Over a Barrel: The Truth About Oil

And the United States is spending billions more on military engagements in the Middle East. The war in Iraq alone, by conservative estimates, has already cost close to $700 billion.

Gen. Wesley Clark, the former Supreme Allied Commander Europe of NATO, called oil resource protection one of the key factors driving U.S. foreign policy.

"There is no one who would have any doubt about whether protecting energy sources and access to those sources is one of America's vital interests," Clark said, adding, however, that the Iraq war should not be reduced to U.S. interest in oil?

"No, it wasn't all about oil," Clark said, "but oil was a component of this. ... Indirectly, oil was at the foundation of a lot of this, not just in 2003 but in 1990, '91 ... It's been the thrust of U.S. policy, and before that, it was the thrust of British policy to safeguard access to that region."

Vaitheeswaran, in his assessment of the true costs of oil dependence, said, "We're paying for the geopolitical complications of oil, but we pay it through the Pentagon budget and we pay it through the lives of our soldiers lost overseas.

"These are costs we bear. ... We use more gasoline than we should, because there is an artificial price. ... We don't pay an honest price for the energy we use in America."

Oil Addiction: The Future

Debates about how to break U.S. oil dependence -- and decrease the hidden and not-so-hidden associated costs -- dominated the last presidential election.

"Drill, Baby, Drill" was the familiar mantra at Republican rallies last fall. GOP vice presidential candidate Sarah Palin called for expanded domestic oil drilling.

Part of the argument for expanding drilling is that, because of new technologies, oil companies discovered more domestic oil than ever thought possible.

But the issue is whether it's possible to drill enough to reduce U.S. dependence on imported oil. There are about 3,500 oil platforms in the Gulf of Mexico, but most produce a few hundred barrels of crude a day.

Chevron, the San Ramon, Calif.-based company that spearheaded the historic deepwater discovery in the Gulf, has a new hi-tech drilling platform, 160 miles offshore. Two shifts of 46 men each work on the platform, two weeks at a time, to keep the rig afloat and level, using huge chains securing each side.

'Brill, Baby, Drill' Makes No Sense to Pickens

Seven thousand feet below the platform, underwater robots operate to extract oil another 25,000 feet down. In all, the oil is being brought up 32,000 feet, pumped up to the oil rig, and down to underwater pipelines that lead to shore.

They're able to pump 65,000 barrels of oil a day, which, at today's price, brings Chevron $1.5 billion a year from this one rig alone.

"The next 10 years, we could be in 14, 15,000 feet of water," said Rick Bullock, who runs offshore operations for Chevron. "To a certain extent, the sky's the limit."

It is true that, because of technology, the United States is getting oil from areas unreachable a few years ago. But the country has fewer proven reserves than a decade ago. There are no more gushing geysers like in the heyday of U.S. oil.

T. Boone Pickens made billions off the oil industry in his 50-year career. But the lifelong Republican now says, no matter what his party says, that Americans can't rely on what they have, regardless of how much technology may improve.

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