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Sweet and Sour
Washington, July 5th, 2005 --- There are lies, dammed lies and statistics. You could also add a fourth category, Oil Statistics.
The prediction of many essential numbers for everything from agriculture to aviation depends on having accurate supply, demand and price numbers of the worlds oil supply, and associated reserves. A logical person would ask why these figures are not part of the United Nations mandate, considering how global, and important they are.
But they are not, and are manipulated for political gains by all sides, especially the United States and OPEC.
The United States blames OPEC for spiraling prices at the pumps, OPEC points to greed and under capacity and lack of investment by US Oil companies. Either way those who rely on reasonably accurate numbers are in for a sticker shock.
At a recent briefing the question of oil supply was explained away as due to the socialist policies of President Chavez, and Venezuela. Glibly a list of compliant suppliers were announced who would immediately neutralize any disruptions, until the US military could intervene and bring Venezuela back into the cheap supplies fold.
A rare bird, a reporter who understood the industry, asked if these replacement crudes could be handled by US refineries. Question deflected and "On Topic" bland statement given.
But here lies a fundamental fact not understood by the majority. Crude Oil is not the same around the world. In fact many refineries can only handle supplies from one, or a few sources. The United States has built it's key refineries around an abundant supply of cheap Light Sweet Crude, low in poisonous sulfur (sulphur) and cheap to refine.
The supplies of light cheap sweet crude are running out, and thanks to political mismanagement, especially by the Bush Administration, we see serious problems in the key production areas.
Wall Street has sucked out the profits of the Oil Industry to squander on the American Dream, luxury living and the Good Life. The crunch is looming and they do not want to stop this bonanza, for the few.
The lack of investment in refining infrastructure, and alternative sources of energy are coming home to roost. The blame is being placed firmly on the Middle East, on Al Qaeda and Insurgents instead of having the wrong plans, or no plans at all for changing energy supplies. Bin Laden is a convenient scapegoat.
The Wall Street mindset of quarterly numbers will be the undoing of the US energy policy. But they are not alone, the resistance to refineries and facilities for unloading crude oil and gas are standing in the way of expanding the range of supplies capable of being refined into useable petroleum products. Everybody wants cheap petroleum, heating oil and diesel, but nobody wants the refineries in their back yards. Oil tankers need deep water, and coastal facilities. Those New York brokers growing fat off cheap oil want the same locations for their summer homes. Again the unrepresented public loses out.
The reserves of oil glibly quoted by politicians do not compare like substances, that can be brought to market through existing supply chains. True Canada has huge deposits of OIl Shale, but that can't be tapped by drilling a hole in the ground, sticking on a well head, and sitting back and watching the oil gush out. Thick Sour Oil is difficult to transport and handle, and is really obnoxious stuff, especially if it leaks out. But it could be refined near it's source and investment in a global refining plan would help struggling third world economies. But profits, and politics get in the way.
Few Americans understand the energy resources they are squandering, and few politicians want to tell them. There really isn't a Peak Oil Crisis as best selling authors would lead us to believe. There is a Peak Cheap Oil Crisis, and that makes a lot of difference. It's all about profits, and lifestyle.
With a comprehensive energy plan there could be no debilitating crisis. Without one there will be. But a comprehensive energy plan means windmills in somebody's back yard, and unloading terminals and refineries in others. The US public can't have it both ways any more.