They Hate Us; Good Thing They’ve Got All The Oil

The Sunday Chicago Tribune story, “Twilight of the Oil Age: A tank of gas, a world of trouble”, also broke down where the Marathon station got its gas. On one night in September 2005, the gas came from the Gulf of Mexico (31%), Texas (28%), Nigeria (17%), Saudi Arabia (10%), Louisiana (8%), the Illinois Basin (4%), Angola (3%), and the Republic of Congo (0.01%).

Those figures do not exactly align with recent import statistics from the U.S. Energy Information Administration, which paint a picture of where the U.S. in general gets the bulk of its oil over the long-term. According to the EIA’s May 2006 Import Highlights , Canada—yes Canada—was the top oil exporter to the U.S. based on barrels per day. Year-to-date through May, Canada was sending 1.76 million barrels per day into the U.S. Next was Mexico, sending 1.67 million barrels per day. Rounding out the top-five are Saudi Arabia (1.42 million bpd), Venezuela (1.19 million bpd) and Nigeria (1.13 million bpd). By comparison, the U.S. consumed 20.7 million bpd in 2004.

Others on the list of exporters to the U.S.: Iraq, Angola, Algeria, Russia, Ecuador, Kuwait, Columbia, the United Kingdom, Norway and Brazil. How many of those countries are we on friendly terms with? The U.K.? Norway, maybe? Most of the citizens of the other countries on that list would probably just as soon see us running around on fire punching ourselves in our own heads.

The reality is that most of the world’s easily recoverable oil lies underneath places where people don’t like us very much. And a good portion of the less easily recoverable oil—think tar sands, here—also lies underneath places like Venezuela and Canada. According to the Tribune story, Canada has about 174 billion barrels of oil sands reserves; Venezuela has as many as 270 billion barrels of other versions of so-called heavy oil reserves.

Canada pretends to be our ally, but many Canadians can’t stand America. The Indignant Citizen gets the impression Canadians think the U.S. is dragging down the collective culture of North America. And Venezuelan President Hugo Chavez’ feelings for the U.S., and our goofy child-president (to borrow the late Dr. Hunter S. Thompson’s characterization) in particular. Paul Salopek, the author of the Tribune stories, makes special of Chavez and his fiery rhetoric.

In July, Chavez announced an “anti-imperialist” agenda through which he said he was cutting off sales of gasoline to 1,800 independently owned Citgo stations in the U.S. The Venezuelan government owns Citgo, Salopek writes. Chavez also refers to President Bush alternately as a “mass murderer,” a “drunkard,” and a “donkey,” according to Salopek.

And in the Arab world, the growing gap between those who have access to the oil wealth and those who do not is fostering intense hatred of the West, and of America in particular. Salopek’s reports from Nigeria, where resentment toward oil companies runs high in the poverty-stricken communities nearby; from Iraq, where the war seems to have been just the beginning of the violence and where Islamic extremists are fomenting civil war between Sunnis and Shiites; and from Venezuela, where farmers tolerate the oil companies and the spills because Chavez is a socialist and for now he is placating his people with money.

In the multi-media section of the website, James Howard Kunstler makes the point that—as he has on his own website and in his books, most recently “The Long Emergency”, that all it’s going to take for world oil supplies to be disrupted is a handful of jihadistas with a few pounds of Semtex and some determination to detonate some oil pipelines, or sink a barge or something in the Strait of Hormuz and block oil shipping lanes.

The United States has set up what is essentially a Middle East police station in order keep tabs on the disorder in that part of the world. Nigeria, Salopek writes, isn’t far from falling into the same kind of violent chaos as the Middle East. “The bloodiest chaos unfolds mostly unseen, however, out amid the syrupy brown rivers that braid the mangroves before sliding into the Atlantic. There, armies of the poor battle the government, foreign companies and each other for a fair share of oil wealth. The impulse is understandable. According to the World Bank, 80 percent of Nigeria’s staggering $340 billion in oil revenue has been pocketed by 1 percent of the population—a cast of thugs who include the world’s most venal politicians and generals.”

Later, Salopek quotes a young Nigerian with few good prospects: “No jobs, no running water, no electricity, no opportunity, no dignity. . . . I am going to carry a gun. I am going to blow up some wells. Otherwise you get nothing in Nigeria.”

That kind of talk could easily be dismissed as angry grandstanding, but the fact is as the number of young men who feel that way and talk that way grows, more of them will start following through on those kinds of threats. They could quickly disrupt what is a fragile oil delivery system, and throw the Western Hemisphere into chaos.

To prevent this, Americans are paying a heavy price. Milton Copulos, an economist with the National Defense Council Foundation, which Salopek describes as a “right-of-center Washington think tank,” has calculated what he says is the true cost of gas, per gallon, with counterterrorism measures and various wars thrown in. If you think $3.50 a gallon is expensive, hold on. Copulos says in the article that when you factor in oil-related defense spending, jobs and investments lost to high crude prices and medical bills for U.S. troops injured in Iraq, the real cost per gallon of as should be closer to $8 per gallon. That’s eight as in almost 10.

But consumers, Salopek writes, remain unaware. “Consumers don’t dodge the bill for all these masked expenditures. Instead they pay for them indirectly, through higher taxes or by saddling their children and grandchildren with a ballooning national debt—one that’s increasingly financed by foreigners. The result: Unaware of the true costs of their oil habit, U.S. motorists see no obvious reason to curb their energy gluttony.”

But, as Salopek writes elsewhere, “Our nation’s energy-intensive joy ride, powered by 150 years of cheap petroleum, may finally be coming to an end. This could be as good as it gets.”

There’s far more in Salopek’s exhaustive series. More on Iraq and the fiasco there, more on the cluelessness of American consumers, more on the hardships faced by those who live and work in the countries that supply us with our black heroin. There is too much more to get into here. Read the series, check out the multimedia features on the Tribune’s special page, and draw your own conclusions.