Oil: Black Gold, Texas Tea

Ole Jed's a millionaire, Jed move away from there! and you know the rest...


Since the high cost of gas is uppermost on so many people's minds I thought I'd post a bit about oil and how it works in our economy et etera.

I suspect most people figure we get the majority of our oil from the Middle East. Actually we don't. One of the reasons that Pat Robertson threatened to have Hugo Chavez (President of Venezuela) killed is that Venezuela is our largest supplier of oil--and Chavez is starting to play hardball with the major oil companies. In addition to Venezuela, which supplies us here in the USA with just over 1.6 million barrels of crude oil a day, Canada and Mexico supply us with almost 1.6 million barrels a day each and Saudi Arabia clocks in at 1.5 million barrels a day. In fifth place is Nigeria with a bit under 1.1 million barrels a day.

Perhaps another thing that bothers the Rev Robertson is that Chavez supplies some countries, mostly in Latin America, with oil at a much lower rate than what the US pays. Cuba in particular receives a sweetheart deal getting 100,000 barrels a day of subsidized oil. Cuba in return supplies Venezuela with trained doctors and dentists to help the nation's poor with their healthcare. Venezuela has been exporting oil for a long time--they were a founding member of OPEC in 1960--but of late they've been much more militant in their dealings with the big oil companies. Even going so far as to levy fines for past behavior that has been determined reproachable in hindsight. Shell, for example, was recently given a $132 million dollar fine for previous behavior. Not exactly chump change.

Is there a solution to belligerence like this from OPEC countries? Not as long as we need their oil. Bush's recent call for energy conservation, belated as it was, seems to be the best solution for the moment. Later posts will cover where we can go in the future for alternative energy sources.