with this, I wonder in the end when we are sitting on all the oil who will have the say? At least we have an emergency reserve after having used all of their “cheap” oil.

  • Michael Williams

    John,

    You state that only 100 billion barrels will be found in the next decade.

    You are miss informed. There is a literal “ocean of oil” located in northern U.S. and Canada, known as the Williston Basin.

    Revised USGS figures for the Williston Basin increase previous estimates 25-fold to an enormous 503 billion barrels of oil – worth an incredible $37.7 trillion at today’s oil prices.

    Get your info correct before miss leading investors.

    Regards,
    Michael Williams

    • DaveH

      Michael,
      Wouldn’t that oil be classified as “already found”?

      • Tinwarble

        DaveH,

        Actually “found” means that the oil has already been tapped, what Mr. Myers seems to be implying is that he is referring to “Undiscovered Technically Recoverable Oil”, in which his estimates are wrong.
        See Here:

        http://www.mms.gov/revaldiv/Maps/National.pdf

      • Tinwarble
      • Tinwarble

        Also, if you can get through the technical aspects of this report, See Here:

        http://energytomorrow.org/ViewResource.ashx?id=5270

      • Tinwarble

        Also, Mr. Myers does not talk about the vast amounts of Natural Gas reserves that we have here, nor the implications that the use of Natural Gas would have. For those that don’t know, Natural Gas is something that could not only be used in your house for stoves and water heaters, but gasoline engined cars can be fairly easily switched to Natural Gas with a few modifications. With our Natural Gas & the Oil Reserves that we have, we could become energy independent in just a few years, if we could just get the “Tree Huggers” out of the way and let us get to our own natural resources.

        • DaveH

          I don’t doubt that Tin. Keep in mind though that ‘estimates’ are just that. Best guesses by human beings. But if we had free markets, it wouldn’t matter. As the oil was nearing depletion, prices would go up, and as they did alternate energy sources would become economical and companies and people would adjust accordingly. This would be accomplished without all the gnashing of teeth that goes on with Government meddling in the marketplace. And those busybodies (Government regulators) could be doing productive things instead of harrassing those that do.

          • Tinwarble

            Dave, that’s true, if the Free Market would prevail we could solve a lot of our energy issues. But it isn’t just the so called “Government Regulators” it’s also all the “Tree Hugging Hippies”. You can’t put up any Nuclear plants, you can’t put up Wind Mills because you might hurt a bird or someones view might be impaired and you can’t put up Solar Panels because you might ruin the deserts. You can’t drill for oil because you might harm the Caribou herds (that apparently like to use Oil Rigs to mate) and you can’t drill for Natural Gas because you are probably hurting the earths feelings. These are the same people who say that “we go to war for oil”, yet they stand in the way of our energy independence.

          • George

            Tinwarble, DaveH,

            Once again, you’re both right on the money. Thanks for the references and comments.

            This country is flush with recoverable natural resources. The biggest impairment to free markets are the environmentalists. If we dropped the unnecessary restrictions to exploration and production, I believe we might be surprised as to how much oil and natural gas was actually found. In any case, we do should open sites to exploration and production and let the markets determine what the resource is worth. When the price and cost rise too high for oil and gas developed in this country, the market will find the next most economical resources to take their place.

            Energy independence isn’t the only reason to opening the market to more exploration and production. Every barrel of oil recovered in this country reduces our trade deficit by the price of a barrel less the cost of recovery ($75-$15=$60). Multiply that number times millions of potential barrels per day, and the figure is sizeable. The US trade deficit is actually driven by the amount we spend for foreign oil, so anything we do to reduce this number is bound to help the economy. Any reduction in our trade deficit strengthens our US dollar, thereby improving our standard of living, and making debt repayments less expensive. And, this doesn’t include the additional jobs and tax revenue that would come from growth in this industry.

        • http://Don'thaveone Sally

          Yep you are correct. We had a Chevy truck that we ran off of Propane gas and when we sold the truck we kept the tank and the carberator just for these circumstancs.

    • BOOTumALL

      Bravo Michael. Where did you get your information? I would like to read it and educate some people.

  • http://victorbarney@embarqmail.com Victor L Barney

    WE NEED AN “ALTERNATE FORM” OF ENERGY YESTERDAY!!! WE NEED TO “DUMP” THESE “OIL” TYCOONS THAT ARE PUTTING AMERICA’S FUTURE AT STAKE!!!

    • DaveH

      When I drive around, Victor, I am amazed by all the cars on the road and awed by the fact that the oil companies have supplied all that fuel for so many years. Without them, we would still be stuck with horse and buggy.
      As John Myers explained, it takes enormous amounts of money and risk to find the oil, and to extract it. And then they have to refine it and transport it to get it to the gas pumps where we purchase it. After all that, it doesn’t cost us much more to purchase than the carbonated sugar-water which so many are addicted to.
      Somehow Liberals have always managed to blame high product prices on the Oil Companies who are really just victims of the Federal Reserve’s loose monetary policy.
      How is it that so many of us have come to the point of biting the hand that feeds us?

    • Jim

      Victor, Once we get a VIABLE and workable alternative then we can wean off oil.. do you know of a system NOW that will power ALL CARS? and ALL HOMES??? Get real, DUDE!

    • George

      Victor,

      Oil companies simply provide a product that we need and want to fuel our lives. They aren’t the bad guys.

      We’re all for alternative energy sources “IF and WHEN” these alternatives can be produced and sold competitively WITHOUT GOVERNMENT SUBSIDIES. When the market decides the price of oil and gas is too high, then the market will lead us to the next best alternative fuels. The government should keep the hell out of this business. They could start by allowing more drilling and exploration of government lands, and reducing taxes and subsidies in this industry. We need to let the markets work to solve this critical problem…………

      • Brad

        Amen. Let’s concentrate on voting this November for candidates with a small government philosophy.

  • Robert

    Foreign Oil dependency is exactly what each and every politician in Washington wants. Bankrupt the US and all Americans so they can retain power. Now if these politicians really want to solve America’s dependency on foreign oil, then stop the ridiculous pork spending, stimulus giveaway bribes and put our money into: More Nuclear power plants, extensive building of energy efficient mass transit throught out the country to reduce cars driven each working day by 30%. That would be a sensible start and by the way, might even create real jobs. Nah, bad idea. Then how would the special interests, lobbists, green earthers, liberals, and the rest of the corrupt ilk in this country be paid off? Are we talking about a real solution being tried for the good of God forbid, hard working, taxpaying, law-abiding, freedom loving, patriotic americans? Hell no. It’s business as usual in Washington and who the hell do we think we are to speak up without their permission?

    • DaveH

      I agree Robert. It seems so simple to me that the more “Chiefs” we have, the less productivity we can expect from the remaining “Indians”. And the less there is produced, the more the prices must go up.
      One burning question I have always had is why, since economics are so important to our lives, do the public schools not have required economics classes? I can’t think of a more important subject matter for each of us to know. I know very few adults who have even a modest grasp of money matters. It’s no wonder there are so many voters who think money grows on that Government Tree.

      • Robert

        Unfortunately our Government is more interested in teaching our young children about Mike and Sam living together, government’s right to dictate how we live and of course the evils of prayer in the classroom. Economics? I looked at my 6th grade grammar school grandchilds books on english and math. It’s a joke. I learned that stuff in 3rd grade. As far as history is concerned, it’s in the same boat as geography and science. Very little emphasis unless there is a political agenda to drum into the kids. But then, I went through 12 years of parochial school and look how I turned out. A respectful, God-feafing, law-abiding, tax-paying, patriotic American schmuck. We can’t have our children be these things except the schmuck part.

        • Tinwarble

          Robert,

          That’s unfortunately true. Our education system is a joke, I am always surprised (I don’t know why) how little people even know about history or what history they do know seems to be a revisionist version. Even those that are 10 or 15 yrs younger than I am don’t seem to know the first thing about history. It really shouldn’t surprise me though because one of my neighbors is a teacher, but doesn’t seem to know much about anything. We were outside one night looking up at the stars and I had said something about “Orion’s Belt” and she said “What’s that”, how in the world can you be a teacher and not know what Orion’s Belt is. It’s not like you have to be a astronomer to know what it is, I learned what it was when I was like 10 or 11. And if was just that I could understand, but she apparently lacks the knowledge that I had learned about before I got to high school and we wonder why kids don’t know anything today.

    • George S. Saliga

      Amen, we spend billions of oil dollars with people who don’t like us. If we tell the enviromental wacko’s where to get off we might just start the drilling in Williston basin where their is a oil supply that has been said to be the biggest find since Pudlow Bay 503 billion barrels and maybe much more! We can keep that money in our country and stop funding terrorisom and spend money for real green technology and maybe pay off our national debt!

  • Raggs

    I’m going to think outside of the box for a minute.
    I’m sure oil is like gold, it can be found all over the globe.

    But mining it like gold has to have an impact on the stability of the the earths crust would you think? I have always wondered how you can remove billions of barrels of oil from underneath the crust and not have an impact on its structure… A void would have to be created not to mention the pumping of salt water into a cravas to float the oil… Prehaps this is the reason the bible tells us that there will be horrible earthquakes where they have never been before.
    Just a thougth….

    • DaveH

      A barrel holds about 6.5 cubic feet of oil. There are about 5280X5280X5280 cubic feet in a cubic mile. That equates to about 23 Billion barrels in a cubic mile. So 100 Billion barrels of oil removed would result in a little over 4 cubic miles of cavities.

    • George

      Raggs,

      Liquids find “free” spaces in and around rocks so they don’t necessarily compete with rocks for capacity in the earth’s structure. Think of it like this. If you fill a bucket that’s got a drain hole with rocks, and move the rocks around until they are solid and stable, you can still pore a pretty good amount of water in the bucket before it overflows. Likewise, you can drain the water from the bucket without moving the rocks. So the water doesn’t require a bigger bucket, nor does the water, or removal of it from the bucket, impair the strength of the rocks’ ability to hold their own weight. I think that’s a simple explanation of how the earth’s structure works in cases like this.

  • DiverDan

    I believe that it was President Jimmy Carter that set up the Department Of Energy to reduce our dependancy on Foreign oil, So Far we are MORE dependant, and we spend billions to keep this group in tact to provide jobs for Government employees,( about 60,000 people) and we are actually worse off now. We need to over-ride the environmentalists that will not let us drill in Alaska because we might hurt a Caribu or other animal, and we also need to drill off Florida, We have the oil, but congress will NOT let us drill. I understand that St Croix has the largest refinery in the west, which is run and I understand owned by Chavez. We have not built or improved any refinery capacities in the USA in many years, so we are STILL DEPENDENT on foreign oil…..so in a nutshell… it is Washington that is the problem
    There are so many reports that Saudi oil is not as much as quoted, and USA Alaska is such a large supply, what to believe..?? We need to drill, and get rid of Dept of Energy.

    • DaveH

      Dan,
      Washington DC is almost always the problem.

    • George

      Agreed. This is just another example of wasteful government spending. This and the DEA would be two good places to start cutting government spending to balance the budget.

  • CLARK HOTARD

    I am in my 7th decade on this earth, which means I have lived thru some great and some bad times……The problem is simple. Politicians
    are allowed to make a career out of being in Washington…. Look at their balance sheets……When they retire they get to keep all that is in their war chests. They get full pension the day they are seated, and their wives get the same money when they die….
    When we get enough of that crap, we need to put term limits on them, and get rid of the special interests, Lobbists, today…..They are sent to represent us, but are allowed to represent the people who pay the most…..Something is wrong with this too.
    Get off your duffs America and take your country back before you have
    to learn Arabic.

    • Doug

      Clark, I am sure you have read all of the comments above. Yes we need changes in Washington.Politicians need a limit of 4 years. yes we need to clean up by voting old out and new inn. We need all the power we can get from every source oil, sun, nuke, wind. and yes we need a new fuel. MIT has a working fussion unit that is the size of a 90 quart igloo ice chest that produces 500 horse power. This might be our new power for our future. This will take 30 years to replace the old forms of power so we have to use what we got oil, coal, wind, sun etc. are here to stay if you want to live.

    • George

      Clark,

      You are so right, my friend.

  • Carmel Vella

    Why,oh why are we still importing oil from people who hate us and use our dollars against us? I may be naive, but if we pulled our own oil needs from our own country, that would eventually leave our enemies poor. That for me is good enough reason. Let’s drill..TODAY..

  • http://Yahoo Donald

    I agree with all of the above Not 100% certain but, I have been given to understand that ALL the oil from Alaska is exported to Japan, none to the U.S. If factual, why the yell isn’t said oil being distributed in the U.S.? Methinks there is some hanky panky going on under the table for someone. Anyone want to take a guess?

    • George

      Donald,

      The fact that Alaskan oil is being exported doesn’t necessarily imply there is hanky-panky going on. The oil market is a global market, and that’s a good thing. It’s sort of like if all the world’s supply of crude oil were delivered into one very large tank, and everyone bought amounts out of that tank, and everyone paid the same price. It wouldn’t matter where the oil came from to each buyer of crude, except to the costs of each specific transaction.

  • eddie47d

    Good comments Doug,and some of the others. As an environmentalists I cringed at the Exxon Valdez fiasco,but realized it was only an accident. It wasn’t a deliberate attempt to ruin the Alaska coastline and we hope lessons are learned. Everyone is responsible for taking care of this beautiful planet. The oil left on this earth is a precious commodity,like natural gas and coal we need to use it wisely. We made some big mistakes in the Middle East and we can”t always control who get’s into power over there. I say we should’t abandon THEIR OIL for if we do it’s just more for China and India. As for drilling in the Gulf of Mexico I think it can be done safely.

    • George

      Eddie,

      You have made some of the most responsible statements that I think I’ve ever heard coming from someone who describes himself as an environmentalist. We are all environmentalist if we want to keep the planet clean and healthy. The issue generally comes down to trade-offs between a higher cost of living to pay for government regulations, and net benefits derived from those regulations. This is where different opinions come to play.

      I think we should reduce government interference in the oil and gas industry, and let the markets tell us when it’s time to use alternative energy sources, which alternative sources make sense, and at what price.

  • Robert

    Let’s see now. Some European countries are pouring tons of money into researching harnessing their tidal wetlands to produce electricity. Now that’s something I wouldn’t mind seeing the Federal Government fund with taxpayer’s dollars as long as they kept their stinking noses out of the research and who works on it. Hey Obama, you think that would upset the unions and environmentalist. You bet it would, so let’s deep six that alternative. Right Obama?

    • DaveH

      Robert,
      If there’s money to be made, private enterprise will do the research out of their own pockets. The Government rarely spends our money efficiently. Let’s keep them out of the equation.

      • jim

        Hi Dave, At Argon Labs in Illinois the DOE does alot of research on different sources for energy, from hydrogen fuel cells to lighter, longer lasting batteries. Much of this research is funded by private companies like B.P.& G.M. There are many joint efforts going on, they just don’t get publicized.

    • George

      Robert,

      One of the problems with government funding that I think we’ve observed recently is that sometimes the government funds the projects that support it’s political objectives, like global warming. It apparently didn’t take the researchers too long to figure out unless they were willing to tell the politicians what they wanted to hear relative to global warming, they wouldn’t get the grant money. This was a corruption of the process. Folks are fairly aware that some corporations have done this over the years to sell products, but I don’t think it’s as well known that the government does it to sell political agendas…..

  • chuck b

    how much crude is converted to plastics? and what amount goes to gasoline. i don’t know for sure, but it seems like gasoline is a by product and the larger amount goes to plastic. i don’t hear anyone screaming about conserving plastic!! and the price of plastic going up or down according to the futures market.
    we have enough crude oil reserves to last 200 years or more.
    we have enough natural gas (known reserves) to last practically forever.
    we can convert the auto engine overnight to natural gas which burns cleaner than any other available fuel on the market. so why is there so much concern about energy. its all in the dollar (commodities market)that’s why we have the constant cry of running out of energy. we could supply our nation’s electrical needs with nuclear power, but no, the environmental crowd screams where do we store the spent fuel. i listened to the hearings on the rancho seca nuclear plant and the opposition to it and my conclusion was the people opposing the plant knew about as much as i did about nuclear power and their response to the court was: “ya know man” we don’t want nukes. i came away with the impression the oil companies were probably backing the environmentalist to protect their huge contracts for fuel oil to run the porwer plants in california.

  • http://ordy@fedtel./net Eric g

    I don’t think we do import much oil from the mideast .we produce our selves almost 40% of what we use than Canada Mexicoe and Venzualia supply the rest . If we are taking oil from the mideast we are most likely selling it to europe ,chinia and India . We need that oil becuase we need the money ,or at least the oil companies want the money . I dont care if the mideast pumps their own oil and sells it to europe themselves . Chevas says he used to get 15 % and the oil companies took 85 % He confiscated their right to take Venzualia’s oil and now the oil companies get 15 % and Venzualia takes 85 %. I dont see why we should hate him for wanting a better deal .

    • DaveH

      So, you prefer force over voluntary contracts?
      The difference is that Venezuela would have been still trying to figure out how to develop their reserves years later if not for the American Oil Companies.
      Those origninal Contracts were signed willingly by the Venezuelans. Chavez took somebody else’s property away. Let’s see how his country does in the future when they want somebody else’s expert help.

  • http://www.divinenewbeginnings.org Virgil

    I have an acquaintance in Washington state , a retired Army Medic. His source on active duty at Fort Lewis, tells him that fully loaded oil tankers are intentionally anchored off the coast of Alaska. The problem seems to be that we have enough oil, but not enough refineries to handle the supply ?

    • George

      I’ve also heard that reported in the news recently. That’s why some analysts are predicting the price of crude will drop to possibly as low as $50 per barrel soon. I’ve also heard that the price of gasoline has gone up recently because refining capacity is constrained since they use the same capacity to produce heating oil. That condition should start turning around soon.

  • Doug

    Lindsey Williams- Auther of the book The Energy Non-Crisis (His video is on YouTube) says Alaska has more oil then any arab country and most of the oil is in Gull island north shore and the well is already tapped.

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