Thinking about the strategic petroleum reserveThere was a very interesting article in a back issue of BusinessWeek that caught my eye today whilst sipping at Starbucks. Apparently our strategic petroleum reserve in the USA is now reaching its capacity of 700 million barrels.
According to this article in the New York Times, the current price of oil is "$28.66 per barrel". Let's assume that our strategic petroleum reserve (SPR as it's called) isn't at 700 million barrels, but at 650 million barrels. That calculates out to a cool $18.6 billion in petroleum.
According to the U.S. Census Bureau, there are 290.5 million people in the United States. This means that there are 2.2 barrels of oil for each of us, worth $64.13 or so. The Census Bureau also indicates that there are over 200 million cars registered in the United States, which means that there are 3.25 barrels of petroleum per vehicle.
But let's look at this a bit differently instead. Again according to the BusinessWeek article, 700 million barrels cover our petroleum needs in this country for 313 days, which means that we consume 2.2 million barrels daily. Meanwhile, according to the Department of Energy,"for the first 11 months of 2002, Iraqi crude oil production averaged 2.02 million bbl/d". I find a remarkable synchronicity between the amount of oil produced in Iraq daily (experts conservatively estimate Iraqi fields could produce over 3 million barrels daily, and their untapped reserve is estimated at above 112 billion barrels) and the amount consumed daily in the United States.
Imagine... if we just annexed Iraq, that one nation could cover all our oil needs, allowing us to completely ignore the already-dying OPEC and even the Russian push for us to buy their own domestically drilled petroleum. Further, with 112 billion untapped, this means that we could keep our current greedy oil consumption at the same level for 139 years. Scary, no?
Perhaps this is what the American automakers have anticipated with their contempt for mileage improvements in cars. It's appalling, and has been since the defeat of the CAFE standards:
"In mid-February, GM, Ford, and Daimler-Chrysler told the National Highway Traffic & Safety Administration, which enforces fuel economy standards, that they can't meet its proposed rules to raise truck and SUV mileage. That plan, to raise combined truck fuel economy from 20.7 to 22.2 miles per gallon by 2007, is just too challenging and too costly, the Big Three argue."It's like living in some asylum. We go to war to ensure a safe America, targeting a despot who, like many around the world, hates us, and just maybe to improve our access to petroleum so that we can keep gas prices down, so that people will continue to buy low gas mileage vehicles, so that we have a never-ending economic reliance on Iraq and the rest of the OPEC producers.
To get out of this loop, surely electric vehicles, gas/electric hybrids, and just plain improved gas mileage are an important step? And the American car makers say "oh, it's too much hassle and we don't want to do it so can we have another exemption for ten years, please"?
And meanwhile Americans are agitating towards the French because they admit that they have an economic interest in Iraq. Like we don't?
Posted by Dave Taylor at March 24, 2003 4:48 PM
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