Tuesday, September 02, 2008

OIL, AMERICA’S ADDICTION

Recently Congressman Sanford Bishop held a Town Hall Meeting in Cairo. A lot of time was taken up discussing America’s energy situation and our dependence on foreign oil. A lot was said by both Congressman Bishop and citizens attending the meeting. Unfortunately facts were never used during any of the discussions, only heated emotions. Congressman Bishop said and I quote, “We must stop buying oil from our enemies!” He never explained who our enemies are.
Congressman Bishop might be surprised to learn that Canada is our largest importer of oil. In fact we import about 50% of our oil from western nations and only 16% from the Persian Gulf. Does this mean Canada is our enemy?
There are only two ways to get oil out of the ground. One way is to hire an oil company to drill on your land. That way the oil is yours, however you have to store the oil, transport the oil to a refinery, pay the oil company to refine the oil and transport and store the oil after the refining process. The other way is to lease your land to the oil company. The oil then belongs to the oil company and not you. After the refining process you buy back your oil from the oil company. This is what we do here in America. It’s a wonderful system for the oil companies.
Oil companies lease our lands for $1.50 to $2.00 an acre. These lands are located mostly in the Western States and controlled by the Bureau of Land Management (BLM). Since 1982, the federal government has leased or offered for oil and gas drilling 229 million acres of public and private land in 12 western states. The oil companies are required to pay 12.5% royalty on the total dollar amount of the oil pulled out of the ground. So if a company drills for oil and the total amount is 1 million dollars they owe the federal government 125,000 dollars. And we buy back that oil from the oil company. Of course they don’t have to sell the oil to us, it’s their oil and they can sell it to which ever country they want. These are not American companies they are multi national corporations operating on a global scale.
America produced all the oil we needed up until 1970. That was the year we hit our peak oil production and started importing oil. As of 2007 America consumed 21 million barrels of oil per day, making us the world’s largest petroleum consumer on the planet. Taking that a step further we consume 7.8 billion barrels of oil per year.
Politicians on both sides are talking of drilling in the Arctic National Wildlife Refuge (ANWR). Everybody says this will help fix our oil dependence on foreign oil. Actually the facts do not bear this out. Nobody really knows how much oil is in ANWR. The Energy Information Administration believes there is a 95% probability of 5.8 billion barrels of oil under ANWR. That will not provide even one years supply of oil for America! This is a problem we can not drill our way out of; we must find alternatives to our oil addiction. And we had better do it soon.

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